Question to purchasers without writeoff benefits

[Terminator02]

I see many people lease and or finance as business owners with tax saving abilities and it got me thinking about those who do not have such ability. I fall into just a financer of a X5M w/o any benefits and I am questioning if it is "worth it" to have a 113k car sell for 35k in 5 years. I know it is all relative to one's situation but I have to ask if anyone thought of this and what justifications to keep or sell were used?

To be honest I got this 2017 with 5k miles and full expel wrap roof to rockers this past October for 92k so it isnt technically on full 1st year depreciation but I honestly did not think my 70k SRT Jeep bought new in 16 will be worth more. I suppose it was more ignorance on my part. I always liked and wanted an X5M, my wife and I can afford the true cost of ownership of all our vehicles but perhaps I have begun to think more of wealth accumulation opposed to feeding a love of fast cars and SUVs. I am sure we ALL have had a rational part of our brains ponder it at some point.

I also would love to hear from the tax benefit people to see would they have financed or leased it without those deductions and write offs? I absolutely love this vehicle and it easily is one of the best cars I have ever owned so I will likely keep it. My wife thinks I should not give it much thought but again, I guess this is my buyers remoarse from only a logical perspective as if this had 40% 5 year value I would not even consider this. I just never owned such a horribly depreciating luxo "asset."

[menelaos]

My take is that you should only buy cars you can afford and assume responsibility of their maintenance with no warranty involved.
Cars are not a wealth - accumulating asset.. Unless you are Jay Leno wealthy that is and can afford a handmade car.
Don't know much about the write off part, but my wife who uses it as business vehicle, was able to declare as business expense. Am sure you can find holes in the tax code and associate it with a business operation if your accountant is creative!

[Terminator02]

I do not disagree with what you wrote nor think an suv is an appreciating asset like my TA is doing. I mean some will say only buy your vehicle in cash and in that sense I guess we cannot "afford" it. My post really was not meant as a feeling I am in over my head; rather just realizing I do not see many people finance or lease without incentives. I bought because I always wanted one, slightly considered depreciation but now wonder if these SAV/SUV in the 100k+ range are not meant to be bought without tax incentives and writeoffs. Like the lambo crowd says "you know you can afford a lambo if something happened to it you can just buy another lambo."

[menelaos]

To me, cars should be bought for pleasure.
Have fun as much as you can, because life could be different tomorrow.
I'd only buy a vehicle over 100k if my yearly income was 250+.
There are place like NYC where that figure does not define you as wealthy with 2 kids.
Don't think you need all cash in hand, 40% to 50% should be ample enough.

[pachieh]

If you can take a tax write-off, great! If not and you can afford the car, great!

I bought my X5M the same way as you. 4k on the odometer with initial depreciation taken off (I paid $93k, put another $30k down). I bought it that way because I keep my cars longer than a 3 year lease (typically 6-8) and I wanted the car. I don't see ANY car purchase as an investment unless you are a collector (like menelaos said). Every car now depreciates a lot.

I don't own a business to take the write-off anyway (I'm a military guy). BUT, I wanted this SAV badddddd after I drove a F10 M5 but decided I wanted to haul some stuff around instead of a sedan. Buy and drive a car YOU want, it'll make you happy!

[Terminator02]

Originally Posted by pachieh

If you can take a tax write-off, great! If not and you can afford the car, great!

I bought my X5M the same way as you. 4k on the odometer with initial depreciation taken off (I paid $93k, put another $30k down). I bought it that way because I keep my cars longer than a 3 year lease (typically 6-8) and I wanted the car. I don't see ANY car purchase unless you are a collector (like menelaos said). Every car now depreciates a lot.

I don't own a business to take the write-off anyway (I'm a military guy). BUT, I wanted this SAV badddddd after I drove a F10 M5 but decided I wanted to haul some stuff around instead of a sedan. Buy and drive a car YOU want, it'll make you happy!

That was my thought process. I actually got it for my wife because she likes fast cars, cannot drive stick, likes being in an suv and is way too frugal to get something nice and figured this is the best in its segment. Brought her home and she chose my 16 Night SRT. Go figure. Thank you for your service from the both of us. We met when I was running a sunstance use disorder department at the VAMC in Michigan while she was finishing her psychiatry residency. I loved working with the vets for 5 years...could not stand the politics. Enjoy that beast!

[Terminator02]

Originally Posted by menelaos

To me, cars should be bought for pleasure.
Have fun as much as you can, because life could be different tomorrow.
I'd only buy a vehicle over 100k if my yearly income was 250+.
There are place like NYC where that figure does not define you as wealthy with 2 kids.
Don't think you need all cash in hand, 40% to 50% should be ample enough.

Definitely agree. I use the simple math of our cars being no more than 1/2 yearly income and home being 2x yearly income but since it is the two of us with no kids, could not justify a home 2x our salary so it is no hardship. I know too well in my profession how life and time is no guarantee for anyone and do have to remind myself of that. Glad I posted this as you gave me a needed reminder. The catharsis amongst car people! Cheers

[pachieh]

Originally Posted by Terminator02

That was my thought process. I actually got it for my wife because she likes fast cars, cannot drive stick, likes being in an suv and is way too frugal to get something nice and figured this is the best in its segment. Brought her home and she chose my 16 Night SRT. Go figure. Thank you for your service from the both of us. We met when I was running a sunstance use disorder department at the VAMC in Michigan while she was finishing her psychiatry residency. I loved working with the vets for 5 years...could not stand the politics. Enjoy that beast!

Thanks for taking care of vets, I consider it a public service, wish more people would.

My wife was livid with me when I bought the X5M. More in that I didn't tell her initially and that I told her I'd buy her a new car first. But, the one I found was exactly what I was looking for and couldn't pass it up. But hey, I can fit my three kids in the back, so it can move the family just like her minivan!

Never have regrets about buying your car. Just take care of it as your drive it hard!

[menelaos]

Originally Posted by Terminator02

Definitely agree. I use the simple math of our cars being no more than 1/2 yearly income and home being 2x yearly income but since it is the two of us with no kids, could not justify a home 2x our salary so it is no hardship. I know too well in my profession how life and time is no guarantee for anyone and do have to remind myself of that. Glad I posted this as you gave me a needed reminder. The catharsis amongst car people! Cheers

Should you come upstate, come by in Cheboygan.
I'll treat you wine from our vineyard!

[Nuckle]

I strictly looked at this vehicle from a fun perspective. I view it as a rental that I have to keep for 36mo and then can walk away. I did not want the worry of depreciation and made my decision solely on payment. I asked my self a simple question, is it worth $*,*** per month in fun?

So far it hasn't let me down hahahaha.

I also find that when I lease I tend to enjoy vehicles more. I am not so fussy about keeping it spotless or finding crumbs under the seat where my girlfriends daughter eats a bagel on the way to school. I don't mind running it through a car wash and letting someone else wipe down the inside. I don't mind running it hard every time that I drive it. I don't mind that little rock chip on the front left. I just drive the shit out of it and enjoy it.

I am not sure what's next but I am about 99% sure it will be another BMW so when I return it I will make sure the dealer don't care about those things either.

Lastly, I have been in several leases where the vehicle performed well on the depreciation side. Some I have bought and sold for a profit and some I have traded in early with no negative equity. It's a numbers game and to me all the risk is on the finance company.

[menelaos]

Originally Posted by Nuckle

I strictly looked at this vehicle from a fun perspective. I view it as a rental that I have to keep for 36mo and then can walk away. I did not want the worry of depreciation and made my decision solely on payment. I asked my self a simple question, is it worth $*,*** per month in fun?

So far it hasn't let me down hahahaha.

I also find that when I lease I tend to enjoy vehicles more. I am not so fussy about keeping it spotless or finding crumbs under the seat where my girlfriends daughter eats a bagel on the way to school. I don't mind running it through a car wash and letting someone else wipe down the inside. I don't mind running it hard every time that I drive it. I don't mind that little rock chip on the front left. I just drive the shit out of it and enjoy it.

I am not sure what's next but I am about 99% sure it will be another BMW so when I return it I will make sure the dealer don't care about those things either.

Lastly, I have been in several leases where the vehicle performed well on the depreciation side. Some I have bought and sold for a profit and some I have traded in early with no negative equity. It's a numbers game and to me all the risk is on the finance company.

Yeah, I could envision leasing.. But if you record 25k miles a year, it ain't worth it

[aparedes]

I managed to take advantage of the tax write off under a lease so I went this route for the first time.

Cars in America tend to depreciate steply unless you buy a limited production car or high demand like a GT3RS or GT3.

I feel the best option is to lease a car and at the end of the lease you can decide which route to go. If the value of the purchase at the time of the lease is below market value it will likely make sense, otherwise it is probably best to just to return it. Also in a lease, you do not need to worry about depreciation due to accidents or other repairs that might have an impact on the value of the car in your period of ownership. I feel a lease it is more flexible as it give you the option at the end of the period to decide what is best.

A

[dentony]

always lease sometimes I buy them (98 Supra TT 10 M6 cab 6 spd)
most I return
I don't see this 17X5M going back with the mods Ive done and the amount of enjoyment it is to drive
but you never know and leasing always gives me the options

btw...I love the info I get on this forum! thank you guys

[dkhm3]

If you don't have a write off for the car, the case for a lease or a purchase can depend on a lot of factors. There's plenty of empirical information out there for M cars so these numbers should not have surprised you (for example in 3 years my 6 year old m3 with 55k miles should be worth between 30-35k trade in based on current e9x m3 prices), and generally speaking most cars that cost over 100k depreciates more rapidly- there is simply a smaller market of 2nd hand buyers out there that would purchase a 80k used x5m or m5 vs just leasing a new one.

This is why the luxury high end market depreciates so rapidly.

Some people mentioned rare sports cars like the GT3 etc, but if you drove them normally 10-12k miles a year, you'll find the depreciation bug hits them pretty hard too.