car value versus what we put in it.

[Benz300]

Hello everyone,
in the continued effort to keep the 260E on the road, I now have to get the differential bushings and rear end taken care of.
i have also looked up the trade in value, and for what the car is worth on KBB, i am not sure if spending another 1500 would be worth it. however, on that note i also thought of everyone owning the similiar mode w124's on this forum. by now i am sure that almost everyone has far exceeded the money they have spend than the car's worth if it were to be traded in.
question is, is it worth it at the end as the w124's arent really collectible models etc....

[MTI]

It's called "getting upside down" when expeditures exceed value. Mercedes people do it all the time, as do Porsche and British sports car owners. Why would a smart guy like Stephan Wilkinson, former Car & Driver editor, spend two years and $70K to refurbish a Porsche 911 that will never be worth more than $20K . . . read "The Gold-Plated Porsche" to find out.

[Benz300]

dare i say that it was a porche and i'm referring to a 260e

[Nabeel]

Heh, the Porsche he restored was nothing spectacular (at least in the realm of Porsches). It was a 911SC I believe (produced from '77-'83), which would be worth maybe $20-25K tops. But he, like so many others here, got bitten by the old European car bug. I don't think you can place a monetary value on things such as character, style, and individuality that come with a good condition, older MB, BMW, Audi, Porsche, etc. Rationally speaking, it makes no sense to continue putting money into these cars, but when measured in terms of overall satisfaction, I think the situation becomes more complicated. If you are not particularly intruiged by anything else on the market, or feel that no other car can give you the satisfaction of a W124, then the maintenance/repair money can be seen as an alternative to spending more money on a newer (but perhaps less 'satisfying') car, or a cheaper car with no personality.

[pmckechnie]

The way to look at it is, add the cost of repairs to the value of the car. Take this amount and see what you could buy to replace it. Deside which car you would rather have. People buy new (or newer) car because they want them, but try to justify them with needed repairs to their old car. I am completly "upside down" on my 84 500 SEL and have no regrets. It is a wonderful car that I enjoy every mile I drive it. My 91 300D is not "upside down" yet, but I am sure it will be some day.
Just think of the repairs I could do on either of these cars with the $50K or $60K it would cost me to buy a new (or newer) car in the same class.
The only down side to the above is if the car is totaled in an accident, the insurance companies wouldn't give me squat for either one, but that is a chance I will take.

[G-Benz]

With few exceptions, cars are a depreciating investment, so you never can come out on top!

Even if you bought a brand new one, paid cash, and just trailered it into a garage and did nothing, initial depreciation once driven off the lot puts you behind!

Bottom line is, you can't justify whether or not to spend money on a particular maintenance item simply by the car's worth.

It's what drives the economy, and it's why the majority of folks wind up replacing one or more vehicles every three to four years.

The threshold is generally, how problematic can a vehicle become before you just get fed up and decide to opt for something with fewer to no problems.

A sensible approach is weighing the cost of the repair versus the cost of replacement (i.e. a new or used vehicle).

But for some of us afficiandos, the love of a marque or particular model throws all sensibility out the window. So we pour all we have into keeping that love alive.

My VW in my sig has about six times it's worth invested over the years, and it doesn't even run! It would take another $5-8K to get it back to its former glory!

[Hatterasguy]

I am pretty far upside down with my SDL. But ehh it is only money I can make more.

If you like the car then fix it, if the newer car bug has bitten then it is time to move on.

If you like W124's their are some really good bargins on the 94-95's now. You could pick up a mint 1995 E420 for $10k or less.

[Jim H]

Here's my way to look at it.

The Fed's allow $0.375 per mile allowance for autombile expenses.

my 1986 300SDL works out thus:

20,000 miles driven (so far)

$0.105 / mile $2,000 purchase
$0.175 / mile $3,500 maintenance
$0.100 / mile $2.50/gallon @ 25 miles/gallon
$0.030 / mile $600 insurance per year, owned 10 months

$0.405 / mile Total

Not too bad, and it seems to be getting better now that the bigger items, like new radiator, etc. have been taken care of.

Oh, if I sold it today for the $2,000 I paid for it, the cost would be $0.300 per mile, so I could say I'm ahead of the game. Not bad for a 19-year old 'hobby' car I really didn't need!

The final, end-of-life value will be more like $0.00, as it is hauled away for parts...


Best Regards,
Jim

[BenzOnline]

The way I look at is I ignore the value of the actual car and see how much its valuable to me!

[anthonyb]

Yeah, me too. Or I look at the replacement value of what I would want, which is usually something in the $20k range to replace my 300E. $20k can buy a lot of brakes and oil changes.

I routinely spend up to, or more than, my car's value on maintenance every year, but the thing's paid off, it drives pretty well, is roomy and comfortable, and I don't care if it gets dinged or scratched anymore. I'm hoping to nurse it along until some real high dollar set of repairs is needed, and then replace it with another long-term keeper.

[rickjordan]

Nothing has actual value until you sell it. Sure you could stop putting money into your car and go and spend that and more money on another car, but then you are starting all over again. Cars have never been investments, so why people get caught up in the repair cost to value thing, I don't know. The way I look at it, if your car is "worth" $3,000 and you spend $3,500 to bring it back up to speed and be as reliable as a new car, then it's worth what a new Benz would cost. I know this goes against the grain of conventional thinking, but really, when it comes down to it we are talking about transportation. ABS, ESP, GPS, Nav. Sys. Statelite radio, etc. are not needed to get from point A to B.
Take what you paid for the car plus the maintenance/repairs, divide that be the number of months you have owned it, and you'll see what on average you have spent for that car. It will certainly be less than a car payment, especially one on a new Benz.
It's the industry that wants to to toss aside the "old beater" and get a new one. Not that I am an enviromentalist, but you could think of it this way, you are keeping one less car out of some junk yard/land fill

[lkchris]

Originally Posted by BenzOnline

The way I look at is I ignore the value of the actual car and see how much its valuable to me!

Value is as a transportation device, modified by safety of same, enjoyment of driving same, cost of operation of same, etc. Resale value is of little consequence. Please understand that depreciation is a cost of operation. Used cars are the most economical, but we all thank those that just psychologically "need" new cars.

[Rahulio1989300E]

I got into a bit of an arguement with my brother, but in the end he may be right...

He wants to buy a new Volvo S40 for about $30K with all the options, he gets a plane ride to Sweden, a free hotel room, and a limo ride to the Volvo factory. He gets to see his brand new car roll off the finish line, and a tour of the facility.

Then he gets to drive on the Autobahn for 1500 miles until he gets to Frankfurt airport, where he drops off his new car at the Volvo office there for shipment...

He flys home, and 4 to 6 weeks later, he takes delivery at his local dealership.

That is very cool to me!

He beat me down by stating that yeah, he pays $30k now (he is going to buy the car outright, so no stupid finance charges apply...) and he gets 4 years/40K free service for the car, (includes oil changes, brake pads/rotors, all the wear and tear parts.)

So he plans to keep the car for 10 years, he told me that in the end it will cost him about $3200 a year average... 3500 x 10 $35000 for 10 years worth of car...

He told me my 89 300E cost at least $3000 a year has 188,000, 16 years of age and could fail at anytime.... he really got me there....

So maybe he is right, my car has a rougher idle, the door panels shake a bit, and it swallows premium gas.......

But, I told him that when I become a mechanical engineer, I will be making about $40K a year and could never afford a nice S40 Volvo like he can, unless I finance it for like 20 years, and that the only way to get a nice car is to get an older one and progressively make it close to perfect....

He told me that I would not need a Mercedes, and that it is just a luxury, and that a Honda Civic would fit the budget well...

So I guess I am going to get a Honda Civic.....???

O well, I am still enjoying my car, and until it does crap out on me, I will wash it well, repair what I can, and maintain it the best I can......

Then I will see about the Honda....

[pmckechnie]

Raluhio,
Your brother left out a little in his argument. He failed to take into account the repair and maintaince cost for years 5 - 10. Volvos are not what they used to be. A friend of mine has a S60 with about 80K miles and has spent a lot more on it than I have spent on my old 84 500 SEL with about 250K miles in the last 2 or so years. And I had rather have my 84. It drives better, is quieter, has more power, and gets almost as good mileage on the road.
Let your brother have his Volvo, you keep your Benz and 10 years from now see who has the best car.
Like I said earler, people buy new cars because they want a new car.

[Hatterasguy]

I bet if he bought an S40 that was say 2 years old he would save $10k+ and still get 10 years out of it.

Cars are not an investment unless you are buying new Ferrari's. If you want to make money buy real estate not cars.

It doesn't matter if you put $3k into a $3k car because the value isn't the monye but the miles you will get out of it.