Quote:
Originally Posted by
greg_atlanta 
Most happy German car owners are LEASING, not buying new or used.
An Audi is an investment OPPORTUNITY, not an investment. You'll have sunk so much money into it over 5 years you'll hate to get rid of it and lose your repair/maintenance investment.
Let's say you pay $20,000 now. Over 5 years you'll probably average $3,000 year in repairs ($15,000), and after 5 years the trade in value is $5000.
investment: $35,000
return: $5,000 (and something to drive for 5 years)
So for $30,000 you could have bought a decent new car, and when it's paid for you'll have a resale value of at least $10,000.
While agree leasing is best when you don't have the time and energy to deal with repairs your cost outline above is faulty. New cars take a big hit on depreciation the first couple of years. Buying a 2-3 year old car is a usually a good deal when looking at money spent/utility received.
Your analysis is incorrect.
Let's take a typical model:
2005 A4 2.0T, quattro, manual, 24,000 -- current value $23,830 (KBB.com, private party, good condition)
Now let's assume you bought a similar model 5 years ago:
2000 A4 1.8T, quattro, manual, 78,000 -- current value $10,000 (KBB.com, Private party, good condition)
both 2000 and 2005 model year Audis have a warranty and free maintenance included untill 50,000 miles/4-years. That means you will only have to pay about 2 years worth of maintenance repairs. Your estimate of $3000 a year is way too high. I would say $1500 a year would still be too high but let's go with it.
Total cost of ownership= $13,830 depreciation+ $3000 two years of repairs= $16,830 to drive this A4 for 5 years. Not a bad deal if you ask me.
To get $35,000 out of $20,000 you need an effective rate of return of almost 12% yearly. Not something you can reliably guarantee.
