What’s a good car choice for the value investor?

[LongHaul]

Car Safety Data FYI.  (major flaw though IMO is that it is not by vehicle miles traveled) but still interesting data.

 

Driver death rates by make and model - IIHS (adjusted for age and gender)

 

https://www.iihs.org/api/datastoredocument/status-report/pdf/52/3

 

Generally the heavier the vehicle the lower the driver death rate by category

Average of 30 driver deaths per registered vehicle.

Mini cars had 87 vs Midsize station wagons were 16

 

Cars 39   

Minivan 19   

SUV 21

Pickups 26

 

[TwoCitiesCapital]

If you could do basic maintenance yourself, then a well-maintained, low mileage Porsche Boxster / Cayman / 911 below $30k. There is a good chance that you'd be able to sell it for about the same or even at a higher price in the future.

 

I've been running this experiment myself for the last 2-years.

 

Purchased a 2003 Carerra with 55k miles for about 24.5k at the end of 2017.

 

Have had about 4.5k in basic and preventative maintenance on it (oil changes, new water pump, new clutch, IMS bearing, new air filters, new headlight bulbs, etc) so call my total all-in on ownership at 29k.

 

Ran the regression of what I could sell it for at its current milage against the offer on about 20+ 2002-2004 Carerras recently and looks like I could probably get out of it for roughly ~24k. Depreciation has been 0 over 2 years even with 20k extra miles I've put on it. 

 

Cost has come out to about $2,500/yr in what was mostly optional/preventative maintenance and should only get better over the next year or two barring anything major breaking.

[CorpRaider]

The black market arms dealers, etc...on Amazon Prime's Jack Ryan series rave about the high quality and durability of Toyota trucks.  For some reason, I found this highly persuasive.

[nodnub]

A guy I know once responded to another fellow who was saying: "This guy is really cheap, he must have a lot of money"

 

"To have money, you must make some first."

 

So the best car for a value investor would be a really rare vehicle that will appreciate in value.

 

Cardboard

 

A lot of my fellow employees are from Prague. One of the guys I work with bought a 70k Volvo x60 here in the states. He said that in two years when he returns he can resell the car in Prague and get 100% if not more back. Apparently he calculated the shipping and duty costs.

 

I have not verified it myself, but seems like an interesting angle to take. Have to say I’m quite skeptical about it.

 

In some countries you can import a used personal vehicle without paying much import duty.  The import duty in some countries (e.g China) is very high on "luxury" foreign cars. This can make it profitable to import used cars after owning them overseas for a few years. 

[Guest cherzeca]

I dont understand the topic.  a value investor might like cheap stocks AND expensive/overpriced fast cars, right? especially if his cheap stocks do well

[Lakesider]

A value investor tries to get more value than they pay for.

[Guest cherzeca]

A value investor tries to get more value than they pay for.

 

good idea for appreciating assets.  dont see it for depreciating assets imo.  I suppose a true value investor would buy a Mercedes 300sl gullwing.  and not drive it.

[clutch]

A value investor tries to get more value than they pay for.

 

good idea for appreciating assets.  dont see it for depreciating assets imo.  I suppose a true value investor would buy a Mercedes 300sl gullwing.  and not drive it.

 

Maybe one way to look at this is what is the "intrinsic value" of owning a particular car? For me, every moment of driving my 06 cayman s was so enjoyable, so that intrinsic value was much greater than the cost of ownership. I also had almost 0 depreciation over 3 years with that car, btw.

 

[james22]

A value investor tries to get more value than they pay for.

 

And car guys get more value from their cars than not-car guys, whatever the relative cost.

 

If you're not a car guy, buy a used Toyota Camry. But however inexpensive it'll be, it'll be a cost.

 

If you're a car guy, invest in whatever you love. It'll pay dividends in entertainment.

[rkbabang]

I've had bad luck with Ford and Chevy and good luck with Toyota and Hyundai.

 

I'm still driving my 2007 Hyundai Elantra and my 2006 Toyota Sequoia Limited, I hope to keep at least the Sequoia another 5 years or more, the Elantra has over 230k miles so I don't know how much longer it will run for, but knock on wood it is running great right now.

 

Someday when it is time to replace them, I'm not sure if I will go Toyota SUV and Hyundai compact car again or step up to Lexus and/or Genesis.  I will probably step down in size from the Sequoia next time and either get a 4Runner or a Lexus GX460.  For the Elantra I'll either get another Elantra or step up to a Sonata or even to a Genesis G70 or Lexus IS. Cars are too expensive to experiment with other companies that I don't trust.  Whatever I buy I will want to drive them another 10-15+ years for well over 200K miles.

 

[CorpRaider]

Value stocks + glamour cars? 

[Guest cherzeca]

Value stocks + glamour cars?

 

for a value investor who knows what he/she wants, of course.  can ask the same question about wine, cigars etc.  you have to pay up for quality, and the intrinsic value is in the quality when you can afford the price

[rkbabang]

Value stocks + glamour cars?

 

for a value investor who knows what he/she wants, of course.  can ask the same question about wine, cigars etc.  you have to pay up for quality, and the intrinsic value is in the quality when you can afford the price

 

"you have to pay up for quality"

 

That depends on your definition of quality.  You can get a "quality" car brand new for ~$20K  (Toyota Corolla or Hyundai Elantra) if by "quality" you mean dependable car that will run for more than a decade with little to no problems whatsoever.  If by "quality" you mean "luxury" and/or "technology" regardless of the dependability, then you are correct.

[Guest cherzeca]

Value stocks + glamour cars?

 

for a value investor who knows what he/she wants, of course.  can ask the same question about wine, cigars etc.  you have to pay up for quality, and the intrinsic value is in the quality when you can afford the price

 

"you have to pay up for quality"

 

That depends on your definition of quality.  You can get a "quality" car brand new for ~$20K  (Toyota Corolla or Hyundai Elantra) if by "quality" you mean dependable car that will run for more than a decade with little to no problems whatsoever.  If by "quality" you mean "luxury" and/or "technology" regardless of the dependability, then you are correct.

 

this has been discussed above in thread but I for one think it is an important point.  in investing, success is measured in gains and we on this site think value investing is a very good process to achieve that.  in our life dealing with possessions, success is measured in enjoyment/satisfaction, and there are many paths on that yellow brick road.  perhaps we should start a thread dealing with family members... ;)

[rkbabang]

perhaps we should start a thread dealing with family members... ;)

 

Oh boy.  People think the Politics section is bad...

[bizaro86]

perhaps we should start a thread dealing with family members... ;)

 

Oh boy.  People think the Politics section is bad...

 

No kidding. Somehow I don't think "buy low, sell high" is the optimal mental model for family members...

[Jurgis]

perhaps we should start a thread dealing with family members... ;)

 

Oh boy.  People think the Politics section is bad...

 

No kidding. Somehow I don't think "buy low, sell high" is the optimal mental model for family members...

 

I did not realize you could sell family members. Where do I sign up?

 

How do you determine cost basis? How do you add the ongoing expenses to the cost basis to lower realized gains? Is the person sold treated as a capital asset or as a collectible? So many questions...

[Lakesider]

A value investor tries to get more value than they pay for.

 

good idea for appreciating assets.  dont see it for depreciating assets imo.  I suppose a true value investor would buy a Mercedes 300sl gullwing.  and not drive it.

 

Dont forget about opportunity cost when valuing something. A depreciating asset can have value if it depreciates less than the alternative.

[rkbabang]

perhaps we should start a thread dealing with family members... ;)

 

Oh boy.  People think the Politics section is bad...

 

No kidding. Somehow I don't think "buy low, sell high" is the optimal mental model for family members...

 

I did not realize you could sell family members. Where do I sign up?

 

How do you determine cost basis? How do you add the ongoing expenses to the cost basis to lower realized gains? Is the person sold treated as a capital asset or as a collectible? So many questions...

 

Maybe a place to start your research:

 

The Price of Pain and the Value of Suffering

https://www.psychologicalscience.org/news/releases/the-price-of-pain-and-the-value-of-suffering.html

 

[Guest cherzeca]

perhaps we should start a thread dealing with family members... ;)

 

Oh boy.  People think the Politics section is bad...

 

No kidding. Somehow I don't think "buy low, sell high" is the optimal mental model for family members...

 

I did not realize you could sell family members. Where do I sign up?

 

How do you determine cost basis? How do you add the ongoing expenses to the cost basis to lower realized gains? Is the person sold treated as a capital asset or as a collectible? So many questions...

 

...so little time