Topic: Is this for real? Glad I don't own one...

[Zoo]

$60000 is a huge expense even if you are a multi millionaire. Perhaps if you can write off part of the vehicle it can offset this a bit. Then again some people spend tens of thousands of dollars on golf and other of life's luxuries. Like others I would snag a 2-3 year old model and appreciate the savings. For others the allure of a brand new luxury auto built to their requests is a Siren call that cannot be avoided.

The funny thing is that many of these folks will be the same one beating me up over a few dollars on a medical device I am trying to sell them or cross shopping a TV to save a few $s; then lose tens of thousands of dollars in depreciation!

Most people with expensive cars I know own business(es), and the vehicle expenses does not come out of personal accounts.

That might explain why some people might lose so much money on depreciation like this. As others are saying this might be just what they really enjoy (driving am expensive, and luxurious automobile) and expenses be darned. I certainly have some hobbies that are money draining with little to no instrinsic value except for the pleasure they give me. My watches and video games (and a DVD collection) are just a couple of examples of things I spend money on which other people find wasteful. I'm sure we all are guilty of this to some extent.

[Leviathan]

Probably a divorce and they're liquidating to pay lawyers 

[quadzilla]

Surely if you can afford it why not?  Everyone has a different perception of what is expensive and what is not.  For some having a brand new SL is worth the loss when it comes to selling it.  When you buy a new model brand new, you see very few on the road, it's the exclusivity that people pay for.

This year, I blew a few hundred dollars on a video game system and video games.  They have catastrophic depreciation and no redeeming social value.  Some would see that as a total waste.  But so what?  It's my money, I could afford it, and it was fun for me.  This is the same thing, for someone who has a lot more money.

Exactly, I find it quite amusing when people complain and judge other people spending priorities without understanding the individual’s situation, very immature.

I agree. Also nobody here knows what the original owner sold the car for. This is just an ad for what somebody else is selling it for.

People think that me spending $2500 for a bicycle is stupid. Then I go ride along guys with $5000+ bikes and mine seems like a bargain   

[random006]

Surely if you can afford it why not?  Everyone has a different perception of what is expensive and what is not.  For some having a brand new SL is worth the loss when it comes to selling it.  When you buy a new model brand new, you see very few on the road, it's the exclusivity that people pay for.

This year, I blew a few hundred dollars on a video game system and video games.  They have catastrophic depreciation and no redeeming social value.  Some would see that as a total waste.  But so what?  It's my money, I could afford it, and it was fun for me.  This is the same thing, for someone who has a lot more money.

Exactly, I find it quite amusing when people complain and judge other people spending priorities without understanding the individual’s situation, very immature.

Have to agree as well.  I've been going through quite the tranformation process myself and with the sale of our former house, I now have the funds to take care of debts, needed purchases, investments AND a bit of fun.  Personally, I would never do what the owner of that car did but to each their own, I say.  There is even the possibility of a new car in my future sometime in the next year or so.  I was going to it earlier but the timing is not right.

[mmret]

So a guy goes and buys an Accord or a Camry, $30k plus taxes. Sells it for $16k three years later. Ends up paying just shy of $5k / yr in depreciation. Lets pretend he makes $75k / yr. That's an income to depreciation ratio of 15:1.

Another guy goes and buys an SL500, loses $30k / yr in depreciation. At the same 15:1, he only has to make $450k / yr to "equalize" with the Accord guy (on this kind of silly metric I just made up).

Lots of people can make $450k / yr, but nobody would bash a guy making $75k for buying an Accord.

[The Mighty Duck]

Most people with expensive cars I know own business(es), and the vehicle expenses does not come out of personal accounts.

Our Ridgeline is a company vehicle, and it's used every day for company business.  But I can't imagine many accountants looking favorably on a Mercedes SL being written off as a "company" vehicle.  IIRC (and this was a several years ago) a car has to be used at least 60% for business use before the government will accept it as a "business expense".

Which is not to say I doubt people do it, and get away with it, but they shouldn't.

[initial_D]

You pay the gov't enuff taxes, they don't ask question. 

[ovr50]

Your point's well taken, but it makes no sense to me why ANYONE does that. Trading in cars in every couple of years just because is pretty stupid IMHO because that's when they depreciate most - you might as well burn that money.  I've always kept my cars for a long time to get the most value from them and only traded them in when I really needed to, so I consider depreciation simply as part of the cost of ownership, like gas and maintenance.

Your approach is very smart financially, but for those who have too much money, why not?  I'm certainly not going to lecture anyone who can afford an SL500 on finances.  So they spend money on cars - if you can afford it, more power (literally) to you.

+1 to that.

[Triple Bob]

"You get what you pay for."  So I've been told.  What did the first guy get for $60K that the next owner didn't get?  Theories of relativity aside, what did those 60 large buy the first owner?

Exclusivity.

It might not be important to you but it is to some.

[tenpenny]

Your point's well taken, but it makes no sense to me why ANYONE does that. Trading in cars in every couple of years just because is pretty stupid IMHO because that's when they depreciate most - you might as well burn that money. 

Many people think the same way about leasing cars.

[tpl]

Most people with expensive cars I know own business(es), and the vehicle expenses does not come out of personal accounts.

Our Ridgeline is a company vehicle, and it's used every day for company business.  But I can't imagine many accountants looking favorably on a Mercedes SL being written off as a "company" vehicle.  IIRC (and this was a several years ago) a car has to be used at least 60% for business use before the government will accept it as a "business expense".

Which is not to say I doubt people do it, and get away with it, but they shouldn't.

I think it is often done in a 2 stage process.The executive who is to have the "benefit" on the M-B  is not actually an employee of the company but he uses a "personal service" corporation to distance himself from the (public) company and that corporation owns/leases the car.  There are ways and they mostly fit in the lacunae of the income tax act.

A few years back, the head of the UK Inland Revenue, gave a talk to the high ups at Revenue Canada and pointed out that there must be some slippage and grease in the tax system to allow the little things otherwise a whole pile of people would find ways to invent some big things and get away with it.
It might be argued that Income trusts were an example of that.

[xviper]

"You get what you pay for."  So I've been told.  What did the first guy get for $60K that the next owner didn't get?  Theories of relativity aside, what did those 60 large buy the first owner?

Exclusivity.

It might not be important to you but it is to some.

The second guy gets the same exclusivity, only a couple years later and a few thousand klicks later and $60 cheaper.  Other than having it earlier, what did the first guy get that was 60 Large more than the second guy?  It's nothing to do with "me".  Try to apply some reasoning to it, K?

[initial_D]

A couple years ago, at a Christmas party, overheard one guy is telling everyone how much he saved by buying a used S-class, one of his friend said, "if you don't have money to buy a new car, just ask" ... the guy was speechless for a few seconds.

[xviper]

^ Loan shark?

[initial_D]

That I am not sure. Buying new expensive cars is a status thing for those guys.

[tenpenny]

The second guy gets the same exclusivity, only a couple years later and a few thousand klicks later and $60 cheaper.  Other than having it earlier, what did the first guy get that was 60 Large more than the second guy? 

He got to have it first.  Some people line up for days to buy Wii, or iPhone, or whatever the newest, latest, greatest.  Some people like to have new shiny toys.  If it's not my money involved, I really don't care.

[The Mighty Duck]

Using that sort of logic, nobody should buy brand new cars, because it's always a losing proposition.  But then there would be no good used cars to buy, and eventually we'd all be left riding horses to work.

Who cares why people choose to buy new?  It just means those who buy used get to reap the rewards later on when the car has depreciated and they sell it...

[safristi]

tpl NAILED IT.................us plebs pay FOOL FREIGHT...No miss-spelling there....

[xviper]

The second guy gets the same exclusivity, only a couple years later and a few thousand klicks later and $60 cheaper.  Other than having it earlier, what did the first guy get that was 60 Large more than the second guy? 

He got to have it first.  Some people line up for days to buy Wii, or iPhone, or whatever the newest, latest, greatest.  Some people like to have new shiny toys.  If it's not my money involved, I really don't care.

I like shiney new things myself, so I understand perfectly why one would want to be the "first".  And like you say, it's not my money, so I don't really care or have any stake in it.  But that's not why I posed the question.  I was pointing out the "you get what you pay for" topic and I already stated that apart from the "theories of relativity", what did the first owner get for his $60K that the next owner didn't get.  "Exclusivity" and being first is an ethereal or esoteric concept and is harder to place a dollar value on.  What I was trying to get at was, what in this lump of metal, plastic composite material and execution of these bits, did the first owner get that he paid $60K more for than what the next guy got?

[Triple Bob]

"You get what you pay for."  So I've been told.  What did the first guy get for $60K that the next owner didn't get?  Theories of relativity aside, what did those 60 large buy the first owner?

Exclusivity.

It might not be important to you but it is to some.

The second guy gets the same exclusivity, only a couple years later and a few thousand klicks later and $60 cheaper.  Other than having it earlier, what did the first guy get that was 60 Large more than the second guy?  It's nothing to do with "me".  Try to apply some reasoning to it, K?

Which bit of "Exclusivity" don't you understand?  When a new car comes out you see very few on the road in the first year, especially if it's low volume.  The first buyer gets to drive around in something that "virtually" no one else has, that is the feeling of exclusivity ,and the reason that low volume manufacturers can charge higher than usual sometimes. E.g. A Pagani/Koenigsegg/Noble/Atom might not be better than a Ferrari or Porsche, but you can bet you will see less of them which raises their percieved value to the people that want (and can afford) these sort of cars.

By the time it's resold a few years later, they are not so "special".  Granted it's the same car, but people aren't wowed by it anymore which is what some people will partly be buying it for.  I thought Merc SL's looked amazing when they first came out, now I just think they are OK as I have seen so many of them. Still a nice car though.