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Drive a Gladiator for only 1 year and sell - how much will it cost me?

Reeb65

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Well, I’ve done well and I’m retired in my 30s. I’ve driven a Prius for the last 11 years.

I want to drive a different new/cool vehicle every year for the rest of my life!

My budget is $8500/year. So in essence I’m willing to throw away $8500/year if it allows me to drive a new/different/cool vehicle every year.

How much would it cost me to start with a Gladiator and drive it one year? What trim holds value the best?

Purchase price = ?
1 year resell price = ?

My state tax rate is 3% on a vehicle so I’d like to figure that into my $8500 too.

Purchase price of vehicles is capped around $60,000.
You may have asked the wrong group for financial advise because most of us just paid a ransom fee to drive a mid size pick-up at a full sized price!
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Eddiehaskell

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What does the $8500/year cover? Are you writing a check for the $50k-$60k vehicle and anticipating a $8500 loss including taxes? Or are you looking to finance and pay $8500/year?

If financing, I don’t see where you’re buying a $50k+ out-the-door car at $708/month without additional cash down and/or a lengthy loan term. Say it’s on the low end of the range and it’s exactly $50k all in. That’s already about $9500/year in just payments for a 72 month term with zero down. Then factoring in depreciation, insurance costs, etc. you’re more than double your $8500 budget.

Am I thinking too much into this? I’m confused.

I think you’re better suited getting a low mileage lease. People sell off their leases all the time.
The first one. I write a check for say $50,000. Drive the car a year and sell it.

Hopefully I come out losing less than $8500 for the year. The $8500 includes all taxes/fees but doesn’t include insurance as I would buy that anyway.

If it works and I could average $8500/year, I’d be out $85,000 over 10 years. But heck, if I come out on the other side in 2030...happy, healthy and having driven 10 cool cars...I’ll consider it a life experience and win all around.

When you think about it, I would probably otherwise spend $40k (purchase price + maintenance) over 10 years if I was super practical and bought a mom car like a CRV. But basically I would be spending $45,000 ($85,000 - $30,000).

***$45,000*** to drive a new **cool** sometimes high performance car every year for 10 years...sounds like a deal and escape from the monotony of life.

Imagine the fun and stories you’d be able to tell about owning (brand new as they come out!) some of the coolest cars of the last decade.

Per dollar spent I’d likely be in the top 1% of car guys when it comes to unique experiences. And heck, maybe I keep it going and do it until I’m 90...how cool would that be?

Another thing to factor in is that with a 1 year ownership period I won’t be afraid to actually use the vehicles for what they were designed for. After a year, detail the heck out of it, fix any blemishes and put the vehicle on the market.
 

Ichthus

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The first one. I write a check for say $50,000. Drive the car a year and sell it.

Hopefully I come out losing less than $8500 for the year. The $8500 includes all taxes/fees but doesn’t include insurance as I would buy that anyway.

If it works and I could average $8500/year, I’d be out $85,000 over 10 years. But heck, if I come out on the other side in 2030...happy, healthy and having driven 10 cool cars...I’ll consider it a life experience and win all around.

When you think about it, I would probably otherwise spend $40k (purchase price + maintenance) over 10 years if I was super practical and bought a mom car like a CRV. But basically I would be spending $45,000 ($85,000 - $30,000).

***$45,000*** to drive a new **cool** sometimes high performance car every year for 10 years...sounds like a deal and escape from the monotony of life.

Imagine the fun and stories you’d be able to tell about owning (brand new as they come out!) some of the coolest cars of the last decade.

Per dollar spent I’d likely be in the top 1% of car guys when it comes to unique experiences. And heck, maybe I keep it going and do it until I’m 90...how cool would that be?

Another thing to factor in is that with a 1 year ownership period I won’t be afraid to actually use the vehicles for what they were designed for. After a year, detail the heck out of it, fix any blemishes and put the vehicle on the market.
With a Wrangler or Gladiator you will do just fine. I think you understand that there is always risk involved, but the odds are probably on your favor. Historically, having watched Jeep values pretty closely over the past 15 years, the Wrangler models depreciate very little in the first 3 years, take a bit of a tumble in years 4-7, then kind of level off until the miles break into the 170k+ range, tumble again, but hit a basement around 35-40% of their original purchase price until rust takes over. If you purchase a Gladiator from one of the dealers selling at 7% below dealer invoice, you would be writing a check (before taxes and fees) for about $50k on a Jeep with an MSRP of $55k. 12 months from now an uninformed buyer will see a truck at a dealer with the same options with an MSRP of $56k+ and think they are getting a bargain by buying yours for $50k.

The problem you’ll have is with premium vehicles that depreciate rapidly, or those “fun” cars that buyers will assume are used and abused in that one year. For some of those, you may be better off studying depreciation values and cars that can be purchased off a 24 month lease and sold a year later without excessive loss.

Honestly, I’ve told my wife that I fully intend to enact a similar plan in the future, but with the “dream cars of my youth”...vehicles that can be purchased one year, sold a year later with minimal loss. Honda S2000, Porsche Boxster, early NSX, BMW M Coupe, etc.
 
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longms

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Making decisions must be hard for you with all of this analysis. Go to a dealership and start talking to A PERSON!!!
 

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The first one. I write a check for say $50,000. Drive the car a year and sell it.

Hopefully I come out losing less than $8500 for the year. The $8500 includes all taxes/fees but doesn’t include insurance as I would buy that anyway.

If it works and I could average $8500/year, I’d be out $85,000 over 10 years. But heck, if I come out on the other side in 2030...happy, healthy and having driven 10 cool cars...I’ll consider it a life experience and win all around.

When you think about it, I would probably otherwise spend $40k (purchase price + maintenance) over 10 years if I was super practical and bought a mom car like a CRV. But basically I would be spending $45,000 ($85,000 - $30,000).

***$45,000*** to drive a new **cool** sometimes high performance car every year for 10 years...sounds like a deal and escape from the monotony of life.

Imagine the fun and stories you’d be able to tell about owning (brand new as they come out!) some of the coolest cars of the last decade.

Per dollar spent I’d likely be in the top 1% of car guys when it comes to unique experiences. And heck, maybe I keep it going and do it until I’m 90...how cool would that be?

Another thing to factor in is that with a 1 year ownership period I won’t be afraid to actually use the vehicles for what they were designed for. After a year, detail the heck out of it, fix any blemishes and put the vehicle on the market.
What you need far more than a new car every year is an investment advisor.

Either your wealth is sitting in cash losing 2-3% annually, in additiontto whatever rate of erosion you have determined or :
You are going to cash out investments conservatively losing 8% plus compounding in perpetuity.
Then you are going to pay 20% income tax (conservatively) on that money, so you'll need to cash out $60k to have $50k on hand and you are going to do that every year.

I don't care how much money you have, if you manage it like that you will soon be broke.
 

Oilburner

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1 year from now:

FOR SALE - 2020 Jeep JT (purchase price - $8,500)

Or

Go purchase a brand-new 2021 JT for Jeep financing.


Which do you think most would do?
 
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Eddiehaskell

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1 year from now:

FOR SALE - 2020 Jeep JT (purchase price - $8,500)

Or

Go purchase a brand-new 2021 JT for Jeep financing.


Which do you think most would do?
Well...I was here to ask if the Gladiator would actually hold its value that well. I believe some vehicles would.

This says a Wrangler drops 30% in 5 years:
https://www.iseecars.com/cars-that-hold-their-value-study

If this is right, 30% of $40k would be $12,000 over 5 years. So how much did the Wrangler drop in year 1? Surely no more than $7-8k.
 

mmollo

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LOL, he had to drive a Prius for 11 years.

I'd rather work into my 60`s

And if his vehicle depreciation budget is $8500 a year, I'm thinking his idea of retirement and mine are entirely different.
Agreed,
I think the OP should stick with the Prius or go back to work. He’s killing too many brain cells working around an $8,500 a year vehicle budget.
 

Ichthus

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What you need far more than a new car every year is an investment advisor.

Either your wealth is sitting in cash losing 2-3% annually, in additiontto whatever rate of erosion you have determined or :
You are going to cash out investments conservatively losing 8% plus compounding in perpetuity.
Then you are going to pay 20% income tax (conservatively) on that money, so you'll need to cash out $60k to have $50k on hand and you are going to do that every year.

I don't care how much money you have, if you manage it like that you will soon be broke.
That’s a lot of algebra, but it ignores basic arithmetic. He’s only investing $50k the FIRST year, with the expectation that he’d get at least $41500 on trade and supplement with another $8500ish each year.

If the dude is in his 30’s and retired and able to write a check for $50k, I don’t think he needs us to worry about whether or not he has a financial advisor. His back story is really just out there to justify the question: “can he expect to lose LESS than $8500 on his truck in a year of driving?” I think we should all be able to agree, the answer is Yes
 

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If my man was brilliant enough to retire at 32, why the heck is he soliciting any advice from the internet?
Consult your financial advisor, attorney, investment advisor and accountant.
 

Ichthus

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Well...I was here to ask if the Gladiator would actually hold its value that well. I believe some vehicles would.

This says a Wrangler drops 30% in 5 years:
https://www.iseecars.com/cars-that-hold-their-value-study

If this is right, 30% of $40k would be $12,000 over 5 years. So how much did the Wrangler drop in year 1? Surely no more than $7-8k.
Eddie, the last 2 Wranglers we traded in played out like this:

2013 JKU Sport, paid $28k in July of 2012. Traded after 3 years w/45k miles for $26,500
2014 JKU Sport, paid $27,500 June of 2013. Traded in 10/19 2/80k miles for $21k.

I think you’ll do just fine...but beware falling in love with Jeep. Then you’ll risk investing in mods that don’t have much return on investment, unless you pay for good stuff and find the right buyer.

Also, since this is mostly about fun, make sure you consider a 2 door Wrangler at some point. The “fun-to-drive” factor on those is a level beyond the heavy 4 door models.
 

Ichthus

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If my man was brilliant enough to retire at 32, why the heck is he soliciting any advice from the internet?
Consult your financial advisor, attorney, investment advisor and accountant.
:movember:Because not a single one of those people is worried about how much FUN he can have with a new car every year. They want to make him more money...not throw it into cars. :rock:
 

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I think most of us spend 8,500 in mods a year lol.....then another 8500 in gas haha
 
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Eddiehaskell

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If my man was brilliant enough to retire at 32, why the heck is he soliciting any advice from the internet?
Consult your financial advisor, attorney, investment advisor and accountant.
Talk to myself? I have too much time for that. :)
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