The fact that my husband wants to retire one day has turned my budgeting habits upside down — and that may be a good thing. For example, I’m now much more focused on making cash purchases. I’m getting rid of existing debt and I’m paying cash for major purchases. For that reason, I have several savings accounts set up to save for long-term goals.
For example, I know that before my husband moves into his walk the dogs–work out–golf–rinse and repeat years, we need to have money put away for a new car. Even if we can make his old car last for a few years after he retires, at some point we’ll need something more reliable. I want an Audi. I tell him it will be his car, but we all know the truth.
And so, it was with interest that I read Costco is offering a limited-time special offer on new Audis. Until Oct. 31, 2023, Costco members who purchase or lease select 2023 or 2024 models can get up to $5,000 off. We may be years away from needing a new car, but at first blush, the deal seemed pretty sweet.
Maybe not so sweet
Okay, I “thought” I wanted an Audi e-tron until I checked the manufacturer’s suggested retail price (MSRP). The entry level e-tron with base-level trim carries an MSRP just shy of $72,000. Even with $5,000 off, I would need to have $68,000 put away by the time my old car buys the farm. Could I do it? Maybe, but at the expense of something else.
I checked the price of gently driven two-year old models and found one with 6,200 miles on it for just under $39,000. Given Audi’s reputation for longevity, I believe it’s a purchase I would feel good about.
The money suck that is depreciation
All vehicles lose value over time. At the five-year mark, many vehicles have lost half their value — although the Audi brand consistently ranks high in value retention. In other words, it’s less likely to depreciate at the same rate as other car brands.
Still, depreciation is an important consideration when you’re thinking about whether you want to buy a new car, even if you don’t use the vehicle for business. Does it make financial sense for you to get $5,000 off a car that, according to CarEdge, will lose $5,428 in value after one year, and $11,462 after two? Or, would you be better off buying a low-mileage Audi that’s already two years old and allowing someone else to eat that depreciation?
Add this to the reasons I plan to buy a low-mileage used Audi: EnginePatrol.com estimates that the Audi e-tron will last around 300,000 to 400,000 miles. Even if I buy a two (or three) year old model, it’s likely to be around for a while.
For some people, there’s nothing quite like buying a brand new car, and I get that. If money is no object and you’re in the market for a car, the Costco deal may be just what you’re looking for. However, if it’s the new car smell you’re interested in, there are some remarkable new car air fresheners on the market that won’t deplete your personal finances.
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