The fact that my husband wants to retire one day has changed my budgeting habits — and that can be a good thing. For example, I now focus more on making cash purchases. I’m getting rid of existing debt and I’m paying cash for big purchases. Because of that, I have multiple savings accounts set up to save for long-term goals.
For example, I know that before my husband gets into his walks, dog-exercises-rinse golf and repeat years, we need to have the money to buy a new car. Even if we can make his old car last a few years after retirement, 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, I was interested to read that Costco is offering a special limited time sale on new Audis. Through October 31, 2023, Costco members who purchase or lease 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
Well, 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 of just $72,000. Even with a $5,000 down payment, I would need to have $68,000 when my car buys the farm. What? could i do it Maybe, but at the expense of something else.
I looked at the prices of two year old gently driven models and found one with 6,200 miles for under $39,000. Given Audi’s reputation for longevity, I believe it’s a purchase I would feel good about.
That money is depreciation
All cars lose value over time. At the five-year mark, most cars have lost half their value — although the Audi brand consistently ranks high in value retention. In other words, it is less likely to drop to the same level as other car brands.
Still, depreciation is a factor to consider when considering whether to buy a new car, even if you don’t use the car 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 it be better to buy a low-mileage Audi that is already two years old and let someone else eat the wear and tear?
Add this because I plan to buy a low-mile used Audi: EnginePatrol.com estimates that the Audi e-tron will last about 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 is nothing quite like buying a brand new car, and I get it. If money is no object and you’re in the market for a car, Costco’s deal may be just what you’re looking for. However, if it’s the new car smell you’re interested in, there are some new car air fresheners on the market that won’t break the bank.
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