Budgeting for your Cadillac

[Bruce Nunnally]

How much do you budget for your Cadillac?

"Well Bruce, my payments are $xxx cause I got a great deal when they had the cash back and finance incentives!"

"Heck Bruce, my Cadillac is PAID-FOR, and I'm cruisin".

Yes, but how much do you budget for your Cadillac?

Let's say your Cadillac is paid for (congrats!). If it IS under warranty, you still would expect to have to put gas in it of course, and insurance costs, and they are regular out of pocket expenses. But you also have to plan for oil changes ($75 ea for synthetic), tires ($xxx/change), and some maintenance items like batteries now and then. So let's say $600-1000 in tires every 2 years, $75 oil change twice a year, or a savings budget of $50 a month while the car is in warranty.

If your Cadillac is NOT paid for, but is under warranty, then you have the payment of $xxx plus the tires/oil/battery planning of $50/month or so.

If your Cadillac is not under warranty any longer, you should also budget for repairs as well as maintenance. On a 5-7 year old car you may have one or two A/C or transmission or brakes or other major repairs for $1000-$2,500 per year. So say $200/month plus the $50/month of maintenance, or $250 per month repair & maintenance, plus whatever payments you still owe on the Cadillac. The nice feature of setting these funds aside monthly instead of waiting for a big repair is that it takes that dread/depressive reaction to the news that you need a $2,500 transmisison repair if you know you have that in your repair budget.

Now, to each of these, what do you add to save for the NEXT Cadillac? For example, I am enjoying the heck out of my 2005 CTS. I have payments of $xxx and maintenance&repairs for oil/tires/non-warranty stuff, and I have an additional savings/month set aside that I think of as replacement funds. I know when I get ready to sell/trade the CTS, I will want some cash in hand to help offset the cost of the next Cadillac.

A way to save for the next Cadillac is to plan to drive the Cadillac for 5 years, but only take a 4 year note on the car (assuming you can afford to). Then, during the 5th year, after the Cadillac is paid off, keep making payments into your Cadillac savings fund. That should give you several $K of downpayment for the next car. It also keeps you from expanding your home budget in other areas that might eclipse your car budget.

How much to save? Look at the likely cost of the next Cadillac, the likely depreciated value of your current Cadillac, the amount of payments you can afford to budget, and you know how much cash downpayment you will need when you go to get the next one. Divide by time, and you know how large your replacement fund needs to be each month over the life of your current Cadillac.

How do you plan for repairs on your current Cadillac? How do you budget for your next Cadillac?

[OynxSTS]

Not sure I understand your question. I really don't budget for my transportation... I believe in the pay as you go plan...

I own a 2002 STS that I bought outright in fall 2004. It is rarely a good idea to buy an asset that depreciates on credit... Just my opinion

My car eats annually

Fuel.........$3,000CAN (but gas costs about $4.00 a gallon here)

Tires...........$500CAN even with my driving style they last an easy 3 years and cost about $1500 a set

Brakes.........$50CAN like my tires my brakes last 3 years. Pads on this car are easy DIY

Oil................$24CAN wow $75 a change! I change my own oil twice a year for $24.

Gizmos........$300CAN on my car about 2 "gizmos", "sensors", etc have conked out each year...

Insurance $1,700CAN Government Monopoly..

Cosmetics...$150CAN I get her detailed twice a year

Cooling.........$10CAN Mostly due to this site I "flush" my radiator every other year.

I think that adds up to a total annual bill of $5734... 52% fuel!

BTW About half the time when a "gizmo" goes you "have" to fix it (crank sensors)... some times you can live with it (steering sensor) I usually always fix them and do the work myself.

I also plan on an other $1000 a year for something big to fail. If nothing fails after 3 years we go to Maui... If something fails we go to Maui anyway

[Cadillac Jim]

I budget about $250 a month for maintenance. I've had the car 9.5 years and the only big ticket item has been the remanufactured engine, for about $6500 installed. The next biggest thing was the A/C compressor, at $650 new from a dealer in 2003. Other than that, mostly tires, batteries, battery cable, bulbs, and regular oil changes with lube. I've had the transmission serviced three times, but the last two times were flushes. The next time will be a *real* transmission service.

On warranty, the only real fixes (not dealer paranoia or some such) were some cosmetic things right off the lot, and the radio about a year later.

I never have liked the windshield, because it gets wavy right at the hood level. It got a star in it about 8 years ago, and sand pitting is making a case for a new one, but I keep putting it off.

So far, this car has beat the $250 monthly budget. With 125,000 miles, though, I expect that the law of averages will manifest itself eventually, and I wouldn't be surprised at sooner rather than later.

I have no plans to buy another car. If I did, it would probably be a used CTS with the 3.6 and 6-speed, preferably with direct injection. If I win the lottery, it will be an STS-V -- but I don't play the lottery.

[Poobah]

I guess I'm just not a budgeting type of guy. I have no idea what my car costs per month. I own it outright (making car payments is a nuisance I try to avoid). My wife handles the insurance out of her part of the bills and the rest I just take care of as it comes along.

[Rickster]

I expect to spend about $2000 a year on maintance. I do not save for it, but I am ready to spend it. Some years it only $500 for minor stuff but other years it can be 3 or $4000. That would be year with tires, brakes and major tune ect.

[bc6t]

Maintenance - what's that? I suppose I subscribe to "if it aint broke..."

Have '98 STS with 110K - bought in 2003 - Pay as you go annual budget:

Gas: $3000 CND (14 mpg)

Total items mainatined in 4 years of ownership:

- 1 set of HR tires (ZR too much $) for $600 CDN (first year) - probably 4 year cycle

- Front pads and rotors for $150 CDN - probably 4 year cycle

- Plugs & wires at 100K for $150 CDN - probably 8 year cycle

- FPR at $65 CDN - probably 8 year cycle

- 1 air filter at $15 CDN - probably 4 year cycle

- 1 battery at $160 CDN - probably 8 year cycle

- Need to do coolent soon - overdue by 4 years - I know - not too smart!

- Steering rack a bit stiff - good arm workout when parking...

Annuallized costs: $3238 CDN (93% Gas)

Guess I have been pretty lucky to date...

[steve6]

I have never owned a car with a warranty, and I expect, and I always tell people who dont have a car with a warranty to spend $100 a month min in maintence. If you get away with nothing one month, well just flow it over into next months because what repair only costs $100 these days.

If you go a few months without an issue, well its always good that a few hundred dollar repair might come up.

I see too many people expecting their car with 200,000 km's on it to just keep going and going without maintence. And usually the worst happens.... (makes me think of my buddy who has a 2003 camry with about 130,000 km's that just had to replace the engine because of sludge, hahahahahah , poor bastard had just finished paying it off too)

[JimD]

....

- 1 air filter at $15 CDN - probably 4 year cycle

- 1 battery at $160 CDN - probably 8 year cycle

- Need to do coolent soon - overdue by 4 years - I know - not too smart!

- Steering rack a bit stiff - good arm workout when parking...

Annuallized costs: $3238 CDN (93% Gas)

Guess I have been pretty lucky to date...

Four years on an air filter, 8 years from a battery, and 4 years overdue on a coolant change. Am I reading those numbers accurately?

If I were you, I would run out right now and buy one lottery ticket and get ready to live in luxury.

[OynxSTS]

Annuallized costs: $3238 CDN (93% Gas)

Guess I have been pretty lucky to date...

Four years on an air filter, 8 years from a battery, and 4 years overdue on a coolant change. Am I reading those numbers accurately?

If I were you, I would run out right now and buy one lottery ticket and get ready to live in luxury.

If you were to see Tom's house, you would agree that he can skip the lottery ticket... He already has the luxury thing down pat

I would say 4 years on an air filter is not uncommon here... Clean air in the pacific northwest... 8 years on a battery is about right too... Coolant...

[bc6t]

Yeah, I know the coolent change is pretty stupid and I will do it this month (given head gasket issues). However, the other intervals are not that uncommon - I routinely inspect the air filter and change the oil myslef and the car has been really good to me. Minor creaking & stuff is to be expected.

As a matter of fact I have owned over 25 cars since highschool and GM's have been the best for maintenance. My last longterm car was a 1990 IROC-Z 5.7L (85K) that I owned for 10 years. Total maintenance was 3 alternators, 3 sets of tires (too many burnouts), 1 water pump, 1 tune-up (plugs), 3 air filters, 1 serpentine belt, routine oil changes, and 2 changes of brake pads. I would like to see any import beat this!

[WarrenJ]

I also plan on an other $1000 a year for something big to fail. If nothing fails after 3 years we go to Maui... If something fails we go to Maui anyway

I like your thinking!

Mine gets all the TLC it needs, but I don't keep track of the dollar amount except as a very rough figure inside my noggin.

Since its purchase (9/6/06) I've replaced the power mirror switch and changed the oil once; wiper blades twice on the driver's side (that's a sore subject).

I usually get 30K+ miles on front brakes. To paraphrase someone here, "braking is just poor planning." Dunno about the rear brakes; my long term memory isn't long enough.

I live modestly (financially speaking) and save as much as I comfortably can. Large repairs, should they happen, are a nuisance not a calamity.

It gets a tank of V-Power (a top tier gasoline) every 12-14 days.

My last car loan was 1971.

Regards,

Warren

[Bruce Nunnally]

Another data point: a lease on a 2007 CTS from GMAC for 15k miles a year assumes a current residual value for the car after 3 years of 51%. One could say then that if you buy a new 2007 CTS and drive it for 3 years, it would cost you approximately 1/2 of the sales price in depreciation. So given that the CTS sells for $28-38K, it would "cost" around $5K per year.

If driving an older Cadillac is costing you less than $5K per year, then all good. One has to be careful however not to spend $3K/year on depreciation of a used car AND $2K/year on repairs, and think you are saving money by driving a 5 year old Cadillac when you actually were spending the same net as you would have on a new or 1 year old model, albeit at a lower out of pocket cost.

[BigCat83]

I try to stash 50 bucks a week for parts, toys and repairs (help my son take care of his '97 Eldo as well).

[OynxSTS]

If driving an older Cadillac is costing you less than $5K per year, then all good. One has to be careful however not to spend $3K/year on depreciation of a used car AND $2K/year on repairs, and think you are saving money by driving a 5 year old Cadillac when you actually were spending the same net as you would have on a new or 1 year old model, albeit at a lower out of pocket cost.

True, especially your last point "lower out of pocket cost". Its always better spend less money up front even if the cash flow over the term of the investment is worse...

Two guys: each with 30K in their pocket one spends 30K for a new car and in three years it is worth 15K... Guy #2 buys a three year old car for 15K and spends 2 grand a year fixing it after three years his car is worth about 10K.

At the end of 3 years both sell their cars... Guy one has 15K in his pocket, Guy two has 19K... Plus Guy #2 has had at least 9K in the bank the whole time that he could invest, pay down his mortgage, etc.

Used car guy will win almost every time.

Even if he spends 3 grand a year on repairs he is out 14K and is still money ahead... he has to spend almost 4K a year in repairs before he falls behind.

This is mostly a result of the massive depreciation that most new cars experience in there first two or three years. BTW 51% in three years is quite good... When I bought my 2 1/2 year old STS it had depreciated over 60%.

Where I live Caddies depreciate about 30% in the first year 20% in the second year 15% in the third and then about 10% every year after that.

[Bruce Nunnally]

The 51% is the rate GMAC uses for their standard leases on the 07 CTS right now apparently (36mo/15K-yr). Does not mean it is meaningful as the actual expected resale (although it should), but it is the risk level they are taking for needing to resell a lease return in 36 months.

However, I think the 'trade-in' on KBB for my 2 year old 2005 CTS is $19K, or around 61% of its original value; retail is $21K or so. I could believe the book trade-in value might be $16K in another year. The KBB tradein for a 04 CTS 3.6 w/36k miles is around $17K now; 45K miles $16K.

Now, as to whether one can actually get "trade-in" value for a car is open to negotiation of course.

[WarrenJ]

Now, as to whether one can actually get "trade-in" value for a car is open to negotiation of course.

Yes, there is that.

Regards,

Warren

[WarrenJ]

If driving an older Cadillac is costing you less than $5K per year, then all good. One has to be careful however not to spend $3K/year on depreciation of a used car AND $2K/year on repairs, and think you are saving money by driving a 5 year old Cadillac when you actually were spending the same net as you would have on a new or 1 year old model, albeit at a lower out of pocket cost.

Good grief!

My '95 Eldorado got a water pump and a radiator in the three years I owned it. Oops, Boston struts as well. No tires, no brakes, no battery. Ah, but windshield wipers! Still a sore subject.

I can't even conceive of spending $5,000/year on maintenance. At $2,000/year I'd likely push it over a cliff. A tall one.

I'm into the new steed for window tint, monogrammed carpets, and a power mirror switch which I could have lived without since it was so highly intermittent.

Maybe because we deal with so many problems here we forget that many Caddys out there run very nicely for many miles, thank you.

I'm at 66K miles.

Regards,

Warren

[OynxSTS]

I can't even conceive of spending $5,000/year on maintenance. At $2,000/year I'd likely push it over a cliff. A tall one.

Amen! to that! Trying to justify a brand new car based on the financials is very tough. There is just too much depreciation in the first three years of ownership.

And yes I have owned "brand new cars". My wife and I have personally purchased 4... Two of those where "compensation" company cars... I guess those don't count... And at least double that used (8 or 9, lost track over the years). I've been mostly happy with all of them (new and used).

But with respect to the financials, on most used cars I have owned I have usually come close "break even" or better. For example, when I totaled my Allante, I did so well that I used the settlement for a down payment on my house. OTOH, on every new car I have owned either I or the company has "lost" at least 1/2 of the cost of the car over the car's life.

If you like brand new cars (and who doesn't) I say go for it!... Just don't do it trying to save money. Especially on a Caddy!

[Texas Jim]

Warren,

Agree 100% that most Cadillacs run a long time and don't require spending lots of money on them. No way would I ever consistently spend 2k to 3k year after year on repairs. Here on the forum, we usually only hear about the ones that are having problems. The vast majority of people that are NOT having problems don't seek out the forum and post... "Hey, mine is running GREAT."

I bought a 1980 DeVille that was only 6 months old. Drove it till 2000. Thats 20 years and over 250,000 miles. In that time, I put one alternator, one set of shocks, a couple of A/C relays and hoses and belts on it a couple of times. It was about the most TROUBLE FREE vehicle I have ever owned. Only put plugs in it one time at about 150,000. The ones I took out looked almost as good as the ones I put in so I kept them. May still have them somewhere.

It still looked good and ran strong but the transmission had started to leak at the front seal when I sold it.

Bought a 1984 Fleetwood Brougham in '85 and drove it till 2001. Put almost 200,000 on it. One Radiator, one water pump, one set of shocks, one air compressor for the level ride and hoses and belts a couple of times. No other major maintainence on either one of them. Have had a few more that were almost as good.