Cost Of Cadillacs

[Bruce Nunnally]

So how much does your car cost you? No, not what you paid for it, or how you paid for it -- how much did it COST?

In my case for example -- I paid $32K as I recall for the 2005 CTS new, and it is worth 9-11K today. So in other words 4 years, 61K miles cost me around $22K, or about $458/month.

Actually, the CTS is paid for now, but let's say one borrowed the money and paid it off over 4 years at 4% -- that would add another $50/month over the same period for a total of $510/month.

The interest expense in this case would have added 48x50=$2,400. I am also ignoring the money I spent on mods, and the money I spent on extending the warranty.

Even if one pays cash for the Cadillac up front, depreciation is still an expense. Yes, you don't incur depreciation unless you sell the Cadillac, but the value changes nonetheless.

Let's say you buy a 1-year old CTS with around 20K miles, and get a *great* deal on it for $28K. Good job, you have missed the first year of depreciation,

which for the 2009 CTS was $11K or almost 1K/month! Next, you drive the CTS for 4 years at 15K miles / year, ending with a 5 year old car with 80K miles worth again around $10K.

Net Cost: $28K in, no interest expense, minus $10K out when you trade/sell the Cadillac, so $18K expense for 4 years. That adds up to $375/month.

How to get the cost under $300/month? If you drive the car for 5 years, the trade value probably drops $2K, so buy at $28K, sell at $8K net $20K / 60mo = $333/mo

At that point the Cadillac is 6 years old with 100K miles, so one runs out of warranty and repair costs start to creep in to offset savings from driving it longer.

Obviously if you are great at selling your Cadillac you can get higher values from it and improve the numbers a bit. I readily admit I am NOT a good used car salesman.

What about a 2 year old car with 40K miles, then drive for 4 years at 15k/year for a total of 6 years and 100K miles?

Hmm -- but price probably near $24K, sell at 6 years 100K miles for $8K, net out $16K / 48 months = $333/mo.

Yes, if you purchase an older vehicle and have good luck with it, or even middling luck with it in terms of repair cost, you can achieve a lower cost per month.

You will still have some depreciation however, usually down to under $2K/year or $150/month, so you can afford a $2K repair per year or so on the same

expense run.

[Texas Jim]

Good analysis.

I need to do some figuring about my next car.

I plan on buying CPO next time..not new, but that will be in another year or so.

[dmk9561]

As one who's inclined to use a car up, I can tell you that the easiest way to get the expenses down is to buy a 5 year old car instead of a 1 or 2 year old one. Let's say you pay cash for an 04 Deville, likely the cheapest used Cadillac from that year. You'd pay $11k-13k depending on equipment and miles. Let's say it has 70k miles and cost $12,000. If you drive it for 6 years and put 100,000 miles on it, the resale value will be about $3,500 or so, but repair costs and dependability will have slipped a bit and a busy man would need a newer car. That's $8,500 to use the car for 72 months, or $118.06 per month. That's enough cheaper to completely ignore the warranty, or buy an aftermarket if you're a paranoid type.

To me, used GM cars are the best deal around, provided you want to keep one until it needs to go. From $5,000 Impalas to $15,000 Cadillacs, a 5 year old GM car is going to be the cheapest dependable transportation that isn't going to be embarrassing to be seen in.

I could make a case for driving a $500 15 year old Saturn or Escort, but that's a different realm of image entirely.

As for imports, I always prefer to buy American. If you need a car to get you to work, I will say that it better be American or Asian. A new European car will do it, but a 10 year old one won't.

[RalPh]

Last year, I sold my '97 and bought an '05 STS.

The MSRP on the '05 was 64K I paid 23K. It cost the original owner almost 14K/yr, in depreciation alone, to put 21,000mi on it.

Today, the car's worth maybe 18K so I've lost 5K in depreciation alone to put 5,000mi on it.

In the coming years, as I keep the car, that depreciation will probably go from 4 to 3K /yr. and eventually more about condition than age (I don't think my '97, which only had 65,000mi on it, was worth less than a typical '98 or '99 I got $5,500 so the '05 came out 18K net)

You could factor into that insurance, warranty, taxes, and interest (if you financed, I just PAY for 'em )

There's No Question in my mind that you just can't get more car for the money than a low miles, off-lease, used Caddy!

Come to think of it,,,, I paid 21K for the '97 STS, drove it 8 yrs and it cost me only 16K in depreciation. 2K/yr not bad to drive That car!

[Texas Jim]

According to Kelly Blue Book...

My 2006 DTS is currently worth about 20K for trade in and about 23K on a private party sale.

I paid $42,500 for it...brand new, plus TT&L.

I did NOT have a trade in...my previous one burned in my garage fire.

If I remember right...Sticker was almost 54K.

Wrote 'em a check for $32,000 and financed about $12,000 for 18 months at -0- percent interest. (that number included the TT&L)

Got irritated at making payments, so after about six months, I paid it off.

I bought it just before Christmas in 2006, so I have had it for almost 3 years.

So...it has cost me about 20k for the 33 months I have owned it which equals $600 a month.

(Dadgum...I didn't realize it was costing me that much... )

Hopefully that number (the monthly cost) will decrease in the next year or two, before I sell it and buy a late model CPO.

The Depreciation curve should be sorta flattening out by now. I hope.

Then again...depending on how it holds up and what kind of expensive trouble I have with it, I may keep it longer than that.

It is under GMPP Major Guard till 104,000 miles.

Obviously the longer I keep it..without having to spend a lot on upkeep, will affect the monthly cost of ownership.

I kept my 1980 Sedan deVille for over 20 years and over 250,000 miles, with almost NO TROUBLE from it at all.

[JohnnyG]

These are all outstanding analysis of the cost of owning a car. In every case, buying a used car makes much more sense than buying new. I can only add that If you consider $600.00 per month bad Jim, Think about how much value you lost in the First Hour of ownership! The minute you drive a new car off the lot, say you were to trade it right back in, you'd lose 33% of its value!

This '08 is only the second new car I have ever purchased in my life, it will likely be my last as well. But I had to be able to satisfy one of my life goals of driving a new Caddy off the showroom floor. In the end, was the experience worth $10,000.00? YES!

But not from an economic viewpoint.

[Bruce Nunnally]

The only person who 'should' buy a new car is someone who is so rich that the loss in the first year of depreciation just doesn't matter. That's not true at my house.

It makes the acquisition cost -- finding a used Cadillac straight from an owner who is about to only get some percentage of the trade-in value from the dealer attractive. Hard to do, but attractive. An advantage of buying used from the Dealer of course is to availability and the certified pre-owned program, which provides the 6 yr 100K bumper to bumper warranty.

Also, the sales price for your current car can be raised by selling it yourself instead of trading it in, but that means dealing with people coming to look at the car, and uncertainty of when you will sell the car.

The confusing part for me is I still tend to think of previous car payments as what I paid for the car, and not the actual cost of ownership. Also I don't tend to escalate from say 1981 dollars to 2009 dollars, so that a $300/mo car payment back in 1981 would be $300/.425 = $706/mo adjusted for inflation to 2009 dollars.

[Texas Jim]

In the end, was the experience worth $10,000.00?

YES!

But not from an economic viewpoint.

I agree 100 percent.

With BOTH statements.

[Texas Jim]

The confusing part for me is I still tend to think of previous car payments as what I paid for the car, and not the actual cost of ownership.

Also I don't tend to escalate from say 1981 dollars to 2009 dollars, so that a $300/mo car payment back in 1981 would be $300/.425 = $706/mo adjusted for inflation to 2009 dollars.

Both of those statements are true for me also.

Especially the last one.

I still think the old way...300 "THEN" equals 300 "NOW"...and that is wrong...

But thats the way my brain, (What little I have) works.

[Bruce Nunnally]

These are all outstanding analysis of the cost of owning a car. In every case, buying a used car makes much more sense than buying new. I can only add that If you consider $600.00 per month bad Jim, Think about how much value you lost in the First Hour of ownership! The minute you drive a new car off the lot, say you were to trade it right back in, you'd lose 33% of its value!

This '08 is only the second new car I have ever purchased in my life, it will likely be my last as well. But I had to be able to satisfy one of my life goals of driving a new Caddy off the showroom floor. In the end, was the experience worth $10,000.00? YES!

But not from an economic viewpoint.

I bought both my CTS's new; I told the salesperson exactly what I wanted, he pulled one around to the front, and we settled the paperwork. I do appreciate that there are advantages to buying a brand new Cadillac. And it is fun.

But the difference in cost in the first year of ownership between a new Cadillac and a 1 year old Cadillac can be $500/month.

Likewise, driving my 4 year old CTS for another year (still under extended warranty) saves around $200/month over a year-old 2008 CTS. It would be more FUN to get the newer one now though.

Also, knowing that it will take longer to find the *right* Cadillac, I am starting to watch the various used car listings for the mix of features I want. Another part of my thinking is instead of buying a new CTS with only the performance options I want to buy a used CTS with the complete Performance Collection and DI engine. That pushes the sticker to around $48K new, so it makes it harder to find one for my $28K notional budget. I also have a strong opinion that the styling chrome touches on the new CTS require that the vehicle color contrast with the Chrome in order to have the same pop. So platinum, gold, and white are out. Here in Texas black is too hot, so that leaves the Crystal Red Tintcoat as the ideal color for my plan.

[Bruce Nunnally]

As one who's inclined to use a car up, I can tell you that the easiest way to get the expenses down is to buy a 5 year old car instead of a 1 or 2 year old one.

As my daily driver I don't want a car not under warranty. You are right it is less expensive to buy later, but I want that luxury of either be assured it will start and deliver me on time, or dropping it off at the dealer, grabbing a loaner Cadillac, and getting to my meeting on time. So my plans orbit within an extended warranty period.

You are correct however that in terms of cost you can drive cost of ownership much lower if you start with a 5 yo Cadillac

[dmk9561]

As one who's inclined to use a car up, I can tell you that the easiest way to get the expenses down is to buy a 5 year old car instead of a 1 or 2 year old one.

As my daily driver I don't want a car not under warranty. You are right it is less expensive to buy later, but I want that luxury of either be assured it will start and deliver me on time, or dropping it off at the dealer, grabbing a loaner Cadillac, and getting to my meeting on time. So my plans orbit within an extended warranty period.

You are correct however that in terms of cost you can drive cost of ownership much lower if you start with a 5 yo Cadillac

Yeah, and I did mention in a roundabout way that it would be cheaper to not drive a Cadillac at all. This is a numbers game that doesn't come out favorably to someone who buys new or near-new and sells in just a couple of years. There's certainly a sliding scale of worth/value here. Obviously, if someone makes quite a bit more money than I do, it is justifiably worth several hundred dollars a month to have/do things that I can't. It's what money is for, and it's a luxury as you said. The peace of mind of a warranty is a different luxury than heated leather seats or chrome alloys. After all, a new Kia has a great warranty.

Owing to the number of little old ladies that own some of them, I know that it's sometimes possible to buy an as-new 5-7 year old Cadillac for less than 25% of its original purchase price. My dad just bought one. It's an astonishingly luxurious car for a sub-$10k purchase. At its price, a head gasket or transmission job could be amortized into it's monthly cost and still be be cheaper in the long run than one just a little newer. That said, not having to find your own rental car or worry about paying for anything beyond deductibles is obviously worth something, and it is up to any buyer what it's worth to them.

Though Cadillacs' resale value falls quickly, it doesn't seem to me that they aren't "worth" their cost. Most Cadillac models could fairly be called the value choice in their market segment. It's not the purchase price of the car but the resale value that makes a Cadillac cost more to drive than a Lexus or BMW. The longer you keep the car, the less that matters.

[Bruce Nunnally]

Agree. I kind of saw the 'other' side of the equation with my 1996 STS. I purchased it with 75K miles still under an extended warranty. It had a whole litany of mechanical issues and visited the shop frequently, especially after the warranty expired, adding around $4,226 to the cost of ownership. Drove it around 4 years, paid $15.5K for it, add the $4K repairs, traded it for $3K, so net $16.5K cost. I drove the 96 from around Aug 2000 til Jan 2004, or ~41 months = $402/month. So even with a *high* repair cost, the older high mileage car comes out okay, except for the convenience.

Here are is base assumption: Yes, my next vehicle will be a Cadillac, and I would prefer it to be fully optioned with the best engine and performance features, navigation, sound, and sunroof. But given that assumption, I would prefer to keep my cost to a minimum lol.

[Texas Jim]

Warren Buffett drives Cadillacs for daily drivers.

I read somewhere, that he never buys new ones.

He buys one year old CPO...keeps it a couple of years..then gets ANOTHER CPO.

He said that is the best value, he is never out any repair cost and he don't take the first year depreciation hit.

[OynxSTS]

The only thing I can add is that it is not fair to ignore the cost of extending your warranty.

The warranty is exactly like an insurance policy against future repairs... if you count repairs you should count the warranty...

And for most cars the cost of repairs will not exceed the cost of the warranty.

[Texas Jim]

The only thing I can add is that it is not fair to ignore the cost of extending your warranty.

The warranty is exactly like an insurance policy against future repairs... if you count repairs you should count the warranty...

And for most cars the cost of repairs will not exceed the cost of the warranty.

Agreed.

I bought a three year/54,000 mile GMPP Major Guard warranty for mine.

That takes the warranty to Dec 24th 2011 or 104,000 miles...whichever comes first.

I think it was $2,300.

I paid cash for it, but to amortize it out for the 36 months...it would be $63.88 a month.

I have used it one time...so far.

The AC module in the drivers seat back went out and had to be replaced along with something else fairly minor. Need to find the work order and look at it.

I need to get the cost at the dealer if I had paid for it.

I am going to keep track of warranty claims to see if I ever come out ahead on how much I paid for the warranty vs paying for repairs out of pocket.

I had the extended warranty on my 2002.

It cost me $1,700.

Before I sold it, I had all 4 struts replaced, a front transmission seal replaced, torque converter replaced, both CV joints replaced (boots were bad) and a blower motor replaced.

I came out ok on that one.

[Bruce Nunnally]

I agree that the money paid for the extended warranty has to be amortized in the cost / month. In my case I paid $1400 for the extended warranty, and so it

added $29/mo across the current 48 or $23/mo across the planned 60 months of ownership.

Total: $32K purchase + $2K interest + 1.4K warranty - 10K retained value = $25,400 / 48 mo so far = $529/mo

Probably next year after 60 months, with another $2K depreciation, it will be: $27,400/60 mo = $456/mo

[Bruce Nunnally]

Baselines: this is the 'new' car prices right now for my target 'used' car for next year when my 05's extended warranty is complete:

2008 CTS DI Auto Crtstal Red Tintcoat w/Premium Collection MSRP $48,360; Cash back offer: $3,500

2009 CTS DI Auto Crystal Red Tintcoat w/Premium Collection MSRP $50,730; Cash back offer: $3,000

2008:

CTS Premium Collection, Includes: 18" All-season tire performance package, Luxury Level One Package, Luxury Level Two Package, Seating Package, Bose 5.1 Surround Sound system with pop-up navigation, UltraView sunroof, Wood Trim Packages. $8,215

Luxury Level One Package, Includes: Theft-deterrent alarm system, Bose 8-speaker audio system, Rainsense wipers, Interior ambient lighting, and 17" x 8" machined-faced wheels. Requires Seating Package. Included

Luxury Level Two Package, Includes: heated/ventilated front seats, split-folding rear seat, power rake wheel and telescopic steering column, EZ Key passive entry system (remote start included with automatic transmission ), ultrasonic rear parking assist. Requires Seating Package. Included

18" Summer tire Performance Package, Includes: 18" (45.7 cm) Summer Tire, HID headlamps, headlamp washers, fog lamps, 18" x 8" (45.7 cm x 20.3 cm) aluminum wheels with high-polished finish, P235/50ZR18 Y-rated summer only performance blackwall tires, performance handling suspension, limited slip differential, performance braking system and performance cooling system. Not available with 6-speed automatic transmission AWD or 18" All-Season Tire performance package. $2,430

Seating Package, Includes: leather seating surfaces, 10-way power driver and passenger seat (including power lumbar control), Memory Package, heated front seats and heated windshield washer fluid. Included

Wood Trim 1 Package, Real Sapele wood on the instrument panel, center console and door trim. Included

Wood Trim 2 Package, Real Sapele wood on the steering wheel and shift knob. Requires Wood Trim 1 Package. Included

[sonjaab]

Correction:

Mr. Buffet had a 01 Town car. He bought a new DTS in 06.

He auctioned off his Town car on Flea-bay and donated the money

to charity.

http://tsikot.yehey.com/cadillac-news-warr...r-charity-3.htm

[sonjaab]

In 07 instead of buying a $54k msrp for a 07 DTS (about $44k using the GM

employee purchase deal along with rebates) I chose to get a Caddy thru the

GM employee PEP program. PEP cars are used by GM big wigs and division

heads and or for evaluation purposes.

They are sold with anywhere with 1 to 9000 miles and are current year models.

I got a 07 DTS loaded with every option and a $56k sticker for $29k.

It had 2,900 miles and was delivered thru Lloyd Cadillac in Daytona.

They took my 03 DTS in trade (53k miles) for a measly $15k. But the

local Caddy dealer in Syracuse only offered $13k trade on a new DTS

on a GM employee GMS deal.

I guess this time I stayed ahead of depreciation on this one!

[Bruce Nunnally]

I got a 07 DTS loaded with every option and a $56k sticker for $29k.

It had 2,900 miles and was delivered thru Lloyd Cadillac in Daytona.

They took my 03 DTS in trade (53k miles) for a measly $15k. But the

local Caddy dealer in Syracuse only offered $13k trade on a new DTS

on a GM employee GMS deal.

I guess this time I stayed ahead of depreciation on this one!

yes, that sounds like the kind of deal I need.

[MAC]

So how much does your car cost you? No, not what you paid for it, or how you paid for it -- how much did it COST?

In my case for example -- I paid $32K as I recall for the 2005 CTS new, and it is worth 9-11K today. So in other words 4 years, 61K miles cost me around $22K, or about $458/month.

This is the main reason why buying used is a good option, especially if one is mechanically inclined and can handle repairs. I bought my '05 STS for under 10K fully loaded, including a moon roof. The interior is in good shape. It has high mileage (154K at the moment) but there is no sign of an impending major problem and I don't anticipate one. I'll put at least another 100,000 miles on it and then consider my next move. By then, a used 2010 STS will be very affordable.