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Thread: Does it really make financial sense to own two cars?

  1. #1
    Ron Jeremy's evil twin AlexL's Avatar
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    Does it really make financial sense to own two cars?

    I think it does, but maybe that's just Evil Alex trying to convince Good Alex that he needs more cars.

    So let's say Alex wants to compliment his M3 with an E36 318i. How much more would it really cost me?

    Insurance:
    Here's the big surprise that lead to this investigation. If I were to insure the 318 as my primary vehicle with liability insurance only and make the M3 a secondary vehicle with the same coverage I have right now, I would actually save $300 per year on insurance. Storing the M3 in the winter and reducing the coverage on it over that time frame would further reduce my insurance cost.

    Fuel Cost:
    I typically get about 22 MPG driving the M3 on a daily basis, and probably do about 15,000 miles per year of driving that doesn't require an M3. Between better fuel economy and cheaper gas (89 octane compared to 92+), I should be able to save at least another $500-700 per year on fuel.

    Maintenance:
    Hard to put exact numbers on anything, but I'll essentially be trading wear and tear on one car for wear and tear on another. The engine in the 318 is said to be more reliable and with 2/3 the cylinders, it should be cheaper to keep up. Keeping the road miles off my $$$$ DA shocks is always a smart move, and a lot of the other wear items on the M3 are more expensive or less durable aftermarket pieces compared to what would be on the 318. It's hard to put a dollar amount on this, but I think it's safe to say that there would be some savings here.

    Depreciation:
    An inexpensive, higher mileage 318i isn't going to see as much depreciation from year-round daily driving as a low mileage rust-free M3. I wouldn't be surprised if the cost of buying a 318 minus what I would get back from selling it after a few years to be less than what it would cost me in depreciation alone to daily drive the M3.

    Registration cost:
    Yes, it will cost more to keep two cars licensed instead of a single car, but not that much as both cars would be relatively old.

    Storage:
    The one that could make or break it. Keeping two cars accessible all summer may or may not be workable for me. It's the biggest question mark. Winter storage is easier because I don't have to have both cars accessible to me, and it could cost around $500 if I need it.

    Bottom line:
    If I hold onto both cars for at least another 3 years, I think I would at least break even owning a second car.

    I used to think that owning two cars could never be the financially sensible thing to do, but it appears that may not be the case. Of course the really sensible thing for me to do would be to get rid of the M3 entirely and run a 318i in HS, but what fun would that be?
    Last edited by AlexL; 07-24-2007 at 04:50 PM.

  2. #2
    A couple of thoughts.

    Rust on the M3 will cause great depreciation right now or a very expensive repair. Avoiding rust alone would justify the extra car IMO.

    What would be the loss of day-to-day driving pleasure when you substitute the 318? What is this worth to you? It sounds like the insurance savings from the decoy car justifies its year around availability (rather than winter only). Still there may be cheaper acceptable options if you used it mainly in the winter since the M3 could still be used in summer.
    Jay McKoskey
    1991 Miata #63/163

  3. #3
    Why a 318i?
    Autocrossing is the process of changing money into noise.


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  4. #4
    0100111001101111
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    I've always found a way to justify owning multiple vehicles. Do you own a house? You can get a multi-line discount (for homeowners ins) on top of a multi-vehicle discount. I usually have a utility vehicle like a truck or van as the spare. Not having to rent or borrow one for projects helps defer the cost.

  5. #5
    Insurance:
    Here's the big surprise that lead to this investigation. If I were to insure the 318 as my primary vehicle with liability insurance only and make the M3 a secondary vehicle with the same coverage I have right now, I would actually save $300 per year on insurance. Storing the M3 in the winter and reducing the coverage on it over that time frame would further reduce my insurance cost.
    -Are you in a position to absorb the cost of repairs out of pocket should someone hit you - especially while parked somewhere other than your own driveway (apt parking lot counts as 'somewhere other')? Are you willing to accept the risk should something happen to the car, such as fire damage, or theft from the vehicle, while stored?
    -Check very carefully about the cost savings during the winter when the M3 is stored. MN requires you to maintain liability insurance on a vehicle that is registered in the state. The state also gets notified when you drop the insurance on a vehicle. You may also lose the "multi-car discount" if you drop the insurance down.
    -Look into "collector/collectable insurance". This might be a smart move if you don't drive the M3 much. These have annual mileage limits, and are relatively inexpensive.
    -On the bright side, your savings for multi-car might be greater since the chances of having both cars on the road at the same time are nearly nil.
    Rex Schultrich
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  6. #6
    This is exactly why I have more than 1 car. The (almost ) completely stock Focus daily driver was cheap, heaper to insure since I don't have collision on it, and gets much better gas mileage than the boosted Focus.

    On the other hand the car that is still streetable that I have owned the longest is a complete waste of money. I never drive it, it just sits in a shed collecting pigeon ****.



    So in gernal, 2 cars = good, 3 or more cars = bad (unless you are an old **** that is better off than someone young like me).


    Then you have car number 4 that was totalled by the girlfriend, which is an even worse investment (never let your girlfriend daily drive a car that you own).





    And with me I have the benefit of having a spare car for whenever either one breaks down.
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  7. #7
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    Quote Originally Posted by SaturnRaycer View Post
    -Are you in a position to absorb the cost of repairs out of pocket should someone hit you - especially while parked somewhere other than your own driveway (apt parking lot counts as 'somewhere other')? Are you willing to accept the risk should something happen to the car, such as fire damage, or theft from the vehicle, while stored?
    -Check very carefully about the cost savings during the winter when the M3 is stored. MN requires you to maintain liability insurance on a vehicle that is registered in the state. The state also gets notified when you drop the insurance on a vehicle. You may also lose the "multi-car discount" if you drop the insurance down.
    -Look into "collector/collectable insurance". This might be a smart move if you don't drive the M3 much. These have annual mileage limits, and are relatively inexpensive.
    -On the bright side, your savings for multi-car might be greater since the chances of having both cars on the road at the same time are nearly nil.
    Pretty sure comprehensive (for fire, water, theft, etc ) is all that's required to insure a stored car... and I've always kept the multi-car discount while doing so. When I needed to move or use the car, I'd just call the ins. company and let them know.

  8. #8
    Anything more than one car is a waste!

    So Alex, go get wasted!!!


    And on another note, off season - comprehensive will cover as Ivan stated, I do that on all my off-season cars.
    Last edited by weidnerpaul; 07-24-2007 at 05:45 PM.


    Oh, I always wondered. Doesn't placing the racing stripes asymmetrically lead to one side of the car going faster than the other? - MacDubois


  9. #9
    I dont care if it makes sense, I own 3 But, we have our two cars, and when I bought mine, my old car was nearly 10 years old and has over 160,000 miles on it, so I would get next to nothing for it and it is paid off... so it makes perfect sense to keep it IMO.

    But, I am a firm believer that you have to mix practicality with just doing what you want in life. Cars are one of my fun things... if I could afford 30 I would probably wish I had more than that

    As far as depreciation, cars are the worst investment out there, so while some have better resale than others, they all suck for return. I personally would rather pay one off that is a good car and keep it 5 more years before even thinking of buying a new car. 5 years of investing what would be car payments is worth well more than trading off every few years and always having to pay for a car. Not to mention the security of at least knowing it wont be re-possessed if something bad happens in your life.

    But again I say... worth it? If you like them then yes
    2001 S2000


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  10. #10
    Overdrive Darryl's Avatar
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    I do and think you should too... I'll kill you if I see that M3 this winter, unless it's parked in Henderson...


    No house for Alex yet, looks like that'll come in the next year or so...
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