Originally Posted by Woggy64
My Mustang held a decent value after five years. Paid about $25k, got about $12k for it. Unlike my neighbors 330Ci BWM - paid about $65k, and book on it is about $20k. I like to point out I "lost" $12k to drive a Convertible Mustang in Southern California for 5 years, he "lost" $40k to drive that BMW.
Cars never make smart investments - buy what you want to drive.
For me the most useful way to think about car finance wise is cost per year. With a new car, under warranty, you tend to be able to predict that. So if you are paying 4k/year in payments, have 1k in insurance and spend 1k on gas, you're gonna be around 6k per year.
Add in some depreciation and you have it. Most estimates are that a car costs between 5-10k per year. A higher end car costs more and a lower end one costs less. A car like the honda Fit can be sold a few years after you buy it with a really remarkable lack of depreciation. So my GF has one of those and it is probably the most economical car you can get by a pretty hefty margin.
The focus is in the middle somewhere. It isn't that expensive, but resale will be low. Maintenance will likely be low. It will probably average like 6.5-8k per year. A 3 series or 5 series will be a lot more.
By far the most economical way to go is to buy a 7-8 year old honda or toyota and drive it into the ground. UP front cost is low, depreciation can't be much because the car is already cheap and hopefully operating costs are low. Just end up spending a lot of time with the car being fixed.