Gas prices and resale

[greycrx87]

@ $5 our economy completely stalls as consumers retreat
@ $6 our economy collapses taking OIL prices down along with it

PLAIN AND SIMPLE

[Titanium Silver]

Many people who buy M3s don't give a sh!t about gas prices. Well, at least it won't deter them from buying one.

In other words, it's not a deal breaker.

Although an entirely different conversation, I doubt we will be seeing $6-8 per gallon of gas anytime soon.

[swartzentruber]

Originally Posted by mkiv808

Agree. If you can finance a car at a low interest rate (<5%) and can make investments with your money that yield more per year (>5%), well golly, you're ahead.

Yes, and if there were such a thing as arbitrage (in reality, not textbooks), we could all be rich all be rich.

Hint: Familiar with risk adjusted return? Notice these are not equivalent risks?

[swartzentruber]

Originally Posted by Titanium Silver

Although an entirely different conversation, I doubt we will be seeing $6-8 per gallon of gas anytime soon.

Agreed. It might be possible in the short term. However, there are lots of viable ways to produce gasoline, and each way has a price where it becomes profitable (i.e $50/barrel, $100/barrel, $200/barrel). Gas much above the $100/barrel price faces a lot of headwinds, as it seems that at each higher price point, there are viable new options for producing gasoline. From that standpoint, ottoblotto's "reaction" is the correct one.

A great example is extracting gas from the Canadian oil tar sands. From what I understand, there are deposits there equivalent to more oil than what the middle east in its entirety has, but it's costly to extract. Once oil "sat" at $100/barrel for a while, it became viable to extract, and that method is now producing a good bit of oil, albiet very heavy.

[Rekrul]

Originally Posted by epiphone3

Re-sale would take a hit in my opinion just like resale on gas guzzling SUV's took a hit a few years ago when gasoline prices ran up and oil prices ran to $147/bbl.

Since your asking the question about fuel economy/fuel cost and the question does get asked reasonably often on these boards, I would say that at least a significant percentage (say 40%) of the population interested in buying an M3 considers fuel milage. Therefore, chances are a spike in fuel costs would lead to a reduce size of the used market for the M3 in the future.

My advice is as follows: don't ignore what is important to you. If you like the M3 but are concerned about future fuel costs, hedge yourself against rising fuel costs with a portfolio of oil investments and other inflation protected/tracking assets and then just go and have fun with the M3.

This

[epiphone3]

Originally Posted by Nine

I love it, you guys are CRAZY. "Hedge yourself against rising fuel costs", "portfolio" "tracking assets"


This thread is filled with flawed concepts and premises.

It's like the blind leading the blind.

Okay. If my concepts are so poor and its the blind leading the blind, why don't you enlighten us with your smarts?

By the way, if you can make returns and rising capital value from something that is correlated well with oil/fuel costs, I see it is a pretty good way to not lose your shirt in an environment where fuel/oil costs are rising. There isn't a thing wrong with that logic.

[Nine]

Originally Posted by epiphone3

Okay. If my concepts are so poor and its the blind leading the blind, why don't you enlighten us with your smarts?

By the way, if you can make returns and rising capital value from something that is correlated well with oil/fuel costs, I see it is a pretty good way to not lose your shirt in an environment where fuel/oil costs are rising. There isn't a thing wrong with that logic.

We are talking about a 70k piece of equipment, and gas as an expense. You might as well start hedging against your $7 dollar starbucks habit, or your expensive beer or your shoe brands. The concept of hedging should be applied against larger investments, a car's depreciation is a part of the equation and if feared, begs the question of affordability..

The premise is, should the economy tank, how will that impact my resale value??

Well, ummm, ....your first worry should be all of the true investments that will be impacted by the doubling of pump prices, your house, price of goods, etc. If you are worried about your car, be conservative, sell and own something cheaper.

What is the risk factor, are we talking about 1-5% loss, is the OP upside down on his cars and can't afford to lose money?? My whole point about growing balls is, either you can afford the car or you can't. Worrying about whether your car sells for 38k or 42k...is a sign, as stated before.

Next point, comparing an SUV to an M3, SUVs were getting anywhere between 10-15mpg, and the market was flooded with overpriced, heavy, GM, junk. The M3 on the other hand has a niche market, actually, it could be argued that in a few years, there might be a strong demand for a NA V8. The market is not flat, nor is demand, and with rising luxury prices, an expensive F30 M3/M4 can push the e9x price higher as the CPO/Used market will grow.


I really thought we ran these numbers a long time ago when the prius was launched and everybody was selling their cars to buy a prius, everyone took the depreciation hit TWICE, while not saving a significant amount on gas...and it became common knowledge that only after 2-3 years would you actually see significant savings.

[ES_TRADER]

2010 M5s with exceptionally low mileage can be had for under 40k...what's that tell u? V10 + high gas prices = no demand...theres a ton on autotrader everywhere

[US///M3]

The folding hard top will affect the resale value of your M3 more than gas prices.

[Nine]

Originally Posted by richpuer

2010 M5s with exceptionally low mileage can be had for under 40k...what's that tell u? V10 + high gas prices = no demand...theres a ton on autotrader everywhere

Your post is absolute bullshit. 2010 M5s are going for 61-69k on Autotrader.

http://www.autotrader.com/fyc/search...=1329335532209

[crabman]

I don't think you can compare the potential resale of an M3 to gas guzzling SUVs. People who buy these cars (for the most part) are purchasing performance and likely to be aware they will pay for it at the pump. A whole lot of people who bought SUVs on the other hand did so because there was no real reason not to, they are handy vehicles for the day to day grind and with cheap gas there is little downside. My own wife was one of these but when gas prices soared she didn't like the cost of filling up. All of a sudden the thing had a downside and didn't seem worth it even though she can afford the gas. Going back to the beginning compare this to an M3 where my guess is there are few buyers who went "Meh, I didn't buy this for any particular reason or need but gas is cheap so who cares?"

[jcaptain]

I know I am not adding anything of value to this thread with this comment, but I must mention that it has evolved into a very interesting thread. I love hearing everyone's opinions and theories on economics and investment strategies, as well as worldwide political matters.

I have no idea if the OP intended for this thread to go the direction it has gone, but I, for one, am going to continue reading (again, I am adding no value to this topic).

[TVMA Doc]

Originally Posted by 808MGuy

People who put MPG high on their priority list don't shop high performance vehicles so I would say no.

Besides, you can get crap mileage on a Camry just as easy as you can on an M3 just by driving like an a$$hole.

http://www.flixxy.com/supercar-fuel-economy.htm

[///My5UV]

Gas would have to cost over $10/gal before I cared. Even then, I wouldn't get rid of the M3, I'd just possibly take a different car on long trips.

The only reason I ever paid any attention to the fuel mileage on this car is that it has a tiny gas tank.

[mkiv808]

http://www.streetfire.net/video/143-...uel_180378.htm

[ES_TRADER]

Originally Posted by Nine

Your post is absolute bullshit. 2010 M5s are going for 61-69k on Autotrader.

http://www.autotrader.com/fyc/search...=1329335532209

sorry, i meant 08-09..1 MY not a big deal.same car still..still low miles, 40ish i saw one for under a few weeks ago...gone now

http://www.autotrader.com/fyc/search...=1329502485850

[esqu1re]

Yes. It'll scare off the people who are looking to buy a used m3 at around $35k-$40k in the next year who can barely afford the car payments. They'll move to something less thirsty (mustang or 335 or something). Therefore, demand will drop a little, and gas thirsty cars will depreciate. It should bounce back up if gas prices drop.

But, you also realize the M3, like most cars, will never appreciate (maybe MAAAAYBE in 20 or 30 years) in monetary value.