A reader recently wrote to express his concerns with owning a BMW that was about to exit warranty. He confided that while it is a nice car, perhaps it was more car than he should have bought. And I hear this a lot from BMW owners, although not as honestly.
Many folks buy these technologically complex cars (and Mercedes, Audis, Porches, Cadillacs, whatever) on the basis they can "afford the payments" and that they deserve a status car, as they are doing well in life.
But of course, with the race only half-won, it is a little premature to start breaking out the champagne. But that doesn't stop most of us. And it is only five years later, when the last car payment is made, that the owner realizes that (a) they paid $60,000 for a car, and (b) it is worth maybe $30,000 at this point, if that, and (c) it is out of warranty, and every trip to the dealer for repair results in a bill with a comma in it.
They realize, consciously or unconsciously, that they could have bought a simpler and cheaper $30,000 car, and had $30,000 more in their retirement account. And being five years closer to retirement, they suddenly realize they would have preferred that.
And since these cars are complex, they are hard to service yourself, and even finding independent mechanics to work on the electrical bits, is hard to do. And the dealer wants a ton of money for any repair. Extended warranties are one option, but they are very expensive and often don't cover much. Anything other than a factory extended warranty, in my opinion, is worthless - those con artists just go bankrupt and you warranty is void.
So the purchaser is left with a lot of anxiety and a conundrum. Does he trade in the car, thus spending more money in transaction costs and signing up for five more years of payments, or does he keep driving it and hope it doesn't break? Does he buy an extended warranty and spend more money that way?
And what ends up happening, and I see this all the time, is that these expensive toys do break and the owner takes them to the dealer and gets a huge bill, and suddenly his "dream car" is a nightmare. And legions of these folks go on discussion boards and say was pieces of crap these cars are and how we should all sue the manufacturer because they broke out of warranty and they had to pay to fix it.
What they are really saying is what my reader was honest enough to say, "Maybe I bought more car than I needed or could really afford."
But again, no one wants do admit to that - it is easier to externalize your problems and blame others, in this case, the car manufacturer.
Of course, cars like this do soldier on and are sold to people like me, who have the tools and inclination to repair them on the cheap. And this is how I owed four BMWs at one time, by doing all the repairs myself. It was fun, but it was also a lot of work.
And today, I am not sure I would want to buy another one. While I was able to remove the malfunctioning navigation system from my X5 and replace it with an aftermarket unit (and actually make money on the deal) today, this would be very hard to do. Integrated controller systems like BMW's idrive tie in the HVAC controls, lighting controls, and radio and navigation controls, into one central control panel and monitor. Removing such a system and installing an aftermarket one is just not an option - or not an easy option, anyway.
And of course, this is not by accident. Since the 1990's car makers have been trying to integrate radios and other components into a car so as to make it hard to go aftermarket. In the 1980's, no one bought a "factory radio" with their car, if they had any common sense. You would get the stock AM radio or go with a "radio delete" option and then take the car to the stereo store and have a real radio put in.
Why? Because factory radios were overpriced crap. That's why.
Today, they are far better than in those days. Harmon-Kardon Amplifiers, Bose sound systems, you-name-it. But they are built into the car and often difficult to modify or change.
And this is a problem, as the design life of electronics is about 1-2 years before they are obsolete, whereas a car can last a decade or more - or should.
So you end up in a situation like I was in, with a 10-year-old car, with a busted and outdated navigation system. The car is good for 100,000 more miles, but the electronics are just a joke (I mean, a cassette deck? What was BMW thinking?). Fortunately, I was able to retrofit a more modern navigation system with bluetooth and a DVD player and all that crap. But that was one of the last cars BMW made without idrive.
Today, more and more cars are coming from the factory with built-in nav systems, and even a Pandora interface. To use most of this stuff, you have to pay extra for a monthly service, unless it can interface with your smart phone. But sure as the sun rises, in five years, whatever is in your dashboard will not interface with the iPhone 20, and when this stuff breaks, well, replacing it will be nightmarishly expensive (the display in my X5 retailed for $3000 at the dealer. And that is only one of five components that make up the audio/nav system!).
So what choice does the consumer have? Well, one option is to not buy more technology than you need or can afford. All that built-in consumer electronic crap is fine and all, but it does make your car a candidate for premature obsolesce. Finding a simpler car with fewer electronic frills on it might be a better idea.
And this is not a new trend, either. When I was a kid, Cadilliacs were real pieces of shit. They came from the factory with all the electronic toys - power windows, locks, seats, antenna, and silly stuff like "twilight sentinel" and the "autronic eye". They even had a little thermometer mounted on the rear view mirror, so you could look outside and see what the temperature was. And they came with a primitive "climate control" systems, with a knob to adjust temperature.
Within five years, most of this crap was broken. Your typical used Caddy would have one busted power door lock, an antenna that was up all the time (or stuck down) and the little thermometer was stuck on 50 degrees. Repairing any of it was a nightmare, and the resale value of the cars were so low than few bothered to do so. And as the vinyl roof started to peel off, well, it looked like holy hell in short order. So much for the "Standard of the World".
But a basic Chevy, with manual windows and doors would soldier on far longer. Without all that plastic trim to fall off, the car looked better, longer. And the simpler construction meant it was easier to service and repair. For long-term ownership, a simple vehicle is a better proposition.
And this is true today as well. I read a recent article in the Roundel, the magazine of the BMW Car Club of America. A man wrote in about his aging 7-series, 740iL, which was the top of the line car back in the day. It was starting to have more and more mechanical problems, and the cost of parts and labor was very dear. The author of the column wrote back that in his experience, what happens to such cars is that the mechanic buys them, puts his tool box in the trunk, and drives them home. He is the only one who can really contend with all those aging and failing systems, in any sort of economical manner.
And that is how I have been able to own these older, complex cars. It is not something I would suggest for others, of course. A good used Camry is a better choice for most folks. And as I get older and less inclined to disassemble navigation systems, power seat motors, suspension components, and al;l that crap, I think a very simple car is in store for me as well.
Technology sings its siren song to consumers - promising them enriching experiences and of course, status, if only they upgrade to the next level, or buy the latest thing. However, technology isn't an end in and of itself, and it can be a trap - a financial trap - for the unwary.
The secret to getting ahead isn't spending up to your level of income, but rather living below your level of income, and banking the difference.