Hypothetical Value Question - Dodge Challenger Forum: Challenger & SRT8 Forums
SRT Hellcat 6.2L Supercharged (2015 - ) Would you like the BLACK KEY or the RED KEY?

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post #1 of 47 (permalink) Old 02-06-2019, 07:43 PM Thread Starter
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Hypothetical Value Question

All,

I'm pondering whether to buy a 2019 Scat Pack Wide Body or 2019 Hellcat Redeye Wide Body, whichever one it will be factory ordered in about a month. Haven't owned a muscle car since high school when I had a pretty low powered, but still pretty throaty with glass packs 65 Mustang with the 260 V-8 (built in 64 before they upped the displacement to 289). Had a lot of fun in auto shop playing with that car. Been driving family trucksters and Subarus ever since, but now ready to take the plunge into modern MOPAR heaven.

I'm wondering if experienced muscle car owners, or people with some financial savvy, might care to comment on this hypothetical question.

If someone could pay cash for a $56,000 Challenger Scat Pack, or $86,000 Hellcat Redeye, the difference would be parking $30,000 in the Hellcat Red Eye versus a bank, or other kind of investment. Banks are paying nothing in interest right now and 30k might earn $150 in interest annually, stocks carry risk, and it's not enough money to buy rental property. The flip side of low interest rates is these cars might be bought with an acceptably low rate and possibly people could afford the monthly payments, in which case the following math still pretty much works. So if this enthusiast kept either car for 10 years and averaged 5,000 miles/year, in 10 years the car would have 50,000 miles. Assume both cars would look awesome and be in great condition, etc - a loved car. I'm just guessing that the depreciation might be 40% for such a nice Scat Pack, and because of its relative rarity/desirability that the Red Eye similarly equipped might not depreciate as much. Uhh, let me reach around here...say 26%. It might not even lose that much value, especially if inflation kicks off and future cars cost a lot more - or the government or the economy or the larger car market causes these big block, high HP cars to stop being made en masse and they become even more prized collector items like our older muscle cars. If it was 40% for the the Scat Pack it would lose $22,400 in value and be worth $33,600. If it was 26% for the Red Eye it would lose $22,360 and be worth $63,640. They'd both lose the same dollar value, and so the yearly average cost of owning each car for 10 years is the same - $2,240. There is a higher insurance cost to the Red Eye - I'm hearing about double the Scat Pack's $760/year - but let's just talk about parking the money in these cars, and assuming a low lost opportunity cost of doing something else with the $30,000. My point is, especially if paying cash, that there is relatively little financial risk to buying the Red Eye. If the cost of ownership would likely be the same, why not buy the apex predator among 2019 Challengers and enjoy owning it? Of course, paying cash is impossible for many people, but I'm lucky enough to have saved up from all those family trucksters and inexpensive Subarus to do it.

Of course I could be wrong! A Red Eye's future value might do something unforeseen by my "never owned an expensive car" eyes. It's a question of relative depreciation.

If this appeals as a topic of discussion please throw in your two cents worth. Joining this forum and hearing the thoughts of more experienced owners and drivers who have bought and sold these kinds of cars before can give me perspective.

Thanks!

Finface
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post #2 of 47 (permalink) Old 02-06-2019, 07:59 PM
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Sounds like a seat of your pants decision! and I don't mean your wallet! My T/A 5.7 kind of leaves me wanting a wide body scat in plum crazy that is until I look at mine, get in and go!!! I think most everybody on here is happy with their Challenger decision


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post #3 of 47 (permalink) Old 02-06-2019, 08:40 PM
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I payed cash for my wide body scat ($49605) and it was the best investment I have made in years!!!!!

I have scrimped and saved and worked my ass off and I finally said WTF!!! It's my Time!!

I'm 58 and have raised my kids, Helped them through college and to get into nice houses (youngest is still going to need remodel help) but at some point you have to look at your expendable income and figure out what would be a good thing to do for yourself.

Just my opinion but I have had so much fun with this car and I haven't even had it thru track season yet!
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Last edited by Decay; 02-06-2019 at 08:56 PM.
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post #4 of 47 (permalink) Old 02-06-2019, 10:35 PM
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I would not buy the car with any kind of expectation that it would refain 40% of it’s value 10 years from now. 10 years from now gas might be $15 a gallon, the economy in the dumps, etc.

Get the car because it is the car you want

2012 SRT automatic, PB 12.0490 with MT drag radials and trinity 93 octane tune.

Labor Day 2018, maguson supercharger 5.5psi, forged piston/rods, Hellcat injectors, 10/1 compression, tuned for 90 octane. [email protected] with lots of room for improvement.
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post #5 of 47 (permalink) Old 02-06-2019, 11:30 PM
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When I acquired my Scat Pack last April, I decided to pay cash for it instead of using a low interest loan that my CU was offering. I saved $3k in interest over the required 72 months for the loan. I decided to make monthly payments to myself so now I am replacing the funds by depositing $$ into the account that I used to pay for my Challenger.

I will be 76 next month so it is now or never and I have enjoyed every minute behind the wheel of my Scat Pack even though I only drive it on the weekends. As far as resale 10 years down the road, I wouldn't count on it retaining that much value. Maybe after 25 years it will start to appreciate. I collect cars for the enjoyment of owning and driving them & trying to rationalize that they are an investment may be a stretch. They are only worth what someone is willing to pay for it when you are ready to sell.
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post #6 of 47 (permalink) Old 02-07-2019, 12:07 AM
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Originally Posted by Decay View Post
I payed cash for my wide body scat ($49605) and it was the best investment I have made in years!!!!!

I have scrimped and saved and worked my ass off and I finally said WTF!!! It's my Time!!

I'm 58 and have raised my kids, Helped them through college and to get into nice houses (youngest is still going to need remodel help) but at some point you have to look at your expendable income and figure out what would be a good thing to do for yourself.

Just my opinion but I have had so much fun with this car and I haven't even had it thru track season yet!
YOU GO GUY!!!!!!! That's what I'm talkin bout
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post #7 of 47 (permalink) Old 02-07-2019, 04:35 AM
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Besides the depreciation/appreciation issue, do you plan to race the Redeye? If not, its 797 hp. is major overkill for the street. You will be very happy with the 392 Scatpack. Its 485 horses (and mid 12-seconds quarter mile time) is more than enough power to get you into trouble. In addition, you will save over $30,000.


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post #8 of 47 (permalink) Old 02-07-2019, 04:50 AM Thread Starter
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Thanks for the comments and observations so far!

I'm 62, and like Decay my kids are grown and on their own and I've checked the financial boxes needed to stop working in a few years. Decay, your wide body Scat looks great.

I agree it's a stretch to count on any car holding much value, but I thought this "thought experiment" about the "carrying cost" of the more expensive car not working out to be as bad as one might initially think was worth seeking some advice about. Not planning on racing the car, but maybe, somehow, I'll find a way to take it on a closed track and get some instruction in driving for myself and my wife. There are no tracks within a three hour drive from me however - closest is Putnam Park in Indiana.

Hope more owners will chime in.

Best,

Finface
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post #9 of 47 (permalink) Old 02-07-2019, 10:03 AM
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All of what you offer is purely hypothetical and probably won't happen.

The biggest expense to owning a car is depreciation.


Really you are better off assuming whatever car you buy will depreciate at about 10% a year this from the dealer's cost, too, not the MSRP for some years after you buy the car. This depreciation curve is more real world. If the car doesn't depreciate this much you get to enjoy the result of being too pessimistic.


You dismiss putting the difference between the Scat Pack vs. the Red Eye into stocks because stocks "carry risk" but overlook the fact either car you buy will depreciate a great deal over a span of time that could see the stocks - in a low cost mutual fund -- increase in value on average 6 to 7%.

Back in 2016 the 2 stock trading days after the Brexit vote I put a total of $75K into a mutual fund that tracks the S&P 500 index and that $75K is up. How much? Well, the S&P 500 index was down to 2037 6/22/2016. It is currently at 2716. That is about a 33% increase. Thus that $75K is now up to $100K.

Cars are almost always a lousy investment. (The only "vehicle" I came near breaking even with was my 1974 Harley Sportster. I bought it new for $2600. A year later with around 6K miles on it I sold it for $2600. Had I had a crystal ball back then I would have taken that $2600 and bought H-D stock. On 7/11/1986 the stock was at $0.43 (price adjusted for stock splits). It reached a high of $73.74 on 11/17/2006. That $2600 would have bought 6000 shares that would have been worth around $445K had the shares been sold at the peak.)



My approach to buying a car is to figure out what I want, what price I'm looking at paying for the car, setting some upper limit -- and below MSRP -- of what I'd be willing to pay for the car.

After I buy the car I give it good servicing. This includes early vital fluid servicing.

Then I just use/enjoy the car. This doesn't involve thrashing the heck out of the car but it does involve using the car in sometimes spirited fashion, if you know what I mean. My usual mind set is when I buy a car I do so with the idea of keeping it forever so I avoid subjecting the car to severe/abusive usage.


This also means I don't track the car nor do I modify the car.


I continue to give the car good servicing, at least on the factory schedule and often times at a more aggressive schedule.

When things go wrong I have these addressed pronto. I keep records so if I decide to sell the car I can show it was "loved".

I keep the car clean inside and out. There is no food or drink or pets or smoking allowed in the car.

Still depreciation is steep. Couple of examples: Paid around $16K for a new 2002 VW Golf TDi. In 2007 sold it with 150K miles for a bit over $9K. Don't recall what I paid for my 2006 GTO I bought new in 2007 but it was less than sticker, which was around $32K IIRC. In early 2009 with the GTO having just under 50K miles and in very very good shape traded it in for a new 2008 Cayman S and receiving $15,500 trade in allowance. (The Cayman S was marked down $12K from $62.6K to $50.6K.)

Things can go wrong, though. I bought the Cayman S with the idea I'd drive it a couple of years -- and avoid putting big miles on the car during that time -- then trade it in for maybe a Porsche Turbo. Four weeks after I bought the Cayman S it was totaled when hit by another car. After the dust settled and I had the money in hand from the other driver's insurance all the good deals on Caymans were gone. (Given the discounts being offered no wonder.)

However, I found and bought a pristine 2003 996 Porsche Turbo with under 10K miles with a 2 year, 100K mile CPO warranty. Might mention that I paid less than 1/2 the car's MSRP of $120K, this for a 6 year old car with an average of just 1666 miles per year on it. Depreciation is a *****.



My plan was to drive the Turbo a couple of years and then trade it in for a newer model car. (All this time I had a 2002 Boxster which I would use for my work commute and errands and such.)

But not even 2 weeks later out near Ely NV hit a mule deer with the Turbo. Got it repaired -- $25K worth -- but its resale value/trade in value tanked. So I just kept it and drove it until finally I tired of it (and the Boxster which had 317K miles) and sold both in late 2017 after I bought a 2018 Scat Pack and a 2018 Mini JCW.

(Two months after I bought the Scat Pack I traded it in for a 2018 Hellcat.)

My advice in these situations is you can buy anything you want but the purchase shouldn't hurt. That is you don't want a nice car in the garage that keeps you awake at night worrying about how you are going to pay for it or worrying about what you are going to have go without to afford the car.

You should have a good retirement savings plan going. You should be debt free, although a mortgage is acceptable, provided the interest rate is reasonable. If you have kids, they should have college savings plans funded. If you have a family you should have good term life insurance just in case. You need a good fraction of your annual income in cash for just in case. (There was a thread a while back about a Hellcat owner who was facing having to sell his car due to the lack of a paycheck arising from the government "shutdown". You don't want to be in that position.)

As an aside, I can tell you from experience that going from bringing home a very good salary to "living" on unemployment is no fun. Back in Sept 2014 I was laid off. I went from a high tech salary to unemployment which was $1800/month. This didn't quite cover my rent, utilities. It did not cover at all the $1300 or so COBRA payment I had to make every month. (Once before when I was laid off I bought a major medical insurance policy with a high ($7K or so) deductible. I don't recall the premium now but it was quite affordable. If I got the flu and had to see a doc I'd have to pay for this out of my pocket. No biggie. But if I broke a leg and had to be hospitalized after the deductible insurance would cover the rest. But the "Affordable" Care Act, aka Obama Care, eliminated that kind of insurance.)

Fortunately I had a good cash reserve and used this. It gave me the ability to be a bit choosy regarding job offers. As it turns out my ex-employer hired me back after 6 months and 3 days -- but hey, who's counting -- at the same salary, benefits, even the same office and phone extension. I did get a new office PC.

In short you need to have all your financial bases covered. Until I did I bought less expensive cars and in many cases maintained them myself to save even more money.

Then you buy whatever car you want, can afford. As I touched upon above you want to give the car good servicing. Treat it right. Don't abuse it. Don't mod it. If after X number of years if you want to sell or trade in you have done all you can within your power to keep the car's value up. But you will still pay for the "use" of the car in the amount of depreciation the car will have experienced over time.
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post #10 of 47 (permalink) Old 02-07-2019, 11:21 AM
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Quote:
Originally Posted by Finface View Post
All,

I'm pondering whether to buy a 2019 Scat Pack Wide Body or 2019 Hellcat Redeye Wide Body, whichever one it will be factory ordered in about a month. Haven't owned a muscle car since high school when I had a pretty low powered, but still pretty throaty with glass packs 65 Mustang with the 260 V-8 (built in 64 before they upped the displacement to 289). Had a lot of fun in auto shop playing with that car. Been driving family trucksters and Subarus ever since, but now ready to take the plunge into modern MOPAR heaven.
I would advise you and your wife to test drive a 392 Scatpack. You'll find that its 485 hp. is more than enough power for you. It will be nothing like the cars you have previously owned.
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