Self insuring... a continuation of "an observation" (long)

[Onad]

This thread is somewhat of a continuation of the “an observation” thread.

There was a lot of good detail regarding what Boxster owners are spending on an annual basis for both regular maintenance and unfortunate surprises in the referenced thread. In order to mitigate the risks associated with an out of warranty Boxster some have bought extended after-market warranties, while others have “self-insured” by setting aside rainy day funds.

I’d be interested in hearing opinions on what amount of money should be put aside to self-insure. Obviously it depends on the year, condition, and mileage. With that said, let’s assume that regardless of model year, the Boxster is in good condition and has been driven 8-10 K a year.

Assuming you want to cover surprises and regular expenses (brakes, tires, and oil changes) over two years I was thinking the following:

2000 and 2001: A reserve fund of $3500
2002: A reserve fund of $2500 (8-14 months factory warranty remaining)
2003: A reserve fund of $1500 (15-24 months factory warranty remaining)

What do you think? Is this overly cautious or not cautious enough? Averages are the important thing here. Obviously putting aside 10K for an engine replacement would be great, but not practical. Discuss...

[Perfectlap]

it sounds like you are planning to buy the car outright without any financing.
I really don't care to ever do that. So my plan was to buy a second hander with less than 15,000 miles. I was very successful (actually only took a week) and found my 2000 S with only 10,000 miles (its litterally brand new). I'm shooting to pay it off in 3 years with an extended service contract payment schedule for that period of time.
My advice would be to find the Boxster of your dreams with the lowest amount of miles that was garage kept with newest model year possible. Once you have wittled down how much of a budget you will propose for this, the next step will be to consider your safety net of extended warranty or going it solo.

I was long searching for a vintage 911 and a friend gave me some advice that seems to be the standard for Porsche buying:
Buy the newest Porsche you can afford.

[Onad]

I'm just solicting opinions on several ways to view one's "Boxster purchasing options." I've heard the "buy the best Porsche you can afford" advice, but I think that's for a certain type of person. For example, even if I had $50-60K to spend, I personally wouldn't buy a brand new 987 S. There's other things I'd use the $ for. I'm personally leaning towards an 03, but a friend from work is buying an 01 even though he could afford an 05.

With that said, if members inherited a 2001, 2002, or whatever year Boxster; I'm wondering how much they would want in reserve to cover both the expected and unexpected expenses of Porsche ownership.

Thanks for your comments. Sounds like you got a great Boxster (10k!).

[wetstuff]

If you bought a $60k car for $30k (used vs. new) - you are already ahead $30k. IF you could have afforded a $60k car - then you can easily afford to fix the $30k, no?!

If you stretched to make the $30k - then you're upsidedown already. I'd reach a little more and bury the extended warranty in the payments, and hope you keep your job.

If the thing that makes Boxster owners quake is a $900. RMS replacement - then it seems $900 in a jar should calm your nerves...

...Then there are handwringers who will never feel safe in their skin - or the new breed of schmuck who thinks the rest of the World OWES him a problem-free life.

Maybe we can modify the old saw; "If you have to ask...." into; "If you cannot afford to fix it....."


Jim

[Brucelee]

ALL autos (save collectables) represent a sinking, depeciable asset with the added downside of future mechanical costs. When one buys a new car, MOST of the mechanical costs issue is dealt with for a limited period of time. In this case, the biggest cost of the car by far is the interest and depreciation that one incurs to procure the car. This cost is often overlooked but is very real indeed.

When you buy used, you diminish the interest and depreciation costs over time but are normally subjected to the risk of larger mechanical costs. One can "lay off that risk" to a warranty provider or retain it. This is the self insurance option that is mentioned above although it is not technically self insurance as the insurance industry terms it, but simply retaining the risk entirely for yourself.

Whether you "put away" money for a future repair is not a cost or risk issue but simply a funding issue. If you have the dough, it matters not if you segregate the funds or not. If you don't have the dough, well that is what loans are for.

From my perspective, this issue of warranty is always tied to one's own risk profile. If you hate to have unexpected bills, you can reduce, but not eliminate, this psychic pain by paying upfront, knowing that you MAY NOT receive any of this money back. Then again, you may receive more of it back and the peace of mind of having the protection.

So, while we may want to think there is a correct answer here, the only real answer is, it depends on your cirucumstances and your feelings.

Hey, let the good times roll!

[Perfectlap]

Actually not all cars depreciate. ANd I'm not referring to collectibles.
A friend and his family buy exclusively Mercedez and have been doing so for over 30 years. One member purchased a very high end model which was very hard
to get in this area (or maybe everywhere else). Some how people found out that he got this Merc and were calling him wanting to buy the car. Some offers were as high as $20,000 above what he paid, he's very wealthy and very crazy about Mercs. So he kept it. He also has a 1990 SL 500 that has about 6,000 miles! THis past year he had a bad experience at the dealer and retalliated by buying a BMW 7 series. and driving onto the Merc lot.
(He took it back after six months because he couldn't stand the I drive)

I guess its about Supply and Demmand sometimes with cars.