Intangible costs (e.g. satisfaction, convenience, etc.) are very much harder to calculate or converted into dollars and cents. Need to ask economist colleague. However, you've managed to answer your own question. Hypothetically, you're willing to lose $10k for 5-years of driving satisfaction. This "satisfaction" is subjective. But let's say we convert it into an ordinal scale, say Likert's 5-point scale. Assuming you're satisfaction level is 5 (perfectly satisfied) as opposed to a better RV car which gives you satisfaction level of 3 (so-so). Thus, you gain 2 points of satisfaction for a 5 year period at a cost of $10k. The next question is, what's your limit/dealbreaker?  $20k? $50k? How many ringgit per satisfaction points per year is good enough for you? Ok so now it becomes more complex and less fun.

Not just about driving satisfaction. How about peace of mind driving?
Driving a least-safe car equal waiting for disaster happen!

Resale value can be sacrificed but definitely not for your legs!


Here are the example car with premium price tag, high resale value but with poor safety rating:

if like that all super bikes need to be thrown away as there is no protection but only satisfaction when riding it 

This calculation was shared by a LYN forumer some time back which ive tweaked to suit.

Very often, we always focus on the resale value of a particular model while ignoring the start up costs and monthly loan repayment costs. This tabulation will show you why cars with lower resale value may actually be a cheaper. This is of course assuming maintenance costs are similar.

Peugeot 407 Premium 2.0L

Purchase price (2008) = $136,888
Downpayment = $13,688 (10%)
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly loan payment = $2,361
Total loan paid = $2361 x 60 = $141679
Total paid for car = $141679 (loan) + $13688 (dp)= $155,367
Resell car 2013 (after 5 years) for $70k (49% loss)
Total loss (after 5 years) = $155,367 (what you paid for) - $70,000 (what you get) = $85,367
Toyota Camry 2.0L

Purchase price (2008) = $154,990
Downpayment = $15,499
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly payment = $2,673
Total loan paid = $2,673 x 60 = $160,414
Total paid for car = $160,414 + $15,499 = $175,913
Resell car 2013 (after 5 years) for $100k (35% loss)
Total loss (after 5 years) = $175913 (what you paid for) - $100,000 (what you get) = $75,913

For simplicity, let's assume service/maintenance costs are equal. Thus, after 5 years, a Peugeot 407 vs Toyota Camry:

407 has HIGHER total loss
$85,367 (407) - $75,913 (Camry) = $9,454

407 has LOWER start-up cost
$15,499 (camry) - $13,688 (407) = $1,811

407 has HIGHER monthly positive cash flow through lower installments
$2,673 (camry) - $2,361 (407) x 60 months = $ 18,720
SUMMARY

This clearly shows that although the Peugeot 407 has RM 9,454 lower trade in value after 5 years but it gains a total of RM 20,531 from lower start up costs and lower monthly loan installments.

Thus, buying cars with lower resale value isnt actually a poor financial decision. So i think with this, we should not allow resale values to govern our choice of vehicles. Safety, value for money, specifications and maintenance costs should take precedence.

What do you think?

not comparing apples with apples... one is 136K another one is 154K... should compare to something that of similar value e.g. Honda Civic 2.0 FD...
purchased : 128K in 07
Sold for : 75K in 2013
6 yrs depreciation... taking financing out of the equation, and looking at it as a pure P&L point of view....
the Civic lost 8833 RM per annum vs 14K of the peugeot

Bro, it is comparing apple to apple where both cars fall under D-segment category.  Your Civic is C-segment la, that is apple and orange comparison.

how do u value satisfaction of ownership then?
the joy of driving?

i know my car might have shitty resale value IF i do want to sell it, but during the short time with the car, i have plenty of driving joy as compared to some boring boat...

how do u rate that value then?

scenario:
$10k saved but I lost 5 years of driving satisfaction?
nah... i will pass...
i rather have driving satisfaction then worrying about some figures that is going to hit me 5 years later...

not comparing apples with apples... one is 136K another one is 154K... should compare to something that of similar value e.g. Honda Civic 2.0 FD...
purchased : 128K in 07
Sold for : 75K in 2013
6 yrs depreciation... taking financing out of the equation, and looking at it as a pure P&L point of view....
the Civic lost 8833 RM per annum vs 14K of the peugeot

I guess the "joy/satisfaction" of driving can only be afforded by the rich and famous, no?
If one can only afford a Proto*, then he/she should limit his/her imagination (only in terms of driving) and just enjoy the ride.

My point here being, we need to generalise when we discuss about the impact and importance of a vehicle's RV to the masses.
Unfortunately, the masses also means ordinary Joes like myself and a majority of others whom are not equipped with deep pockets.
I think it has already been mentioned that for vehicles of similar values, no calculations are required. Less RV = rugi.
Unless u want to factor in the "intangibles".

I guess the "joy/satisfaction" of driving can only be afforded by the rich and famous, no?
If one can only afford a Proto*, then he/she should limit his/her imagination (only in terms of driving) and just enjoy the ride.

well, in terms of segment maybe but here you talking devaluation, so it should be value based. doing it like this seems a little unfair to the Camry

well, in terms of segment maybe but here you talking devaluation, so it should be value based. doing it like this seems a little unfair to the Camry

I guess the "joy/satisfaction" of driving can only be afforded by the rich and famous, no?
If one can only afford a Proto*, then he/she should limit his/her imagination (only in terms of driving) and just enjoy the ride.

other people have already answer you...

that is why i say what is the value to be slapped on joy of driving?

for some, is to take their cars (proton or what not) up into the hills of bukit tinggi to enjoy the delicious corners...
for some is to enjoy high-speed cruising with their cars..
for some is to enjoy the driving feel of their cars... steering feedback etc
for some is to enjoy top down slow sunday morning cruise around town...
for some is to do donuts on an empty parking lot...

so how do u put a face value to that?

This calculation was shared by a LYN forumer some time back which ive tweaked to suit.

Very often, we always focus on the resale value of a particular model while ignoring the start up costs and monthly loan repayment costs. This tabulation will show you why cars with lower resale value may actually be a cheaper. This is of course assuming maintenance costs are similar.

Peugeot 407 Premium 2.0L

Purchase price (2008) = $136,888
Downpayment = $13,688 (10%)
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly loan payment = $2,361
Total loan paid = $2361 x 60 = $141679
Total paid for car = $141679 (loan) + $13688 (dp)= $155,367
Resell car 2013 (after 5 years) for $70k (49% loss)
Total loss (after 5 years) = $155,367 (what you paid for) - $70,000 (what you get) = $85,367
Toyota Camry 2.0L

Purchase price (2008) = $154,990
Downpayment = $15,499
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly payment = $2,673
Total loan paid = $2,673 x 60 = $160,414
Total paid for car = $160,414 + $15,499 = $175,913
Resell car 2013 (after 5 years) for $100k (35% loss)
Total loss (after 5 years) = $175913 (what you paid for) - $100,000 (what you get) = $75,913

For simplicity, let's assume service/maintenance costs are equal. Thus, after 5 years, a Peugeot 407 vs Toyota Camry:

407 has HIGHER total loss
$85,367 (407) - $75,913 (Camry) = $9,454

407 has LOWER start-up cost
$15,499 (camry) - $13,688 (407) = $1,811

407 has HIGHER monthly positive cash flow through lower installments
$2,673 (camry) - $2,361 (407) x 60 months = $ 18,720
SUMMARY

This clearly shows that although the Peugeot 407 has RM 9,454 lower trade in value after 5 years but it gains a total of RM 20,531 from lower start up costs and lower monthly loan installments.

Thus, buying cars with lower resale value isnt actually a poor financial decision. So i think with this, we should not allow resale values to govern our choice of vehicles. Safety, value for money, specifications and maintenance costs should take precedence.

What do you think?

This calculation was shared by a LYN forumer some time back which ive tweaked to suit.

Very often, we always focus on the resale value of a particular model while ignoring the start up costs and monthly loan repayment costs. This tabulation will show you why cars with lower resale value may actually be a cheaper. This is of course assuming maintenance costs are similar.

Peugeot 407 Premium 2.0L

Purchase price (2008) = $136,888
Downpayment = $13,688 (10%)
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly loan payment = $2,361
Total loan paid = $2361 x 60 = $141679
Total paid for car = $141679 (loan) + $13688 (dp)= $155,367
Resell car 2013 (after 5 years) for $70k (49% loss)
Total loss (after 5 years) = $155,367 (what you paid for) - $70,000 (what you get) = $85,367
Toyota Camry 2.0L

Purchase price (2008) = $154,990
Downpayment = $15,499
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly payment = $2,673
Total loan paid = $2,673 x 60 = $160,414
Total paid for car = $160,414 + $15,499 = $175,913
Resell car 2013 (after 5 years) for $100k (35% loss)
Total loss (after 5 years) = $175913 (what you paid for) - $100,000 (what you get) = $75,913

For simplicity, let's assume service/maintenance costs are equal. Thus, after 5 years, a Peugeot 407 vs Toyota Camry:

407 has HIGHER total loss
$85,367 (407) - $75,913 (Camry) = $9,454

407 has LOWER start-up cost
$15,499 (camry) - $13,688 (407) = $1,811

407 has HIGHER monthly positive cash flow through lower installments
$2,673 (camry) - $2,361 (407) x 60 months = $ 18,720
SUMMARY

This clearly shows that although the Peugeot 407 has RM 9,454 lower trade in value after 5 years but it gains a total of RM 20,531 from lower start up costs and lower monthly loan installments.

Thus, buying cars with lower resale value isnt actually a poor financial decision. So i think with this, we should not allow resale values to govern our choice of vehicles. Safety, value for money, specifications and maintenance costs should take precedence.

What do you think?

U confused with cash flow... Total paid for Pug 85k and total paid for Camry 76K... Camry still cheaper..

TS has started a good discussion and his effort must be lauded.

Generally, there are two items that make the bulk of our financial commitments:
1. House
2. Car

For houses, Malaysians need to be aware not to purchase new launching priced at RM700-RM800 per square feet (psf) when property prices in the surrounding area is priced at only RM300-RM400 psf. Property speculators are raking huge profits at the expense of sincere home purchasers while adding no value to the property value chain. It is way better to buy a subsale property than a new launching.

Similarly for cars, we also need to make similar decision not to purchase overpriced cars with low specifications when we can get somewhat similarly priced cars with better technologies and specifications. Certain car makers need to be taught not to rake up huge profits at the expense of hardworking citizen while continue to offer less values than the others.

The money saved could be used to enjoy a better lifestyle - traveling, fine dining, etc., things of which otherwise needed to be sacrificed so that someone could make an obscene amount of money at our expenses.

Agreed?

Ure the one who is confused. Cash flow means the amount of money you have LEFT which in this case is the excess amount of the monthly loan repayments.

lol... In total u pay more for pug...