How to Own a Sports Car and Not Wreck Your Finances

I just bought a new sports car. I had been waiting 5 years for my son to get out of daycare before taking the plunge again. I’m really enjoying it, but the process of buying the car reminded me expensive sports cars are. If you don’t exercise a great deal of self-control, that new ride can wreck your finances.

It didn’t start like this of course. My first car was a 1986 Toyota Corolla hatchback with ~250,000 miles on it. I graduated from that to a Volvo 240DL with 350,000 miles (and the original clutch!). As you may have guessed, my parent’s motto when it comes to cars has always been “cheap and reliable.” 

So they were pretty confused when their boy got interested in sports cars. And they stayed confused when I was never able to shake the infatuation.

But I like money far too much to let my love of cars push me to make bad automotive decisions. After all, I do plan to become rich sooner rather than later. I believe that you can have your cake and eat it too. You can still own a sports car and not lose 5 figures in the process.

So here’s my guide to owning a sports car without wrecking your finances.

Don’t Buy New Sports Cars

Prices for vehicles have been out of whack since the pandemic. At first, new car inventory sat around at dealers as everyone sheltered in place [source]:

As the pandemic wore on, reduced production plus deferred replacements sent new and used car prices through the roof [source]:

When our family’s ‘08 Honda Odyssey minivan died in 2021, I did the unthinkable and bought a new vehicle. Why? Because used models in our desired year and trim were actually more expensive than buying new. People either didn’t want to wait or couldn’t. That meant that if a dealer had the vehicle on the lot, that commanded a premium.

A Return to Sanity for Sports Car Prices

Luckily, things have cooled off and some sanity has returned to the market. Today, for most vehicles, you can save a substantial amount of money by purchasing a used vehicle. Those couple feet of pavement leading from a car dealership to the nearest road are far and away the most expensive hundredth of a mile you’ll ever drive. Even among highly reliable, reputable brands, 5 year depreciation is a big deal [source]:

The average new car costs $48,000 in 2023. [source] Even Toyotas depreciate >40% in the first 5 years of ownership. That means you can save a bunch of money buying used. 

Modern Sports Cars Are Reliable

I can hear readers crying out at that used cars are cheaper because they’re less reliable. And that’s right. Controlling for brand and model, a used vehicle will be less reliable than a new vehicle. 

But modern cars have become much more reliable. 

In the 1960s and 1970s, for instance, the typical car reached the end of its life around 100,000 miles. By 2012, the typical car lasted to around 200,000 miles. [source] Today, some reliable models sell at a premium even after racking up 100,000 miles. I spent less than 5 minutes finding this used Camry with 104,000 miles with a “Fair Value” of $17,000 on Carfax:

This improvement in reliability has occurred at the same time as average household expenditures on transportation have actually declined [source]:

So today, the cost paid by households on transport per year has fallen since 2000. At the same time, used cars have become substantially more reliable. That’s a pretty good argument for used vehicles.

Friends Don’t Let Friends Buy New Sports Cars

The amount of savings you can expect to reap using the “buy used” strategy will depend on your budget. Sports cars tend to be fairly pricey. In 2023, sports cars were tied for the third most expensive vehicle category behind luxury vehicles and full-sized pickups [source]:

To recap, pandemic pricing is over, new car depreciation is significant, sports cars are expensive, and modern cars are much more reliable. All this leads to a significant advantage to buying used.

Get the Price Data For Your Sports Car

Let’s assume that I’ve convinced you to buy a used rather than new sports car. Great, I’ve probably just saved you more than $10,000 right out of the gate. That’s a good start, but there’s more to being a financially responsible sports car owner than just going on Craiglist and checking the “used” box. You need to understand the relationship between mileage and price.

Here’s where I really open up about what a sports car / data geek I really am. For most cars, the two most important characteristics are price and mileage. This makes at least a rough sort of sense. The less used a car is, the more life it probably has left, and thus the more it’s worth. This relationship between the mileage and the price is typically called the depreciation curve. 

All cars have a depreciation curve that goes down and to the right. The slope of that line, however, varies by car. For some vehicles, low mileage equates to massively higher prices. For others, buying a low-mileage used car is actually a steal. You’ll never know the difference if you don’t have the data.

Finding Your Car’s Curve

I love early 2000s BMW M5s. They’re completely analog, fun to drive, and gorgeous to look at. I mean ‘cmon:

In addition to all those wonderful characteristics, they’re pretty cheap. A new BMW M5 will set you back ~$120,000. You can get one of these in good shape for ~$30,000.

But with an old car like an e39 M5, there’s a wide range of quality and mileage. Do you want to get the cheapest one on the market and opt for the vehicle with 190,000 miles? Or do you want to pony up serious cash and get a pristine garage queen with only 25,000 miles? And how much additional cash does it cost to get the low-mileage one anyway? 

To answer these questions, you need to go get some data samples. I’m partial to watching auctions on Carsandbids.com or Bringatrailer, but those two sites do tend to be pretty high-end. For more mass-market vehicles, Autotrader, Cars.com and others will work. 

Plotting for The Win

After you’ve found some examples, you’ll plot out the car’s depreciation curve. In this case, I just so happen to have done the heavy lifting for you:

If you plot a line of best fit using a calculator like this one, you get the following:

This line tells us a couple of very useful things about this particular car:

1. It’s a deal to get a lower-mileage vehicle. In the middle of the mileage range (50-150k miles), there isn’t a ton of cost difference. These cars typically last until ~200k miles. You can get a 50k example for less than 2x the cost of one with 150k miles. You would expect that difference to be ~3x, which means that lower miles is a deal.
2. You probably can’t buy a car with really high or low miles. The mileage distribution is pretty normal (bell-shaped). That means there aren’t a lot of examples of really high or really low mileage cars. That’s useful because you can safely rule out actually buying one of those cars. 
3. Features and intangibles are important to buyers. There is substantial price variation around the line of best fit. That means that variables other than mileage are moving the prices up and down. That makes obvious sense. You’d probably pay less for a BMW M5 painted barbie pink. You can use this to your advantage and determine which features other people dislike that you actually love. Maybe you are a huge barbie fan and you love that paint job. Lean into your competitive preferences!

Research Sports Car Reliability

Getting a good deal on a used sports car is great. I love saving money, especially on big purchases. But it’s an empty victory if the car ends up costing you $2,000 per month in repairs and maintenance.

As noted above, cars have become steadily more and more reliable over time. With that said, there’s still a wide spectrum of reliability. On the one extreme you have bulletproof, daily driver supercars (90’s NSX!). On the other extreme, temperamental vehicles slower than most new sedans (I’m looking at you Lotus).

Here’s how I avoid buying a lemon.

Consumer Reports for Sports Cars?

Consumer Reports is the most comprehensive database of car reliability data you can easily get access to. You can get access for $10 per month. This is my first stop when I’m researching a sports car.

Consumer Reports, however, only has detailed data about mainstream brands / models. You won’t find any reliability reports for Ferraris or Bentleys.

So for more niche brands, you’ll be out of luck on CR. But for many of the mainstream brands and models, you can at least find reliability data about sister models.

For instance, I absolutely love the F80 BMW M3. BMW made it between 2014 and 2018. It doesn’t have the dopey front intake grills of the current (G80) generation, it accelerates to 60 mph in under 4 seconds, it has a beautiful interior, and it is one of the last compact sports cars to still offer a manual six-speed transmission. 

Consumer Reports doesn’t review any of the M-division performance vehicles. But you can still get useful information from CR. Here’s the reliability chart for the base model BMW 3-series covering the 2014-2018 model years [source]:

BMW makes substantial modifications to its performance vehicles. As a result, they are generally less reliable than the base models. They are, however, still assembled using many components from the base model car. And reliability issues that affect the base model are often a symptom of a larger manufacturing problem. So if you want a BMW M3 from this generation, you should avoid 2014 and 2015 model years. 

Google Searches

Even if you can’t get any information at all from Consumer Reports, you can still learn a lot about specific cars, models, and years by doing a bit of proactive searching.

My go-to starting place is to search Google for some variation of the phrase “is [manufacturer] [model] [year] reliable?”. For the BMW M3 above, the search would be “is the BMW M3 2018 reliable?” 

You’re looking for owner’s forums to parse through, not a definitive guide. You don’t have to exhaustively research the car and all of it’s mechanical details. Just quickly read a couple of forum threads and start noting the mechanical defects that owners and enthusiasts mention.

As an example, the BMW e39 M5 that I used to own has a known carbon buildup issue. It is very costly to fix and it renders the car unable to pass emissions testing in most states. Since it’s mostly a risk for higher-mileage vehicles, it makes sense to buy lower-mileage if you can afford it. 

And in case you think I’m some sort of mechanical wizard / car repair guru, I don’t have a flippin’ clue what most of the mechanical jargon means. Throwing a rod bearing? That sounds … dangerous. Gasket head seal failure? I would like that to not happen to my body, thank you very much. 

The point here isn’t that you need to understand exactly what all of these systems do. You just need to have a base level understanding of what can go wrong. Once you have a basic understanding, you can screen used car listings.

Sports Car Youtube Channels

There are lots and lots of excellent car-review Youtube channels. My personal favorite is Doug Demuro, but I would just do a Google search for “[manufacturer] [model] [year] car review Youtube”. For the BMW M3 above, that search string would work out to “BMW M3 2018 car review youtube.” 

Use your judgment and watch a couple. It’s often eye-opening to see amateur Youtubers document a car. You’ll find yourself thinking “oh wow, the dashboard looks way cheaper than the press photos”or “geez, the exhaust on that is too loud.” Those are the kinds of details that Consumer Reports and written mechanical reviews won’t cover.

Putting it All Together

You might be thinking at this point “does it really pay to do all this legwork”? That depends on how expensive your tastes are. If you like luxury or exotics, then the steps above will save you a ton of money. Very few people are confident enough to purchase an expensive used vehicle. Most people assume that those cars must be exorbitantly expensive to maintain. That’s true of some models for sure, but not always.

For instance, a mid-90s Acura NSX can be reasonably expected to hit 200,000 miles with little to no major maintenance. Most Corvettes from previous generations (C5s and C6s in particular) are cheap to own. Even the exotic Nissan GT-R is a reliable and dependable car. It can also do 0-60 in 2.8 seconds. 

The tools I’ve outlined above should enable you to identify the diamonds in the rough.

Top 4 Financially Responsible Sports Cars

Okay, which cars do I recommend for the financially responsible? Using all the steps above, I’ve compiled a list of 4 vehicles that I think are fun and responsible.

Best All-Around Deal: Tesla Model 3 Performance

If you want the best all-around deal, I’d pick the Tesla Model 3 Performance Edition. It does 0-60 in 3.1 seconds, has 4 doors, looks okay, and has average reliability.

Let’s not mince words: the build quality on these isn’t great. If you want a luxury experience, you’ll be disappointed. The interior is cheap and the obvious lack of build quality shows. The weather stripping on mine started to detach from the inner door frame 1 day after I got it. The panel gaps are an embarrassment, and it is surprisingly loud on the highway.

But no other car on the market comes close to this level of performance for under $40,000. I picked mine up for $33,000 with about 34,000 miles. That’s 31% cheaper than the average car sold in America this year. It’s already depreciated substantially from its original purchase price and is still under warranty for another 3 years. Granted, you don’t get the Federal EV incentive when you buy used, but the cost takes that into account.

I’ll readily admit that I miss a proper six-speed transmission and the noise of an internal combustion engine. But it’s an insane deal at this price point.

Best Performance for the Dollar: Nissan GT-R

If you’re okay spending more and you’re just focused on pure performance, the Nissan GT-R is king. You can pick up used models from around 2010 for $70,000 like this one. It does 0-60 in a face-melting 2.8 seconds, and has a great reliability track record. You can daily-drive Godzilla if you want, although I’m told it’s a punishingly harsh ride for commuting. 

The only major downside is that it’s less practical than a 4-door super saloon like an M3.

Best Luxury Pick: BMW F90 M5

If you’re willing to take a big hit on depreciation, the M5 is really, really hard to beat. This is a huge, luxurious, German 4-door sedan that still manages to sprint 0-60 as fast as the Nissan GT-R: 2.8 seconds. And remember: you’ll have access to every conceivable luxury feature while smoking Teslas at the drag strip. 

You can pick up used examples in decent shape for around $80,000. That’s nearly 3x the cost of the Tesla Model 3 and the reliability picture for the F90 generation is dubious. With so many literal moving parts, I’d be a bit scared to own one as they get older.

To add to the insult, they are likely to continue depreciating at a breakneck pace. For example, this 2019 competition edition with 24k miles sold in September for a hair under $70,000. It was worth about $120,000 when new a scant 4 years ago. That means it’s lost $50,000 worth of value, or $12,500 per year. That doesn’t count maintenance, insurance, and gas for a thirsty 600 hp engine.

But I mean, just look at it – it’s an incredible piece of engineering. If you’re willing to burn some money, I can’t think of a better way to enjoy the flames.

Best Budget Pick: Volkswagen Golf R

It won’t win at the drag strip, but Volkswagen’s hot hatch is a steal these days. You can pick up used examples from the mid-20-teens for ~$20,000 like this one. They have 4 doors, a nice interior, lots of torque, and a decent 0-60 time in the low 5 second range. They can be driven economically, and unlike the GT-R or M5, are almost completely depreciated.

The R trim isn’t insanely reliable, but it’s average for the class. And for those quality-minded folks, unlike the Tesla, you won’t have door trim falling off on your second day of ownership.

Conclusion

Owning a car as impractical as the ones above is certainly a luxury. And if you are a strict FIRE adherent, none of the cars on the list are advisable. For those looking to pinch pennies, go get a used Toyota or Honda. Drive it as little as you can, and appreciate all the money you’re saving. 

But if you’re afflicted by auto addiction, you can save yourself tens of thousands of dollars by just doing a couple of hours of research. 

Happy overthinking!