Invest in the car that’s in your garage
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If logic had entered the equation, I wouldn’t have bought a sports car at all. For a 23-year-old barely six months into his first real job out of college, a used Civic would have been sensible. A Forester, maybe, because winters in Michigan are rough. But I wasn’t interested in sensible. Sensible came with a roof.
It was March 2014, five months into my car magazine career. Whether I would ultimately hack it remained an open question. Seven of my coworkers, including current Hagerty Insider managing editor David Zenlea, owned Miatas. Three or four grand was the going rate for a decent NA-generation driver.
That, too, would have been the sensible choice.
Instead, I blew $8300 on a 2001 BMW Z3 2.5 roadster with 71,500 miles. That sum represented more than half of my total savings, mostly earned from years of waiting tables. Several people told me I was making a dumb choice, and that the money I’d have to put into a 13-year-old BMW made in South Carolina would eventually fill me with regret.
They were wrong about the last part. I love this car to pieces, even when it’s in pieces. The time, energy, and investment I’ve put into my BMW over the last decade has been entirely worth it to me.
Car valuation is Hagerty’s bread and butter. Our insights from comprehensive data, we hope, help people make decisions that will allow them to get—or even just keep—a vehicle that makes them happy. But for all our talk about savvy car purchases, we don’t often acknowledge the upshot investing in the health of one’s car: you get to keep driving it.
I’m not talking about a full rotisserie restoration, though that nuclear option is certainly worth it for some. My mantra has been four-fold:
(1) Be religious about basic maintenance.
(2) Address common failure points before they have a chance to wreak havoc.
(3) Fix things promptly when they break.
(4) Drive it as much as possible.
Long did I pine for a Z3, so the last thing that crossed my mind when I finally got it was what it would one day be worth. I’d picked a great example of a fun car and expected German-car ownership costs. The point was to enjoy it. If I lost my shirt, it was because I wanted a really good tan.
Everything I’ve done to the car myself—from oil changes to brakes, weather-seal repair, headlight bulbs, and new engine gaskets—has been to ensure my spring, summer, and fall are punctuated with weekend spurts of top-down fun. That straight-six song! Those classic proportions! That oh-so-BMW rubber-band-ball shift feel! It doesn’t get old, even as my recently graying beard reminds me I do. And when things go wrong beyond my expertise or bandwidth to handle, I have no problem paying a shop to get the car back on the road ASAP. My rough annual maintenance budget of $1000 sometimes takes a big hit, but usually there’s some left over to roll into next year. So when the choice is between drenching myself in transmission fluid to badly replace a transmission shift-shaft seal and swiping my credit card, I take the latter route.
As a matter of interest, I decided to check—for the first time since buying it—what a five-speed Z3 2.5 in #3 (Good) condition is worth. At the time of purchase, in 2014, $8300 was the exact average value for my car. Not bad for a bright-eyed and bushy-tailed hopeful like me, right? Unlike full-bore M Roadsters and M Coupes, however, ordinary Z3 roadsters like mine were not finished depreciating. Values hit their bottom of $7500 in 2021, eventually rebounding and growing to today’s average of $11,800. Adjusted for inflation, more like $9400.
Lord knows I’m upside down. Just how much so I don’t particularly care to calculate. Maybe it’s the blood rushing to my head, but it’s been a lot more fun than puttering around in a Forester.
Last summer, I realized my Z3 was 21 years old. At that point in its life, Rule #2 applied to a number of components. The entire engine cooling system, for one thing, is suspect on Z3s and related E36 3 Series BMWs at this age or about 80,000 miles. Rubber and plastic pieces like hoses, expansion tanks, and fan blades get brittle and risk cracking, which means overheating that BMW’s aluminum-block inline-sixes do not tolerate well. Brake lines. Motor and transmission mounts. Suspension and differential bushings. This stuff gets tired, but at a rate slower than one can easily notice.
The last thing I wanted was to cook my engine, lose my brakes, or risk damage to my subframe (unfortunately common on Z3s with worn diff bushings, due to spot weld failure). Thanks to a fellow named Bryan Salgado, who runs a popular Z3 and Z4 maintenance group on Facebook, I executed a plan. I ordered a giant, $2900 pile of parts and had them dropped off at Salgado’s home garage in North Carolina, courtesy of a nearby BMW supplier called BimmerBum. He spent three or four days performing all of the necessary work, at a very reasonable rate of $75/hr. Given that my car was something like the eighth or ninth “kitchen sink” project Salgado had done for friends and Z3 club members, I knew I was in good hands.
All told, the work involved a complete cooling system overhaul, replacement of engine and transmission mounts, seat rail bushing repair, stainless steel brake lines, new front control arms, springs, shocks, suspension bushings, differential bushing, and a weighted ZHP shift knob for good measure. My boss, Larry Webster, was skeptical that I’d spent $5500 on an unremarkable Z3.
“Really? It’s worth that much to you?”
“Absolutely,” I said.
And wow, what a difference. I have a story in the works that will get deeper into just how much better the car drove after the kitchen sink refresh, but suffice to say it might drive better now than when I bought it.
Naturally, a wayward traffic barrel rolled into the left lane outside of Louisville, Kentucky, on my way back to Michigan. Nobody was hurt, which is what really matters, but I can’t say I was thrilled to see a cracked bumper cover and dented driver’s door, among other damage. It’s insured (thanks, Hagerty!) and it will be fixed. The car was never meant for the concours lawn, anyway.
I have no plans to part with my Z3, so all I care about is that I can drive it when spring comes around. Those precious moments behind the wheel are the only return on investment I care to track.
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When you said you may be upside down… My thought on this — everyone spends money on things that make them happy. Some might call them hobbies. We will always be upside down in our hobbies or spending money on entertainment, eating out, alcohol, cigars or whatever it is that does it for us.
You’ll never really be upside down with your BMW if you compared what you are doing to buying a brand new BMW every few years after the warranty is up. Yes you can be upside down looking at values. But are you really upside down when you think of the smiles per mile and the enjoyment you have gotten from driving, keeping, and maintaining your Fun vehicle?
Top down is great – still have a rule that the convertible does not go out without the top down – although it might go up to come home. Remember some wonderful nights going over the mountains with my wife, wrapped up in blankets, hats and gloves on – they had turned every star in the sky on for us. But – you can carry it too extremes – went skiing with the top down once, however the top was absolutely frozen and would not go up when I got to the parking lot. Snowed a lot that night, had to dig out the driver’s seat to drive home after the lifts closed. Still, a lot of the snow blew out on the way down the mountain, but the car was “kinda damp” for the next week or so. That was late sixties, I have tried not to do that one again.
My father bought a new 1961 Galaxy convert in Chicago, it was January and he took me to school in it. Top down was in my blood since. Ram Air GTO, Wildcat, Corvette, Dakota, Jeep CJ7.
Great article Eric – really appreciate your point of view on car ownership. Sorry about the damage you received, but you had the right attitude about that also. Keep enjoying your car, it’s a beauty!
I agree that an old car that you love can be worth keeping and that timely maintenance is the key. I do wonder, however, why you are grateful to your insurance company for doing what you paid them to do. They provide a service for a price. It’s a transaction, not a favor.
I’m definitely of the belief to go with what you have in the garage, especially when watching your budget.
I have 2 vettes both purchased new, a 30 year old c4 and a 13 year old c6. The c4 has 165k and the c6 74k on the clock and extremely inexpensive to maintain since I do almost all the dumb work myself. Drive am is my motto too.
Think of how much money you saved not buying new. You are not under water. It’s probably more fun to drive than a new beemer anyway.
I first drove a 67 Cougar over 20 years because I just liked it (and recently bought it back). I’ve driven a 90 Mustang Convertible for 30 years now; I tell people that it is not old and cool or new and cool, but I was hit by a school bus a couple of years ago and I decided that I still like it better than anything else “practical” that I could think of, so I paid to have the “frame” fixed and I did the rest. People buy $30K Hondas every day and sell them for a few thousand 10 years later- don’t sweat the value of yours.
Great article! I have a 2002 z3 3.0 M Sport the same color as yours. I live in Traverse City. I’ve seen another zooming around. Maybe it’s yours. I’ve had mine for 7 years. It had 32000 on the odometer when I bought it. It now has 44000 and is going strong. Worldwide does the maintenance and I follow the same guidelines you do. Now that it’s 21 years old, I’ve thought I ought to contact hagerty to get an estimate on insuring it with you. Thanks for the z3 coverage. Really, there’s no car quite like it.