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School Me on Car Depreciation Curves!

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#2 ·
Re: School Me on Car Depreciation Curves! (JettaMagnific)

Most all cars lose a good chunk of value when you drive them off the lot. Some cars level off at a point if they are at all desireable. Other cars become worthless.
A $40k BMW might be worth 1/2 it's value 5 years later.
A $20 Kia might be virtually worthless 5 years later.
It all depends on the car -- some rare versions are worth a lot. A Ferrari 288 GTO would have been a smart new car purchase. I don't think it's ever been worth less than it was when new.
 
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#3 ·
Re: School Me on Car Depreciation Curves! (JettaMagnific)

How big a bite is vehicle depreciation?
On average, cars (and trucks, too) lose more than 20% of their value in the first year. Some vehicles lose as much as 40%. The second year isn't much better, as they loose another 15% or so in value. Each subsequent year the bite is a little smaller, i.e., 13% in the third year, 12% in the fourth, etc. And don't forget we are talking averages here; your new vehicle may depreciate by more, or less, in any given time frame depending on the local market demand.
 
#5 ·
Yeah depends on the maker:
Honda & Toyota: About 5% max over the course of the first 4 years. I kid ya not, my friend has a 2002 accord v6 that he says could sell for 21k and they only paid like 23 for it (when the 2003s were coming out).
I think the worst are Fords and GMs, probably Dodges too.
 
#6 ·
Re: (OoTLink)

Quote, originally posted by OoTLink »
Yeah depends on the maker:
Honda & Toyota: About 5% max over the course of the first 4 years. I kid ya not, my friend has a 2002 accord v6 that he says could sell for 21k and they only paid like 23 for it (when the 2003s were coming out).
I think the worst are Fords and GMs, probably Dodges too.

Not quite that good. In fact, I just saw that the Honda S2000 was rated as the car (we're talking mainstream cars here - not a Pagani Zonda) with the best residual value after 5 years. It was close to 52%.
The Mini and the M3 also made the top ten list.

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Top 10 Cars With the Best Residual Value
By Edmunds.com Editors
If you're looking to purchase a new car, you'll probably want one that won't lose too much of its value to depreciation. Well, potential buyers, take note: With resale value in mind, we've compiled this list of the 10 cars likely to depreciate the least during ownership. Included is the percentage of its original value that each vehicle is likely to retain after five years with an annual mileage of 15,000. Our residual value percentages are based on each car's national True Market Value (TMV®) price plus typical options and destination charge. Rankings and figures are updated monthly.
1. 2006 Honda S2000 — 51.7%
2. 2006 Mini Cooper — 51.5%
3. 2006 Acura TSX — 47.7%
4. 2006 BMW M3 — 47.6%
5. 2006 Mercedes-Benz SL-Class — 47.0%
2006 Mercedes-Benz SLK55 AMG — 47.0%
7. 2006 Infiniti G35 — 46.9%
8. 2006 Acura RSX — 46.5%
9. 2006 Lexus SC 430 — 46.5%
10. 2006 Subaru Impreza WRX STI — 46.4%




Modified by Hans Stuck at 12:16 AM 9-9-2006
 
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#7 ·
Re: (Hans Stuck)

And here are the worst:

Top 10 Cars With the Worst Residual Value
By Edmunds.com Editors
If you're shopping for a new car, you'll want to put residual value on your list of factors to consider. Vehicles with higher residual values come with lower monthly payments should you decide to lease and improved resale value should you decide to buy. This list spotlights the cars with the lowest residual values — that is, they're likely to depreciate the most during the ownership period. Below, we show the percentage of its original value that each vehicle is likely to retain after five years with an annual mileage of 15,000. Residual value percentages are based on the national True Market Value (TMV®) price, plus typical options and destination charge.
These cars aren't as bad a deal as you might think. Many of them are very inexpensive to begin with. Furthermore, cars with low residual values can be bargains when purchased used, since you'll likely be able to purchase a car on this list for far less than you'd pay for a competing vehicle more adept at holding its value. Note that the rankings and figures on this list are updated monthly.
2006 Kia Rio — 20.7%

2006 Hyundai Accent — 23.0%

2006 Kia Spectra — 24.0%

2006 Dodge Stratus — 26.0%

2006 Hyundai Elantra — 26.3%

2006 Ford Taurus — 26.5%

2006 Kia Optima — 27.4%

2006 Suzuki Reno — 28.6%

2006 Ford Crown Victoria — 28.7%

2006 Suzuki Forenza — 29.2%
 
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#8 ·
Re: (OoTLink)

Quote, originally posted by OoTLink »
Yeah depends on the maker:
Honda & Toyota: About 5% max over the course of the first 4 years. I kid ya not, my friend has a 2002 accord v6 that he says could sell for 21k and they only paid like 23 for it (when the 2003s were coming out).

A quick check with autotrader shows there is no shortage of V6 02 Accord sedans with +-50k miles in southern California for sale (many many under $15k). Considering the MSRP of a 02 V6 EX Accord sedan was almost $26k, I think your friend is either loony toons or misinformed. These are not rare cars on the used car market, so there is no special 'no depreciation' rule.
http://www.autotrader.com/fyc/...96179
Quote »

I think the worst are Fords and GMs, probably Dodges too.

If you pay MSRP for a vehicle that later in the year had a $3k rebate, then expect to get reamed. But if you buy the vehicle with the discounts and rebate, the depreciation is not that bad. I think depreciation ratings are based on MSRP and not 'out the door' pricing. For example- I bought a new vehicle that is on the 'worst depreciation' list in 01- a Mazda B2300. I traded it just 6 months later and actually got $2k less than I originally paid -in trade- towards another new vehicle that was below invoice (before rebates). It's all in the deal. http://****************.com/smile/emthup.gif


Modified by BRealistic at 9:20 PM 9/8/2006
 
#9 ·
Re: (BRealistic)

Quote, originally posted by BRealistic »

A quick check with autotrader shows there is no shortage of V6 02 Accord sedans with +-50k miles in southern California for sale (many many under $15k). Considering the MSRP of a 02 V6 EX Accord sedan was almost $26k, I think your friend is either loony toons or misinformed. These are not rare cars on the used car market, so there is no special 'no depreciation' rule.
http://www.autotrader.com/fyc/...96179
If you pay MSRP for a vehicle that later in the year had a $3k rebate, then expect to get reamed. But if you buy the vehicle with the discounts and rebate, the depreciation is not that bad. I think depreciation ratings are based on MSRP and not 'out the door' pricing. For example- I bought a new vehicle that is on the 'worst depreciation' list in 01- a Mazda B2300. I traded it just 6 months later and actually got $2k less than I originally paid -in trade- towards another new vehicle that was below invoice (before rebates). It's all in the deal. http://****************.com/smile/emthup.gif

Modified by BRealistic at 9:20 PM 9/8/2006

this is where ppl dont understand my purchase of the MAXX.
they say ill get reamed in trade in...
i got $7k off, along with GMS pricing...
yes, those who paid MSRP, or Invoice, are reamed.
me? not nearly as badly even if i traded it in right now.
 
#10 ·
Re: School Me on Car Depreciation Curves! (BRealistic)

Quote, originally posted by BRealistic »
How big a bite is vehicle depreciation?
On average, cars (and trucks, too) lose more than 20% of their value in the first year. Some vehicles lose as much as 40%. The second year isn't much better, as they loose another 15% or so in value. Each subsequent year the bite is a little smaller, i.e., 13% in the third year, 12% in the fourth, etc. And don't forget we are talking averages here; your new vehicle may depreciate by more, or less, in any given time frame depending on the local market demand.

Note, however, that the first year of depreciation includes the spread between the retail and trade-in values (you always buy new cars at retail, as defined by what a dealer is willing to sell a car for, not necessarily MSRP, but you sell at trade-in, or, at best, private party, value). The spread between retain and trade-in values can be 15-20% of the value of the car.
What this means is that if you buy a new car, you may find that you'll lose 20-30% if you try to trade it in after a month. But if you try to buy a used current model year car from a dealer, you may save very little (in some cases, I've seen dealers offering used current model year cars for more than their ad had new ones with similar options offered for).
If you buy a used car from a dealer, you'll face a similar loss from the spread. If you buy a used car private party and later sell it private party, you are more likely to avoid that spread loss. Of course, private party transactions are more work.
 
#11 ·
Re: (OoTLink)

Quote, originally posted by OoTLink »
I think the worst are Fords and GMs, probably Dodges too.

If you are using a depreciation chart based on MSRP, cars that are normally rebated look worse in depreciation than they actually are.
However, some of the models are still hurt by the large number of 1-2 year old ex-fleet cars showing up on the used car market. The Ford Taurus, which recently sold 60% or so of its new output to fleets, had horrendous resale value -- dealers were covered in one year old ex-fleet Tauruses for about 55% of rebated new selling price. One year old Tauruses were going for about the same price as one year old Focuses, even though the Focus' rebated new selling price was substantially less (though admittedly the Focus is a better car than the Taurus if you don't need the Taurus' extra width).


Modified by tjl at 9:35 PM 9-8-2006
 
#12 ·
Re: (Nourdmrolnmt)

Quote, originally posted by Nourdmrolnmt »
this is where ppl dont understand my purchase of the MAXX.
they say ill get reamed in trade in...
i got $7k off, along with GMS pricing...
yes, those who paid MSRP, or Invoice, are reamed.
me? not nearly as badly even if i traded it in right now.


You haven't heard me criticising the MAXX. I think it is a very good package for somebody wanting a V6 auto wagon thing- though the styling is a bit odd. But I do think GM should offer the MAXX with the 2.4 engine and tranny from the base G6, which would make it even a better low cost economy minded buy.
 
#13 ·
Re: (BRealistic)

Quote, originally posted by BRealistic »


You haven't heard me criticising the MAXX. I think it is a very good package for somebody wanting a V6 auto wagon thing- though the styling is a bit odd. But I do think GM should offer the MAXX with the 2.4 engine and tranny from the base G6, which would make it even a better low cost economy minded buy.

ive never said you, when i first purchased it ppl where like "resale sucks"
i just checked out edmunds, private party retail of 14.5k in clean condition.
i paid 16.5k
thats pretty damn good.
 
#16 ·
Re: (Nourdmrolnmt)

There's an argument pushed by some that the cheapest cars won't likely depreciate that much because there isn't much further to fall anyway. Whereas some very expensive cars will lose a lot of their value yet still remain expensive.
 
#18 ·
Re: (Bonfire)

Quote, originally posted by Bonfire »

Technically yes. But once you sign on the dotted line it's worth like 150 million times less money.

and once you start modding it and run the warranty out, it will be worth a million billion dollars less than when you sign the dotted line
 
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