Discussion
Afternoon,
Thinking of buying a FFRR but can't decide if I should go for the new model or a run-out of the old one. The purchase price is less relevant than the overall cost of ownership i.e. depreciation. Bearing that in mind and on the basis I tend to keep cars for 3+ years am I better to buy new and trade-in in three years or buy old and trade up in three years?
All advice welcome!
P
Thinking of buying a FFRR but can't decide if I should go for the new model or a run-out of the old one. The purchase price is less relevant than the overall cost of ownership i.e. depreciation. Bearing that in mind and on the basis I tend to keep cars for 3+ years am I better to buy new and trade-in in three years or buy old and trade up in three years?
All advice welcome!
P
Stating the obvious, new will always lose more than used over the same period. Given the fact that the 405 is £20k-£25k more expensive new than the like for like 322, you will lose a lot more over 3 years with a new £90k 405 compared to buying an end of range 322 for a maximum of mid £50k's.
I am on my 3rd L322 and bought the most recent a year ago the same weekend the big price raise for the 405 was announced and as a direct result of this announcement. Because of the significant 405 price increase the late 322 prices are holding firm and the late models have dropped their price little in the past 12 months.
Having driven the 405 at length and read about the teething issues, I am more than happy to continue with my 322 for a couple more years and save a huge amount of depreciation by doing so.
I am on my 3rd L322 and bought the most recent a year ago the same weekend the big price raise for the 405 was announced and as a direct result of this announcement. Because of the significant 405 price increase the late 322 prices are holding firm and the late models have dropped their price little in the past 12 months.
Having driven the 405 at length and read about the teething issues, I am more than happy to continue with my 322 for a couple more years and save a huge amount of depreciation by doing so.
Phil. said:
If you decide to go for a 322 then I suggest you seek out a Vogue SE or AB rather than a Westminster. The latter is a blinged up Vogue and will depreciate more, where as the SE has nicer seats and less bling and will depreciate less IMO.
Not true. The Westminster was the SE with all the options (except rear seat entertainment) thrown in as standard - sold at the price of the normal Vogue, hence it was a better deal to begin with and as a result depreciates less (I have just sold mine so should know). The AB was the blinged up version with different front and rear bumpers. Edited by Phil. on Friday 13th December 12:15
Westminster was a Vogue with some extras (better stereo, dual-view screen, 20" wheels, shinier grille and vents etc.), but an SE has stuff a Westminster doesn't (e.g. semi-aniline leather, adaptive cruise).
The awful Exterior Design Pack was a no-cost option on the last Autobiography cars, depending on colour.
The awful Exterior Design Pack was a no-cost option on the last Autobiography cars, depending on colour.
Edited by NomduJour on Monday 16th December 08:44
Phil. said:
Stating the obvious, new will always lose more than used over the same period. Given the fact that the 405 is £20k-£25k more expensive new than the like for like 322, you will lose a lot more over 3 years with a new £90k 405 compared to buying an end of range 322 for a maximum of mid £50k's.
I disagree. I'm in the US but I can't believe the UK is any different given global demand. The 405 is currently not depreciating whereas we have just sold a mint 2012 322 S/C with 3k miles on the clock for 20k below what it sold for new last year (obviously paid somewhat less than that for it in trade..). We can't buy used 405's because they are currently selling at a premium over new. That will not continue forever but it may for some time. Since I delivered the first new 405 on Christmas Eve last year we have not had a single car in stock and are currently quoting delivery dates well into next year. Many dealers are quoting even longer. My understanding is that the UK is in the same boat. A new 405 purchased in Dec '12 has probably been the best motoring investment anyone could have made. I also don't understand the "20-25k" price difference. A jammed out 322 S/C was $105k and a similarly equipped 405 S/C is $110k here. Mot dealers here had sold out of 322's before the 405's arrived so there was very little discounting.
Unrepentant, you raised a number of points:
- The reason the L405 is not depreciating at normal rates yet is because it is a new model in its first year and the dealers are controlling the price of used 405's. If I sold my slightly used 405 back to my dealer I would take a depreciation loss, probably £5k-£10k, and the dealer would list it at the new price because the market is allowing them to do this presently. This allows the dealers such as yourself to falsely claim the 405 is a good 'investment' which is not the case for any vehicle over a period of time.
The same depreciation effect occurred with the Evoque in the first year. However, if I sold my wife's 2 year old Evoque now I'm pretty sure it would show a normal depreciation curve. The same will be the case for the 405 in a years' time, except the £'s will be much larger because of the price hike between the 322 and 405.
- With respect to the price differentiation, my MY11 Vogue SE with a few options cost circa. £75k new, for me to replace it with a equivalent 405 it would be circa. £95k. I think you dealers are going to find that demand slows for the 405 when your 322 customers come to replace their RR's in the next couple of years and realise they are going to have to spend an extra £20k on and above the ''normal' cost to upgrade, and then realise the implication that the £'s of depreciation their 'investment' will incur over the next couple of years will be higher than previous
- The reason the L405 is not depreciating at normal rates yet is because it is a new model in its first year and the dealers are controlling the price of used 405's. If I sold my slightly used 405 back to my dealer I would take a depreciation loss, probably £5k-£10k, and the dealer would list it at the new price because the market is allowing them to do this presently. This allows the dealers such as yourself to falsely claim the 405 is a good 'investment' which is not the case for any vehicle over a period of time.
The same depreciation effect occurred with the Evoque in the first year. However, if I sold my wife's 2 year old Evoque now I'm pretty sure it would show a normal depreciation curve. The same will be the case for the 405 in a years' time, except the £'s will be much larger because of the price hike between the 322 and 405.
- With respect to the price differentiation, my MY11 Vogue SE with a few options cost circa. £75k new, for me to replace it with a equivalent 405 it would be circa. £95k. I think you dealers are going to find that demand slows for the 405 when your 322 customers come to replace their RR's in the next couple of years and realise they are going to have to spend an extra £20k on and above the ''normal' cost to upgrade, and then realise the implication that the £'s of depreciation their 'investment' will incur over the next couple of years will be higher than previous
Phil. said:
I think you dealers are going to find that demand slows for the 405 when your 322 customers come to replace their RR's in the next couple of years and realise they are going to have to spend an extra £20k on and above the ''normal' cost to upgrade
If you'd bought at launch you could be on your second L405 now for little outlay, but it can't last forever. No question re existing customers - 11-plate Vogue, 10k miles - trade-in value against an SDV8 Vogue - £40k, minus £500 per month until delivery ...Suspect they will try very carefully to manage supply and overseas demand (from the Chinese, Russians, Azerbaijani pimps etc. McGovern had in mind when designing the L405) will no-doubt remain strong.
NomduJour said:
Suspect they will try very carefully to manage supply and overseas demand (from the Chinese, Russians, Azerbaijani pimps etc. McGovern had in mind when designing the L405) will no-doubt remain strong.
I hope so because I will be in the market for one in the next year or so 
Phil. said:
Unrepentant, you raised a number of points:
- The reason the L405 is not depreciating at normal rates yet is because it is a new model in its first year and the dealers are controlling the price of used 405's. If I sold my slightly used 405 back to my dealer I would take a depreciation loss, probably £5k-£10k, and the dealer would list it at the new price because the market is allowing them to do this presently. This allows the dealers such as yourself to falsely claim the 405 is a good 'investment' which is not the case for any vehicle over a period of time.
Au contraire. We can't buy used 405's, haven't had a single one. Can't buy them because the market for a used one is higher than the MSRP for a new one! Some dealers here charge a $10k or even $20k premium for a new FFRR or a Sport. We don't do that although we do sell them all at full sticker. Of course the car will depreciate eventually but it will be glacial for a while simply because demand outstrips supply by a wide margin. FYI we're still selling Evoques for sticker and yesterday I sold a used 12 Prestige with 18k miles on it for 89% of it's original MSRP. Can't wait for Defender! - The reason the L405 is not depreciating at normal rates yet is because it is a new model in its first year and the dealers are controlling the price of used 405's. If I sold my slightly used 405 back to my dealer I would take a depreciation loss, probably £5k-£10k, and the dealer would list it at the new price because the market is allowing them to do this presently. This allows the dealers such as yourself to falsely claim the 405 is a good 'investment' which is not the case for any vehicle over a period of time.
Phil. said:
With respect to the price differentiation, my MY11 Vogue SE with a few options cost circa. £75k new, for me to replace it with a equivalent 405 it would be circa. £95k. I think you dealers are going to find that demand slows for the 405 when your 322 customers come to replace their RR's in the next couple of years and realise they are going to have to spend an extra £20k on and above the ''normal' cost to upgrade, and then realise the implication that the £'s of depreciation their 'investment' will incur over the next couple of years will be higher than previous
Like I said, here the price diff is $5-10k like for like. You have to remember the 405 has options not available on the 322 like soft door close, rear cross traffic detection, massage seats etc.. Most of the early adopters jammed their cars out so the average price is higher than in a normal market. As for sticker shock, it's not happening. We have had the best selection of used RR's and Sports over the past months because so many of our current customers have replaced their old cars with new ones. Unrepentant
It Appears the US and UK markets differ considerably because Evoques depreciate in the UK and the L405 is a massive price hike over the 322. Just look at UK dealer web sites and the big price gap between the used 322 and 405's is clear to see. The number of used 405's is growing at UK dealers so I predict the depreciation will start fairly soon over here. I'll be watching the used prices in the New Year
As for the difference between the US and UK markets, it's the same for technology, the UK always has to put up with the Dollar price in Pounds, so why should LR differ from Apple in their pricing strategy
It Appears the US and UK markets differ considerably because Evoques depreciate in the UK and the L405 is a massive price hike over the 322. Just look at UK dealer web sites and the big price gap between the used 322 and 405's is clear to see. The number of used 405's is growing at UK dealers so I predict the depreciation will start fairly soon over here. I'll be watching the used prices in the New Year
As for the difference between the US and UK markets, it's the same for technology, the UK always has to put up with the Dollar price in Pounds, so why should LR differ from Apple in their pricing strategy
Their both good, obviously the 405 drives better and is more modern but a late L322 is still a great place to be and has the advantage of being cheaper to purchase and likely slower to depreciate as the new model is already out, personally I think I would go for the new Sport if I was buying new.
I wanted to resurrect this thread 12 months on, to see if opinions have changed?
I am in the same dilemma currently, £42-45k buys you a 3yr old 4.4 TDV8 L322 with low miles and heavy specification, or £75k for an entry L405 with just a few choice options (obviously in Vogue specification). Interesting as predicted earlier in this thread late model L322's are still holding value very well.
As a comparison as PCP quotes on these 2 vehicles I have had the following as total cost of ownership (just assuming you handed it back)
L405 (Vogue @ £73k)
22k deposit
23k payments over 35months
GFV @ 37k (36k miles max)
TCO over 3yrs = £45k (does not include residuals)
L322 (Westminster @ £44k)
15k deposit
£15k payments over 35months
GFV @ 20k (36k miles max)
TCO over 3yrs = £30k (does not include residuals)
L405 values are holding strong currently (can't see any under £60k at 2yrs old) however I think that will change in 3yrs time, we are already starting to see discounts appear on new L405 so I think the market will soften. I think in the example above you may be looking at a PX value of around £45-50k on the L405 if you lucky so the TCO may drop by around £10k. With the L322 I think it will be worth more that the £20k quoted (difficult to get values as the facelift and 4.4 are not that old), but I expect you will loose just as much of your deposit as with the L405.
If you factor in the extra cost of servicing on the L322 and consumables (L405 can have a service pack), fuel economy etc, the gap starts to narrow. I think the difference between these cars in TCO over 3yrs (using these examples) would be no more than £10k....thoughts?
I am in the same dilemma currently, £42-45k buys you a 3yr old 4.4 TDV8 L322 with low miles and heavy specification, or £75k for an entry L405 with just a few choice options (obviously in Vogue specification). Interesting as predicted earlier in this thread late model L322's are still holding value very well.
As a comparison as PCP quotes on these 2 vehicles I have had the following as total cost of ownership (just assuming you handed it back)
L405 (Vogue @ £73k)
22k deposit
23k payments over 35months
GFV @ 37k (36k miles max)
TCO over 3yrs = £45k (does not include residuals)
L322 (Westminster @ £44k)
15k deposit
£15k payments over 35months
GFV @ 20k (36k miles max)
TCO over 3yrs = £30k (does not include residuals)
L405 values are holding strong currently (can't see any under £60k at 2yrs old) however I think that will change in 3yrs time, we are already starting to see discounts appear on new L405 so I think the market will soften. I think in the example above you may be looking at a PX value of around £45-50k on the L405 if you lucky so the TCO may drop by around £10k. With the L322 I think it will be worth more that the £20k quoted (difficult to get values as the facelift and 4.4 are not that old), but I expect you will loose just as much of your deposit as with the L405.
If you factor in the extra cost of servicing on the L322 and consumables (L405 can have a service pack), fuel economy etc, the gap starts to narrow. I think the difference between these cars in TCO over 3yrs (using these examples) would be no more than £10k....thoughts?
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