RE: Car depreciation revealed
Discussion
A Caterham is possibly the best new car for avoiding depreciation.
Examples from the 1980s in good condition are still commanding their list price, as do mint condition models from just about any year. Perhaps the Ford X Flow engined cars are a little cheaper now, but K series cars are still very strong. The best cars in this survey still lose 30%!
I guess that they have only looked at the most dull ordinary cars on sale, none of the more interesting ones that might cost you alot, like Ferraris which with any kind of mileage drop hugely in value, as do big Mercedes' like the CL.
Examples from the 1980s in good condition are still commanding their list price, as do mint condition models from just about any year. Perhaps the Ford X Flow engined cars are a little cheaper now, but K series cars are still very strong. The best cars in this survey still lose 30%!
I guess that they have only looked at the most dull ordinary cars on sale, none of the more interesting ones that might cost you alot, like Ferraris which with any kind of mileage drop hugely in value, as do big Mercedes' like the CL.
"...take a porsche for example or a Lotus both these cars need 6 or 7k of extras when you buy the car which you never get back but have to have them to be able to sell the car."
I once bought a second-hand Porsche [1978 930 Turbo] in 1984 and sold it 4 years later for 40% more than I'd paid. Mind you I had help from the standard OZ "Labor Party" economic policy** under Paul Keating. Every Labor government over here overspends, creates inflation, then tries to control it by jacking up interest rates until borrowing is costing 17% or more. Then property and business investment is a poor prospect and people in business buy tax deductions instead!
Mind you I bought a new 968CS a few years later and did quite well by pointing out I was looking at other European vehicles as well - I drove up in a Jaguar XK coupe I had been lent for the afternoon as a test drive. [I was trading in a Maserati 222E.]
** Gough Whitlam did it in the 1970s and Bob Hawke/Paul Keating in the 1980s. That's why John Howard keeps winning - no one wants to risk not being able to pay for their mortgage in a country where home ownership is considered fundamental to life.
How are Labour economics in the UK? [I think in the UK they spell it right.]
I once bought a second-hand Porsche [1978 930 Turbo] in 1984 and sold it 4 years later for 40% more than I'd paid. Mind you I had help from the standard OZ "Labor Party" economic policy** under Paul Keating. Every Labor government over here overspends, creates inflation, then tries to control it by jacking up interest rates until borrowing is costing 17% or more. Then property and business investment is a poor prospect and people in business buy tax deductions instead!
Mind you I bought a new 968CS a few years later and did quite well by pointing out I was looking at other European vehicles as well - I drove up in a Jaguar XK coupe I had been lent for the afternoon as a test drive. [I was trading in a Maserati 222E.]
** Gough Whitlam did it in the 1970s and Bob Hawke/Paul Keating in the 1980s. That's why John Howard keeps winning - no one wants to risk not being able to pay for their mortgage in a country where home ownership is considered fundamental to life.
How are Labour economics in the UK? [I think in the UK they spell it right.]
I was wondering how valid these stats really are, are they using realistic values that have been discounted and the price shown what the majority of customers will pay, or are they using list prices, which usually dont mean much. For example, the citroen, I am pretty sure they slash thousands off the prices.
Psyer is right - extras can make a huge difference as the residual values are normally quoted as a percentage of the basic new price. I have been looking at buying a 5 series BMW which on paper has great residuals but after spending another £6K for phone & satnav etc! On the other hand I can buy an XJ8 Soverign with a good discount and everything included.
I think the Jag's value will hold up better than the BMW.
I think the Jag's value will hold up better than the BMW.
I'm feeling a bit smug on this one. Have always found new cars unreliable (and horrendously expensive), and don't really like new cars much these days anyway. Got two cars, one 16 years old, the other 23. And get stunning 200bhp/ton performance and fun/predictable handling out of both. (Paid £5k for the pair......) If I ever do sell 'em, I'll probably get more than I paid, and if not, who cares?
Still, each to their own. I'm so glad so many like to have the newest bestest model. It keeps cheap motoring fun available for the rest of us!
Al
Still, each to their own. I'm so glad so many like to have the newest bestest model. It keeps cheap motoring fun available for the rest of us!
Al
Now the real issue must be how much a car depreciates after you buy it -new or second hand - this needs to be done graphically, can you produce graphs for this instead?
I agree with the comment on RRP and actual price - I paid £11k for an 11 month old Vectra elite, the RRP was £21k. My depreciation over 2 years will be nothing like the new price depreciation over 3 years. We need graphs!!
I agree with the comment on RRP and actual price - I paid £11k for an 11 month old Vectra elite, the RRP was £21k. My depreciation over 2 years will be nothing like the new price depreciation over 3 years. We need graphs!!
These stats are misleading. You're supposed to take into account the replacement value of the car when working out depreciation. So if a car costs £10,000 3 years ago, is now worth £6000, and the current 2007 model is £14,000... etc etc. On that note it'd have lost ££8000, or 80%. Whereas they make it look like it's 'only' 40%. Amateurs.
vtecblack said:
and don't forget - 17.5% gets lopped off the value the minute it leaves the forecourt!
Err, noI'm suprised how many people make this mistake. I think many car salemen use this trick at trade in time to con people into thinking their car is worth less. As an example, you buy a car at £11,750 (of which $1750 is VAT). At trade in, you're told the car was £10,000 ex VAT when new therefore the trade in price must reflect this.
This is completely wrong. VAT is VALUE ADDED TAX. It has nothing to do with whether the item is new or not, or who it was bought from. The business is adding VALUE to the product by cleaning it, fixing defects and providing a warrenty. Any second hand car you buy will also have a VAT element
See here for how it works:
http://www.dragon2000.co.uk/support/Q10003.htm
alock said:
vtecblack said:
and don't forget - 17.5% gets lopped off the value the minute it leaves the forecourt!
Err, noI'm suprised how many people make this mistake. I think many car salemen use this trick at trade in time to con people into thinking their car is worth less. As an example, you buy a car at £11,750 (of which $1750 is VAT). At trade in, you're told the car was £10,000 ex VAT when new therefore the trade in price must reflect this.
This is completely wrong. VAT is VALUE ADDED TAX. It has nothing to do with whether the item is new or not, or who it was bought from. The business is adding VALUE to the product by cleaning it, fixing defects and providing a warrenty. Any second hand car you buy will also have a VAT element
See here for how it works:
http://www.dragon2000.co.uk/support/Q10003.htm
Who bloody cares? Did you expect to make money on it? Anyway, I think that its a good thing because it lets us poorer folk wait the short period until the depreciation has hit and acquire nice cars for a lot less. Also I'm sure the good old car manufacturers are speccing up cars and registering them then selling them as secondhand. Every cloud has a silver lining eh?
Andrew Noakes said:
Nice story, but 'Wisebuyers' figures are nonsense because they're based on retail prices. Bet most people buying an Omega new got a whacking great discount, so the real cost of depreciation isn't as much as it looks.
Most of it is down to the number of Omega's that arrive 2-3yrs old in the auctions, in white, with a few holes in them, and a "just run-in engine (130K miles)"Take a £30K MV6 (list price), 3yrs old, = £1800 at the auction.
Now that will affect the average depreciation of the model. In fact, no, it slaughters it.
I'm so glad I own a white MV6 estate, purchased from an auction....
Where else will you get a 150mph barge, less than 3yrs old, for under £2k, with full service history, worn out seats, some of the trim hanging off, but mechanically very very good.
Mine's just clocking up 200,000 miles, and when it dies, I don't care. I'll scrap it, and get another one. I've had six years out of it, and only had to service it, and one battery. I fitted a LPG conversion to it, so it's cheap as chips to run!
And still will pull 150 (not on public roads in the UK of course!)
Cars that depreciate on their own merit, well that's another story.
That'll be the Daewoo then. (and you wonder why they re-launched a Chevy in Europe!)
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