Discussion
I consider myself fairly knowledgeable when it comes to buying and selling cars. I hate losing money and therefore make it a rule not to. Therefore I always buy used (well excepting an R26.R I bought new and sold for a profit) always pay cash and always buy something a bit niche that has strong residuals. I tend to stay away from certain brands purely for this reason.
The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
A lot of it is to do with the badge, as you said. For example, a £31k Volvo V70 will depreciate faster than a £31k Mercedes E-class estate, despite being a much higher spec, simply because of the fact that it is a Volvo. The reason that cars like Fords depreciate so quickly is partly this and partly the fact that there is so many out there that the competition is massive; whereas there are fewer premium cars out there, so prices are buoyed by the smaller competition.
supply and demand, but what influences the demand could be the reputation, the badge, etc.... Conversely, the supply could be too great. In my time in the trade, a manufacturer chasing volume (eg Jag/Volvo/Saab) has a catastrophic effect on residuals. The discounting kills them. Those 25k saabs that people pay 17k for... How much then, realistically, can you expect to sell a 6 month old one for? 15k? and a 2 yr old one? and so on...
chrisispringles said:
A lot of it is to do with the badge, as you said. For example, a £31k Volvo V70 will depreciate faster than a £31k Mercedes E-class estate, despite being a much higher spec, simply because of the fact that it is a Volvo. The reason that cars like Fords depreciate so quickly is partly this and partly the fact that there is so many out there that the competition is massive; whereas there are fewer premium cars out there, so prices are buoyed by the smaller competition.
Yeh theres masses of fords out there but you count how many minis you see on the road then go and look how little they depreciate.tyranical said:
chrisispringles said:
A lot of it is to do with the badge, as you said. For example, a £31k Volvo V70 will depreciate faster than a £31k Mercedes E-class estate, despite being a much higher spec, simply because of the fact that it is a Volvo. The reason that cars like Fords depreciate so quickly is partly this and partly the fact that there is so many out there that the competition is massive; whereas there are fewer premium cars out there, so prices are buoyed by the smaller competition.
Yeh theres masses of fords out there but you count how many minis you see on the road then go and look how little they depreciate.Consider the mondaeo and 3 series.
Historically the ford was the comp car and the thre was the desirable top end of that ilk of car.
Now the biggest selling volume in that sector is what .... The three series. But it's the ford that retains a mere 30% of it's value after 3 years whereas te BMW is 50%+. Why??
I'd put it partly down to history partly down to the fact that for ford that's top of the range whereas until the 1 series that's the bottom of the range ie Many higher models halo products do desire.
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
Rwd also a rare aspect to a car below the £30k level apart from BMW.
I'd personally not touch French unless it's a T16 or an Alpina turbo whereas german cars I'd struggle to say I wouldn't choose x car due to poor build or reliability.
Italian cars different ball game - I've already had the joy of a fiat coupe 20vt and it was for me an icon of reliability could have been lucky but I'll never forget that experiance. Not sure I'll ever have one again as I have yet to buy the same car too many to want to own in my lifetime.
Historically the ford was the comp car and the thre was the desirable top end of that ilk of car.
Now the biggest selling volume in that sector is what .... The three series. But it's the ford that retains a mere 30% of it's value after 3 years whereas te BMW is 50%+. Why??
I'd put it partly down to history partly down to the fact that for ford that's top of the range whereas until the 1 series that's the bottom of the range ie Many higher models halo products do desire.
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
Rwd also a rare aspect to a car below the £30k level apart from BMW.
I'd personally not touch French unless it's a T16 or an Alpina turbo whereas german cars I'd struggle to say I wouldn't choose x car due to poor build or reliability.
Italian cars different ball game - I've already had the joy of a fiat coupe 20vt and it was for me an icon of reliability could have been lucky but I'll never forget that experiance. Not sure I'll ever have one again as I have yet to buy the same car too many to want to own in my lifetime.
Welshbeef said:
Consider the mondaeo and 3 series.
Historically the ford was the comp car and the thre was the desirable top end of that ilk of car.
Now the biggest selling volume in that sector is what .... The three series. But it's the ford that retains a mere 30% of it's value after 3 years whereas te BMW is 50%+. Why??
I'd put it partly down to history partly down to the fact that for ford that's top of the range whereas until the 1 series that's the bottom of the range ie Many higher models halo products do desire.
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
Rwd also a rare aspect to a car below the £30k level apart from BMW.
I'd personally not touch French unless it's a T16 or an Alpina turbo whereas german cars I'd struggle to say I wouldn't choose x car due to poor build or reliability.
Italian cars different ball game - I've already had the joy of a fiat coupe 20vt and it was for me an icon of reliability could have been lucky but I'll never forget that experiance. Not sure I'll ever have one again as I have yet to buy the same car too many to want to own in my lifetime.
Welcome to alcohol and the mid 90s. Historically the ford was the comp car and the thre was the desirable top end of that ilk of car.
Now the biggest selling volume in that sector is what .... The three series. But it's the ford that retains a mere 30% of it's value after 3 years whereas te BMW is 50%+. Why??
I'd put it partly down to history partly down to the fact that for ford that's top of the range whereas until the 1 series that's the bottom of the range ie Many higher models halo products do desire.
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
Rwd also a rare aspect to a car below the £30k level apart from BMW.
I'd personally not touch French unless it's a T16 or an Alpina turbo whereas german cars I'd struggle to say I wouldn't choose x car due to poor build or reliability.
Italian cars different ball game - I've already had the joy of a fiat coupe 20vt and it was for me an icon of reliability could have been lucky but I'll never forget that experiance. Not sure I'll ever have one again as I have yet to buy the same car too many to want to own in my lifetime.
Depreciation is all about actual money & not percentages, plus German motors don't quite have the cloak of reliability superiority they once had.
ClintonB said:
Welcome to alcohol and the mid 90s.
Depreciation is all about actual money & not percentages, plus German motors don't quite have the cloak of reliability superiority they once had.
but the fact is people in their 30's and older grew up with the fact german cars were highly reliable whereas British Italian American and French were not. Depreciation is all about actual money & not percentages, plus German motors don't quite have the cloak of reliability superiority they once had.
I agree with the fact it's actual £'s lost in depecration of course it does but there is nothing more desirable in a ford mondaeo over a three series, a vectra is s
t a Saab 93 crap, Honda accord interesting , alfa romaeo 159 pretty but build diabolical from my experiance, c class sport nice but not as good as a BMW. Welshbeef said:
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
The beauty of this percieved lower quality, is thankfully reflected in lower purchase prices, and allows people to buy good cars like the Mondeo/Focus for less than the equivalent 3 series. Long may it continue.
In my mind it is simply two things:
Supply and demand.
Discount given when new.
One tends to lead to the other therefore most 'volume' cars you can get 20% of list with out too much trouble. Some vastly more. So any depreciation figures based on list rather than transaction price are automatically at a (unfair) disadvantage.
Supply and demand.
Discount given when new.
One tends to lead to the other therefore most 'volume' cars you can get 20% of list with out too much trouble. Some vastly more. So any depreciation figures based on list rather than transaction price are automatically at a (unfair) disadvantage.
Pig Skill said:
I consider myself fairly knowledgeable when it comes to buying and selling cars. I hate losing money and therefore make it a rule not to. Therefore I always buy used (well excepting an R26.R I bought new and sold for a profit) always pay cash and always buy something a bit niche that has strong residuals. I tend to stay away from certain brands purely for this reason.
The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
You've answered your own question there.The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
waterwonder said:
In my mind it is simply two things:
Supply and demand.
Discount given when new.
One tends to lead to the other therefore most 'volume' cars you can get 20% of list with out too much trouble. Some vastly more. So any depreciation figures based on list rather than transaction price are automatically at a (unfair) disadvantage.
but there in lies the problem they are losing out on co car drivers as the list price isn't really what people pay but your charged cp car tax on it plus their higher co2 emmittiing engines mean 3 series is much cheaper to co car tax and also to lease for the companies due to it's residual values. Supply and demand.
Discount given when new.
One tends to lead to the other therefore most 'volume' cars you can get 20% of list with out too much trouble. Some vastly more. So any depreciation figures based on list rather than transaction price are automatically at a (unfair) disadvantage.
I've had a mondaeo st tdci mk4 fuly loaded and electric recaro leather seats loved it great handling - but without question the three series handles like it's on rails leagues better than the mondaeo.
Also the I6 is notably better than the mondaeo 2.2ltr 155bhp even with it's overboost giving it 300ftlbf for 20seconds under throttle wide open situations.
It's boot front and rear space was miles bigger than the three in fact it's size is more 5 series.
Still annoyed mine was stolen but I'm glad we had a 6 month relationship together. I'd have another
Welshbeef said:
ClintonB said:
Welcome to alcohol and the mid 90s.
Depreciation is all about actual money & not percentages, plus German motors don't quite have the cloak of reliability superiority they once had.
but the fact is people in their 30's and older grew up with the fact german cars were highly reliable whereas British Italian American and French were not. Depreciation is all about actual money & not percentages, plus German motors don't quite have the cloak of reliability superiority they once had.
I agree with the fact it's actual £'s lost in depecration of course it does but there is nothing more desirable in a ford mondaeo over a three series, a vectra is s
t a Saab 93 crap, Honda accord interesting , alfa romaeo 159 pretty but build diabolical from my experiance, c class sport nice but not as good as a BMW. often cast from granite, but that hasn't been relevant for some time. MB for one were even moved to go into print in a broadsheet to admit they'd become really rather rubbish and then do a big marketing exercise on how things were going to get better (which they probably have, on the face of it - I've no idea if reality now backs up those claims).
Anyone any older probably grew up with casual (and not so casual) racism, but that doesn't make it any more relevant to the here & now. As an example, when you can't buy a 40k BMW without a cast iron warranty but can buy a Ford at half the price or less and not worry, you know that things ain't what they used to be. Whether or not you still want the BM is something different and into the realms of value judgement.
Most people making this choice do so with the protection of a company car policy. I wonder if the same choices would be made if the decision involved own real Queen's pounds?
Great Pretender said:
You've answered your own question there.
I know cars in general or most material objects that are re-saleable do depreciate and the biggest influencing factor is the old economic proof of supply and demand.I suppose, for want of a better initial post, was trying to differentiate between car marques and specific models. For example EVO really rate the Insignia VXR as a drivers car. Supply is not excessive and there is not a glut of them flooding the roads, but bet you mother that soon enough they will be dirt cheap used. The Jag XF 3.0d sport — great luxury barge and contending for best in class — values sinking like the titanic. Why?
I think that perceived value, image and perhaps snobbery all elevate the german brands. Don't get me wrong I'm a huge BMW fan and the wife runs a nice Beemer that is a great steer. I am just always baffled why seemingly good cars are financial lead balloons on paper.
Welshbeef said:
The other thing is reliability german cars have always been highly reliable and are designed to run on autobhans hour after hour at full speed fords are not.
All cars sold in Europe have to be able to run at V-max on the Autobhan. It is something to do with type approval, which is why Ford didn't officially import the Mustang, because it couldn't keep cool flat out for long periods. So I was told by an "industry insider" Normal people who want normal cars, who don't 'know' much about cars, will tend to buy newer cars because they are a safer bet, generally, than older ones.
Old cheap 'normal' cars are bought by people who can't afford better, and they will buy to their budget more or less, so they won't push prices up, only ever drag them down.
Ideally you want a car that will always appeal to people who want the specific car you are selling, and are happy to let money be more of a secondary consideration to them than the people just wanting an A to B car.
Vauxhall cars depreciate badly, BUT, look at the VX220 Turbo. It's held it's value so well. Anyone who had one for around £14,000 four years ago, would probably be looking at selling today with half average miles per annum, for maybe £12,500 - £13,000. Not bad for a Vauxhall.
That said, the rare and sporty Z4 MC BMW, new was £48,000 iirc, and now you can get one for about £18,000, so that has nicely followed a 20% per annum curve. Yikes for a sporty rare BMW that isn't a big barge either!
993 Turbo Porsche, seem to be going up in value now! You might have owned one almost for free total running cost wise, vs a weekend use Cayman or something!
Do BMW's really hold their value better than most other cars these days? Too popular to hold their values these days? BMW M cars might not, the normal diesels probably don't either. Then you really need to consider total running costs as cars get older. Some cars have horrible faults that can empty your pockets rather quickly!
The 2009 slump in prices really did change the playing field for used cars. Maybe there is a bit more reality out there now credit is harder to come by, and fuel costs being so high might be making the fancier sportier cars look a bit less tempting for those borderline buyers too!?
The alternative is to buy and sell any car within maybe 4-6 months. Try find cheap cars from desperate sellers, or make them more desirable with quick easy fixes etc, and then sell on later. A friend of mine managed to own cars for a few years and make money on them all (almost made his cost of motoring just fuel only) which was pretty good, but it was a lot of time/effort!
Dave
Old cheap 'normal' cars are bought by people who can't afford better, and they will buy to their budget more or less, so they won't push prices up, only ever drag them down.
Ideally you want a car that will always appeal to people who want the specific car you are selling, and are happy to let money be more of a secondary consideration to them than the people just wanting an A to B car.
Vauxhall cars depreciate badly, BUT, look at the VX220 Turbo. It's held it's value so well. Anyone who had one for around £14,000 four years ago, would probably be looking at selling today with half average miles per annum, for maybe £12,500 - £13,000. Not bad for a Vauxhall.
That said, the rare and sporty Z4 MC BMW, new was £48,000 iirc, and now you can get one for about £18,000, so that has nicely followed a 20% per annum curve. Yikes for a sporty rare BMW that isn't a big barge either!
993 Turbo Porsche, seem to be going up in value now! You might have owned one almost for free total running cost wise, vs a weekend use Cayman or something!
Do BMW's really hold their value better than most other cars these days? Too popular to hold their values these days? BMW M cars might not, the normal diesels probably don't either. Then you really need to consider total running costs as cars get older. Some cars have horrible faults that can empty your pockets rather quickly!
The 2009 slump in prices really did change the playing field for used cars. Maybe there is a bit more reality out there now credit is harder to come by, and fuel costs being so high might be making the fancier sportier cars look a bit less tempting for those borderline buyers too!?
The alternative is to buy and sell any car within maybe 4-6 months. Try find cheap cars from desperate sellers, or make them more desirable with quick easy fixes etc, and then sell on later. A friend of mine managed to own cars for a few years and make money on them all (almost made his cost of motoring just fuel only) which was pretty good, but it was a lot of time/effort!
Dave
Pig Skill said:
I consider myself fairly knowledgeable when it comes to buying and selling cars. I hate losing money and therefore make it a rule not to. Therefore I always buy used (well excepting an R26.R I bought new and sold for a profit) always pay cash and always buy something a bit niche that has strong residuals. I tend to stay away from certain brands purely for this reason.
The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
The simple answer is:The point I am leading to is this — why do some cars, no matter how good and no matter how much critical acclaim gained, lose money big time. For example; fast Vauxhalls, most French cars and Fords tend to get battered, whereas cars of Germanic seasoning tend to fare far better!?
Is it simply supply and demand or do past reputations for reliability and tin worm (read Fiat) still influence people? Something else perhaps...?
Hmmmmmm
The vary vast majority of people are unable to think for themselves so simply follow either what they are told to follow or what they 'perceive' is the thing to follow.
This means good is often overlooked and crap is often polished.
The dynamics of the new car market have changed considerably since the recession began in 2008. With private buyers gone or very few on the ground, the market has been held up in the last couple of years by the fleet purchasers. The fleet managers want good residuals after 2-3 years when the car goes to auction. Hence the auction houses are now seeing lines of off fleet Audi's BMW etc going through the auction and been bought up by your local used car dealer.
Therefore the used market may start to be oversupplied with BMW 1 and Audi A3 etc but finding a late Mondeo maybe more difficult.
Therefore the used market may start to be oversupplied with BMW 1 and Audi A3 etc but finding a late Mondeo maybe more difficult.
There are over 2000 BMW E90 3 series' in the classifieds at the moment, but they don't appear to be suffering from depreciation too much, yet so many are for sale 
The logic of a poster above who said that when fewer are around, they cost more doesn't really work. Must be the badge... weird one.
The logic of a poster above who said that when fewer are around, they cost more doesn't really work. Must be the badge... weird one.
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