De bunking the depreciation myth
Discussion
Many consider that German, premium brands (Mercedes, Audi, BMW) depreciate at a lower rate than other more mainstream brands such as Ford, Vauxhall, Citroen.
But, is this actually the case. Bearing in mind that not many cars are bought at full list and probably most have expensive options added is the difference as marked as the premium brands would have you believe when measured in cash not % terms.
It strikes me that it's not that clear cut when I browse the classifieds.
But, is this actually the case. Bearing in mind that not many cars are bought at full list and probably most have expensive options added is the difference as marked as the premium brands would have you believe when measured in cash not % terms.
It strikes me that it's not that clear cut when I browse the classifieds.
Some of us don't even look at depreciation when considering a car. I certainly don't. If a BMW/Merc depreciates the same as a Ford/Toyota I would still find myself in a BMW/Merc simply because, to me, it is a nicer place to be and I prefer the drive. I'm happy to pay more for that experience.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
Coolbanana said:
Some of us don't even look at depreciation when considering a car. I certainly don't. If a BMW/Merc depreciates the same as a Ford/Toyota I would still find myself in a BMW/Merc simply because, to me, it is a nicer place to be and I prefer the drive. I'm happy to pay more for that experience.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
I know what you mean, for most people the cost is part of the buying decison, I think sometimes too much of the decision, i.e. agonizing over a couple of MPG or a VED band or two higher when spending 25 grand on a car.I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
I think with depreciation, regardless of brand, its what you buy that has the biggest impact, buy a 5 series GT Petrol, with a big engine, purchase a challenging color/trim combo and then festoon liberally with twenty grands worth of options then, come resale time you are in for a bit of a loss. Buy a diesel Fiesta in a decent colour in a desirable spec and it will be worth a decent percetage of new price after the same period.
Anytime anyone mentions jaguar one of the first things people say is it will be worth £10 in 3 years.
Not the case for me, I bought a used xfr recently. It's now over a year in my ownership and prices have not dropped at all. Mine is fully loaded and there is a basic spec for 1k less and loaded ones for more than what I paid.
As with my bmws I did my research, bought well and they didn't do too bad. Having said that my 335d lost nearly 1.6 k per year and it was 3 when I bought it.
So on that basis the jag is far out performing the BMW.
New is different.
Not the case for me, I bought a used xfr recently. It's now over a year in my ownership and prices have not dropped at all. Mine is fully loaded and there is a basic spec for 1k less and loaded ones for more than what I paid.
As with my bmws I did my research, bought well and they didn't do too bad. Having said that my 335d lost nearly 1.6 k per year and it was 3 when I bought it.
So on that basis the jag is far out performing the BMW.
New is different.
Coolbanana said:
Some of us don't even look at depreciation when considering a car. I certainly don't. If a BMW/Merc depreciates the same as a Ford/Toyota I would still find myself in a BMW/Merc simply because, to me, it is a nicer place to be and I prefer the drive. I'm happy to pay more for that experience.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
Well if thats true, why are you driving the cars in your profile, all look like head rather than heart purchases to me.I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
Lease deals are based on actual projected figures though. As in someone's job is to estimate the value of the car at the end of the lease period and provide a monthly figure that will still give the leasing company a profit taking into account the depreciation of the car over the lease figure. Not sure what the current deals are like but a few years ago some Mercedes and BMW in a popular specification were cheaper to lease than cheaper Ford, Vauxhall or whatever same sector offerings.
It's true about options, I know someone who bought a year old petrol Mercedes C class something with AMG wheels and kit for £20,000 which had done 4,000 miles, they had the same specced car brand new in the showroom of the dealer for £36,000. But the model had been replaced by a new version which muddies things a bit.
It's true about options, I know someone who bought a year old petrol Mercedes C class something with AMG wheels and kit for £20,000 which had done 4,000 miles, they had the same specced car brand new in the showroom of the dealer for £36,000. But the model had been replaced by a new version which muddies things a bit.
IMO depreciation by model is at least as significant as depreciation by brand. And some newly launched models tend to hold some early value simply due to scarcity in the market.
There's also the question of which cars get the most money spent on "extras" which are never fully reflected in the used price. The Germans get a lot of this.
Show me a big executive car (any brand) which doesn't depreciate like a lead parachute and I'll be impressed!
There's also the question of which cars get the most money spent on "extras" which are never fully reflected in the used price. The Germans get a lot of this.
Show me a big executive car (any brand) which doesn't depreciate like a lead parachute and I'll be impressed!
julian64 said:
Coolbanana said:
Some of us don't even look at depreciation when considering a car. I certainly don't. If a BMW/Merc depreciates the same as a Ford/Toyota I would still find myself in a BMW/Merc simply because, to me, it is a nicer place to be and I prefer the drive. I'm happy to pay more for that experience.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
Well if thats true, why are you driving the cars in your profile, all look like head rather than heart purchases to me.I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
Indeed. If this was actually true he'd be driving a Volvo or Citroen C6.Coolbanana said:
Some of us don't even look at depreciation when considering a car. I certainly don't. If a BMW/Merc depreciates the same as a Ford/Toyota I would still find myself in a BMW/Merc simply because, to me, it is a nicer place to be and I prefer the drive. I'm happy to pay more for that experience.
I choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
This Exactly, but max ive ever spent on a car is around 4-5k on a used car however i could see depreciation being a factor especially when buying a car new or spending over 20k on a carI choose my cars based upon how much enjoyment I can get from them nowadays, not what they cost to run or will depreciate to.
bp1000 said:
Anytime anyone mentions jaguar one of the first things people say is it will be worth £10 in 3 years.
Not the case for me, I bought a used xfr recently. It's now over a year in my ownership and prices have not dropped at all. Mine is fully loaded and there is a basic spec for 1k less and loaded ones for more than what I paid.
As with my bmws I did my research, bought well and they didn't do too bad. Having said that my 335d lost nearly 1.6 k per year and it was 3 when I bought it.
So on that basis the jag is far out performing the BMW.
New is different.
How d'you manage that? The last 335d I had lost £3300 a year over five years. When I bought it at 2 years old it'd already lost £17k.Not the case for me, I bought a used xfr recently. It's now over a year in my ownership and prices have not dropped at all. Mine is fully loaded and there is a basic spec for 1k less and loaded ones for more than what I paid.
As with my bmws I did my research, bought well and they didn't do too bad. Having said that my 335d lost nearly 1.6 k per year and it was 3 when I bought it.
So on that basis the jag is far out performing the BMW.
New is different.
bp1000 said:
Anytime anyone mentions jaguar one of the first things people say is it will be worth £10 in 3 years.
Not the case for me, I bought a used xfr recently.
I think the general theme is that the first owner takes (even more of) the bulk of the depreciation hit. Given you bought used it's not surprising you're then not seeing considerable depreciation. Cars that depreciate fast usually do make great used buys.Not the case for me, I bought a used xfr recently.
The oddity to my mind, is that fact that people always seem to care about depreciation as a percentage. When comparing two cars it's the absolute depreciation that matters to me, as in how much it will lose in £ during my ownership; the proportion of its value that it loses is irrelevant.
Assuming I'll be keeping the car for over a year, I'd rather pay £3k for a car and have 100% depreciation per year, than 30k and have 10%.
Assuming I'll be keeping the car for over a year, I'd rather pay £3k for a car and have 100% depreciation per year, than 30k and have 10%.
As a general rule of thumb, all mainstream cars will be worth approx. 50% of their original cost after the first 3 years. This value at 3 years will drop by a further 50% over the next 3 years and so on.
Despite what the salespeople will tell you, extras on the car will be worth SFA after the first 3 years of ownership and even less thereafter, so be careful with the options list.
It is probably better,for this reason,to buy the lowliest model of a more expensive car range than the pimped out special from a less expensive manufacturer.
Despite what the salespeople will tell you, extras on the car will be worth SFA after the first 3 years of ownership and even less thereafter, so be careful with the options list.
It is probably better,for this reason,to buy the lowliest model of a more expensive car range than the pimped out special from a less expensive manufacturer.
Monty Python said:
How d'you manage that? The last 335d I had lost £3300 a year over five years. When I bought it at 2 years old it'd already lost £17k.
Mine was bought at two years old and 16k miles for £21.5k. Sold five and a half years later (January) in px for £9000 with a fraction under 60k on it. I was mildly "had" but I needed to move it on with minimal fuss.Monty Python said:
How d'you manage that? The last 335d I had lost £3300 a year over five years. When I bought it at 2 years old it'd already lost £17k.
Mine was bought at two years old and 16k miles for £21.5k. Sold five and a half years later (January) in px for £9000 with a fraction under 60k on it. I was mildly "had" but I needed to move it on with minimal fuss.So £2200 a year depreciation; right in the middle of yours and the other chap!
kambites said:
Assuming I'll be keeping the car for over a year, I'd rather pay £3k for a car and have 100% depreciation per year, than 30k and have 10%.
But you've just spent a year in a £3k shed rather than a nice £30k car...I get your point though, but I think most people do think in absolute terms rather than percentages.
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