Edmunds.com | Inside Line | Auto Observer Your Account | Help | Directory
You are here:
![[F]](http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com/media/townhall/webxicons/site.gif){kind=small}
Forums
Smart Shopper Smart Shopper-Archives Depreciation: Foreign vs Domestic Vehicles 
70 messages, Last post on Jul 24, 2007 at 9:30 AM
You are in the Smart Shopper-Archives Forum. Your Hosts are kirstie_h & tidester
| one other factor that look at is $ depreciation, not just %. Cheaper cars need to depreciate at a higher % rate. For example, if a new Hyundai is $10,000, if it depreciated 30% in 2 years, thats only 3K, not enough to make a difference. But, on a BMW that costs 40K, 30% is a 12K drop (mch more significant and noticable). | |
|
I think you all have valid points, here. The market for used cars changes over time, particularly for distinct types of vehicles. The economy, leasing, warranties and redesigns all have significant impact on the supply and demand for new and used cars. Comparing one time period or one vehicle type with another makes comparison very tricky. [My wife's experience with her VW Beetle proved that. This was a model that was "supposed" to hold its value like crazy, but by the time it had been out for four years - and her 2000 was two years old - the demand had been met and the used car values dropped like a rock.] On the other hand, it could be that the domestic makes appear to have more depreciation than they really do if you factor in actual selling prices after rebates. If you look at a percentage depreciation that is based on MSRP, it will be overstated for a GM, Ford or Dodge vehicle that sold at invoice less a factory-to-dealer incentive less a consumer rebate. After owning Fords, Hondas, Toyotas, Mazdas and a VW, I've come to the conclusion that ALL cars suck when it comes to losing value. Some are worse than others, though. |
|
|
.... ** The market for used cars changes over time, particularly for distinct types of vehicles. The economy, leasing, warranties and redesigns all have significant impact on the supply and demand for new and used cars. Comparing one time period or one vehicle type with another makes comparison very tricky. ** Bang.! .. right on the money.! .. great post, great example .. Terry. |
|
| dardson--I'm not an expert here, but 35% for 2 years on a Solara seems mighty steep. When you say "resale price" you mean market value and not trade-in value, right? | |
| My point is not to down-grade foreign makes; but a well equipped Honda Pilot lists for $31k+ and sells with maybe a $2k discount. A comparable Tahoe lists for $37k and discounts + rebates to very similar $. I'd bet two years from now they'll have similar wholesale numbers. Depreciation-wise the Chevy will look bad and the Honda will look great.....but the money's the same. | |
I'm talking trade-in numbers (all the numbers I mentioned were trade-in amounts). I was very surprised by the Solara. We traded it after 18 mo. for an 01 Lexus. During the process the sales manager (Lexus) pulled up the auction numbers (Manheim) on his computer and a loaded up '00 SLE V6 with every option with similar low miles was "all the money"  $19.5k. The car lised for $31.9k and bought for $29.5k. I double checked with the Real-World-Trade site here, and was told $19.5k was a deal I should grab.
|
|
|
...but the market for used cars over $20k might be pretty difficult... When you got $19,5, the store would want to see at least in he $21-22 range and "ask" $23,5... at that figure, a lot of people would go for the new car... esp. with the new model around the corner. I know I would, unless I knew how the car was treated. If you had done this in MI, the sales tax would have been $1800... that is gone immediately. I think you're talking pre-tax numbers, though. Figure a vehicle in that price range has "about" a $2,500 spread between wholesale and retail... the rest is what the car actually lost in value. You probably would not have been any better off had you bought a certified 2000 RX300 for the same money... and those hold their value like crazy. My point is, it's not so much the loss in value your fighting, it's the spread between wholesale and retail on a pricey vehicle, combined with short ownership. You would really be hurtin' had you tried this 18-month exercise with a Cougar, me thinks. Coupes are tough in any case. I'll take your 18-month old Tundra 35% behind street price, though! -Mathias |
|
|
|
|
you are still comparing a Full Size SUV to a Midsize SUV. Compare a Chevrolet Trailblazer to a Honda Pilot. I bought my Trailblazer for about 29k in (early)sept '01, Retail price was 31k. Traded in nov '02 for 21k. yup, thats a 30% hit in a year. Now they are worth about (guessing) 17-18. that's almost a 40% depreciation in the 2 years. Pilot, say invoice at 29k, you will be hard pressed to find a 2 year old one for less than 20k I would imagine. Of course, let's not forget that the 3k rebate on the Trailblazer came out after I bought it. Purchased sept 10, 2001. Which would probably also fit in with your timing on both cars. 'If' I had bought at the right time, I 'may' have lost only 20%(6k) but the rebates weren't being seen, and I am not a fortune teller. On the other hand, I bought my '03 Accord in Nov '02, for 20k and was offered 17,5 on a trade-in after negotiating.... hmm. Try that with any domestic '03. As a real-life comparo... there are 2 '01 Sequoia LTD's in the sunday paper. 31k, 32k. '01 Expeditions in the paper(4) are from 20-23k all "loaded" in different arrays.... an '04 EB expedition is on CD.com for about 36k. a Sequoia '04 LTD, 42k. Both are 'base' models, can go up by adding leveling susp, etc. the Sequoia loses about 10k(25%) in 3 years, the Expedition, 14.5k(average 40%) in 3 years. Not even factoring in that cars seem to go up about $500.year. |
|
|
OK, I'll bite......In February of '02 I shopped a Sequioia SR5 vs a Tahoe LS. Never found an SR5 with an MSRP less than $39k. All (the Toyotas) were packed with Gulf States Toyota Distributor's (Texas and most Southern states East) low-value, high-dollar, add-ons such as etched glass, road-side assistance, protection pkg (ScotchGuard and exterior Poly-Coat), etc., etc., amounting to $3k While I admit I didn't pursue the Toyota more than two sessions, the car was in short supply and the best offer I could manage was $1500 under MSRP or something close to $37.5k. I ended up with a lightly equipped Tahoe LS that listed for $34k+ bought at invoice less the $2k rebate + a very nice 5% APR.......$28,000. The estimated trade values determined by Edmunds may or may not be accurate; however, their accuracy should be equally good or bad from vehicle to vehicle. If you use Edmunds to determine a trade value for both cars, a Tahoe equipped like my '02 = $21,800 and an '02 SR5 = $26,100. Had I bought the Toyota I should expect $32k+ to be as good as the Tahoe. Even if I subtract the $3k that Gulf States socks us Southerners with, I ought to expect $29.5k trade value. Tell me where I'm wrong. |
|
|
|
|
on the "real world trade in values" thread, the Tahoe, as with a few others of the full size truck family are just as good if not better as Toyota. In terms of the minivans, compact truck, midsize SUV, car, etc.... I think that the foreign will most usually be your best bet. The whole 3k package is just wrong... IMO.. sounds like they cornered the market on that one... terrible. |
|
You are here:
Forums
Smart Shopper Smart Shopper-Archives Depreciation: Foreign vs Domestic Vehicles
New? Join Now!
Forum Tools
Search Forums
Browse by Vehicle
Browse by Board
Browse by Topic
Today's Chats
