Lose 185 Pounds A Day!

Cammy Corrigan
by Cammy Corrigan

When you buy a car new, depreciation is a risk you have to take. So like with any risk, one tries to minimize it. That’s why Toyota and Honda are such perennial favourites. low depreciation. But what cars should you avoid if you don’t want to suffer depreciation that could make you depressed?

The Mirror has the latest skinny on UK depreciation figures. There were the usual suspects on the list. The Peugeot 407 2.0 HDi 140 Sport loses 55 percent of its value within six months and the Vauxhall Zafira 1.6i 16V Life loses 54 percent in the same time period. They were biggest depreciators by percentage, but the biggest depreciator by real-term price went to the Audi A8 4.2 TDi Quattro SE. Within six months, the Audi can lose an eye-popping £33,700. That’s $51,793 in today’s greenbacks,

So, if you bought a brand new Audi A8 4.2 TDi Quattro SE at MRS, every morning you wake up, you can kiss £185 ($284) goodbye. When this report was put to Audi, a spokesperson replied that the model used for this survey was an outgoing model to be replaced by a new one and was, therefore, less appealing to buyers. Even so, does that justify a loss of £33,700 for six months?

On the other end of the spectrum, the Mini 1.6 only lost £10 a day for the first six months. On average, new cars lost 36 percent of their value within six months. Which gives a lot of credence to buying used. Let someone else take the hit…

Cammy Corrigan
Cammy Corrigan

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  • Disaster Disaster on Sep 07, 2010

    The one common fallacy I see in articles on car depreciation is the comparison of MSRP to used car prices. If one shops wisely, and waits for the huge discounts that often occur on many models, the actual depreciation is much, much less. For example we paid about $31,500 for our 2009 Hyundai Genesis...brand new, but discounted older model (2010's were out.) When I look up the private party value on Edmunds and Kelly for an excellent condition Genesis (which ours is) they show between 28-31K, a loss of 10% in the first year, yet the actual depreciation is shown at closer to 25%. The same is true with many heavily discounted vehicles. Not to pick on Hyundai, but I saw brand new 2010 Sonatas on the lot for about $14K (after incentives)...which is not far from what they are worth a year old, according the KBB. You can find similar examples with other domestic and foreign manufacturers. Less so, with Honda and Toyota, which factors into why they command such high resale values...but are those resale values really comparable, without comparing them to the true discounted prices of the others? The trick is to know which vehicles get discounted and when and be patient. A new car purchase like this makes even more sense if you are going to keep the car over 4 years, when the extra year makes less and less difference on the resale value.

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    • Steven Lang Steven Lang on Sep 07, 2010

      The answer to that is the customer.

      The used Corolla will be sold to a subprime customer. The dealership may arrange for financing independent of Toyota Motor Credit who may not be willing to finance the customer.

      Then again, it could just as easily be Toyota who is willing to finance a vehicle with lower depreciation risk to a subprime customer who is willing to pay enough for the opportunity.

      This isn't an uncommon practice. To be frank, I don't know a single new car store that doesn't offer this alternative.

  • Hreardon Hreardon on Sep 07, 2010

    For some mind-numbing numbers, hop into the wayback machine with me to December 2007. At that point I had an option on a used 2006 Phaeton W12 with 15,250 miles on the odometer for a mind (and wallet) numbing $37,500. Yes, a car that new listed for something around $100,000 one year prior was listing for $37,500 used with only 15k on the odometer. I had the car checked out and it was in perfect condition, no mechanical faults. One more time: $37,500. Wow.

    • Th009 Th009 on Sep 07, 2010

      Only if you can get an extended warranty! I would be very reluctant to buy any used $100K+ car without an extended warranty. As cheap as it may look on the lot, the cost of repairs can be astronomical.

  • Jmo Jmo on Sep 07, 2010

    "a subprime customer who is willing to pay enough for the opportunity." It was a prime customer - a newly minted MD. I just think some people look at the sticker on the Corlla and it says 17,500 and they see the sticker on the CPO that says 14,500 and they think wow I can save $3,000. What they don't notice is MSRP at invoice -$500 new college graduate rebate, the $-750 owner loyalty and $1000 factory to dealer incentives. According to Edmunds the dealer retail on my 08 GTI is 22,333 CPO w/36k miles on it. I paid 24,500 brand new after all the incentives. In what world does that make sense? If it was 11,333 I'd say it's a deal. But, the price for a 3yo car with a warranty is just insane IMHO.

  • Davekaybsc Davekaybsc on Sep 07, 2010

    I really wish Audi would offer the A8 4.2 TDi in the US. It would show all of the LS600hL buyers just how dumb they are.

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