Wednesday, September 11, 2013

Do luxury cars depreciate faster than average cars?

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Jason Sant


I am planning to buy a car. Being a business major and being the thrifty person that I am I would never buy a brand new car because once you drive it out the dealership it already depreciated. A one to two year old car is an ideal buy. My economics professor brought up a good point that luxury cars are cheaper to maintain than normal cars. I live in Hawaii which was ranked the worst state to own a car because maintainance is so expensive.


Answer
I would suggest that you use a shopping tool like Yahoo Autos. Just because it is a luxury car does not mean it depreciates less. Some drop in value faster then a lead ball in a clear sky.
I just pulled up a Ford Taurus and a BMW 5 series. Now the 5 series may not be a true luxury car but it is an up scale car. The BMW depreciates almost 30000 dollars (63%) in the first five years, while the Ford only 15000 dollars (48%). Now there may be cars that break this trend'.With the Ford only costing 26600 dollars to begin with is seems that the total cost of the car is almost free when compared to owning a BMW which looses more in depreciation then the Ford costs new.
So do some study, my gut feeling is that it takes a lot of money to buy a car that will keep its resale value up and then it will only be a percentage think. Lets face it, if a car costs 100000 dollars and it only depreciates 10% of its value in a given year, that is still a lot of money!
Sorry, I miss read the question, even if BMW throws in maintanance for free, it takes a lot of maintanance to make up for the extra 15000 dollars worth of loss on depreciation.

Which luxury cars are cheaper when it comes to maintainance?




Jason Sant


I am looking for a luxury car and the ones on sale are pretty affordable. I live in Honolulu so the milage on these cars are not so bad. Around 50-70,000 miles used. There are 3 cars I am looking at The first car is a Jaguar X-type 3.0 sedan 2007 and is selling for $15,000. The second one is a BMW 325i 2006 and is selling for 16,0000 and the last one is a Lexus ES350 2007 and is selling for $17,500. Lexus seems to be the most expensive one but I need to know which one will be worth keeping in the long run. This includes gas, insurance and maintainance. I know BMW is below the list but I have my eyes on the Jaguar.


Answer
For reliability, #1 would be Lexus, #2 would be BMW, #3 would be Jaguar (ugh).

The Jag X-type sedan is based on the same "wonderful" platform as the ill-fated Mercury Mistique and Ford Contour. It's a real pile and difficult to repair.

3 series bimmers are great road cars and pretty reliable, but when they break, simply the cost of parts is more than double a regular car.

Your clear choice here, if the decision is based soley on reliability and maintenance costs, is the Lexus. Personally I'd have a hard time not picking the BMW as it is much more of a sporting machine than the Lexus, but that sport comes at a high price should something go wrong.
Stay away from the Jag. X-types are the worst turds of an entire car line of turds. :)

Edit: the Jag will also be the worst of the three in fuel economy due to it being all wheel drive.




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