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.
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.
Why do Volvos have bad repreciation/resale value?
Dylan
Everywhere i see volvos are the worst for depreciation. Why? i am curious. and please, as a favor why are Audis also like that?
Answer
Hi,
My guess is that Volvos are seen as luxury cars similar to Mercedes or BMWs. But unlike Mercedes they have bad resale value because they are not as common, they are more rare. I know that Saabs as well have very bad resale value for the same reason. For every Volvo you see, you probably see 5 or more Mercedes or BMWs.
About Audis, even though they are from Germany, I think they are slighlty below Mercedes and BMWs in terms of brandname, hence their faster depreciation. Even though I don't if this applies to all Audi models.
Hi,
My guess is that Volvos are seen as luxury cars similar to Mercedes or BMWs. But unlike Mercedes they have bad resale value because they are not as common, they are more rare. I know that Saabs as well have very bad resale value for the same reason. For every Volvo you see, you probably see 5 or more Mercedes or BMWs.
About Audis, even though they are from Germany, I think they are slighlty below Mercedes and BMWs in terms of brandname, hence their faster depreciation. Even though I don't if this applies to all Audi models.
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