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When your back two tires hit the road outside of the dealership, the car is instantly worth 20% less. Cars don't appreciate unless they fall under the classics
by berbec 8y ago
When your back two tires hit the road outside of the dealership, the car is instantly worth 20% less.
Cars don't appreciate unless they fall under the classics category, and the time frame involved is decades. Who's going to hang on to a car for 60 years in case its the next 57 Chevy?
- tudelo 8y agoThere are cars newer than 60 years old that appreciate :). Of course, they do not usually appreciate past retail, but they appreciate relative to the lowest historical cost.
- rootusrootus 8y agoAside from really terrible models and premium/luxury cars (and some edge cases like EVs), a new car should not depreciate 20% in the entire first year, much less the moment it rolls off the lot.
- oarsinsync 8y agoIn Spain, dealers struggling to meet their annual sales targets will register a car and give it plates in order to hit their targets, and those cars are known as 0km cars. They sell at a ~10% discount to new cars. They're a day old and haven't rolled off the lot yet.
- brobdingnagians 8y agoIs there a minimum price for new car sales? Just wondering why they don't just drop the price 10%
- deleted 8y ago[deleted]
- detaro 8y agoMight not be allowed by their sales contract with the manufacturer, or might not find a buyer for that price before some deadline for which they want to hit a target.
- NullPrefix 8y agoThere's a name for that. It's called fraud.
- pbhjpbhj 8y agoThey do it in the UK too, not sure who it is defrauding? I guess it could be the franchise defrauding the main dealer, but they'd see that the franchise registered it? The sale transaction to the eventual customer is still recorded on the later date, so tax, etc., shouldn't be affected? Would be interested in the explanation.
- detaro 8y agoNo, it's generally not fraud, and done entirely in the open (and sometimes even on behest of the manufacturers)
- oarsinsync 8y agoThe dealer is providing a buffer for the manufacturer, holding extra stock at their own risk. The manufacturer rewards this behaviour because it’s in their interest. The customer benefits from this arrangement with a discount. All parties involved are aware what has been done, all parties consent, no parties are defrauded.
- gadders 8y agoQuite common in the UK as well: https://www.rac.co.uk/drive/advice/buying-and-selling-guides/pre-registered-cars/ https://www.rac.co.uk/drive/advice/buying-and-selling-guides...
- mikepurvis 8y agoSure they do. Check at your dealer late in the year and there's a good chance they'll have one or two early lease returns or "floor model" units sitting on the lot. If you compare the price of those ones to the ones of the same model year that are still brand new, you'll see a disparity.
- rootusrootus 8y agoAside from cherry-picked anecdotes, go ahead and research it -- depreciation information isn't too hard to find. A run of the mill Toyota or Honda will depreciate maybe 15% in the first year, then the rate goes down significantly in the following years. Still worth more than 50% of original price at five years. Yes, if you try to trade it in right after you buy it you are going to get bent over, but you could put it on the used market for a couple grand below what you paid and as long as you didn't overpay to begin with it will sell quickly.
- mikepurvis 8y agoHuh, maybe we're agreeing more than we're disagreeing, because a brand new Civic is like $20k. So if you're putting it on the used market for "a couple grand" below the new price, then there's your 10% drive-off-the-lot cost right there.
- dfee 8y agoI did buy a brand new diesel Jetta in 2016 that appreciated past retail in value when the company was forced to do buybacks :)
- Someone1234 8y ago> When your back two tires hit the road outside of the dealership, the car is instantly worth 20% less. No longer the case. After cash for clunkers, the used market is much more expensive than it used to be. If you're looking at reliable brands like Toyota/Honda a two-three year old (ex-lease?) model isn't even 20% off, and that has 15-20K miles on it. There's a reason why so many people are buying new, the used market is strange/irrational for some brands. And new vehicle incentives/lower APR loans/safety features etc make it a hard call. People should go check out a no-negotiation dealership (e.g. Carmax). You'll be surprised at current used prices compared to new.
- ryan_j_naughton 8y agoYour information is out of date. Cash for clunkers was a while ago. I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month! Some are slightly better and some are worse, but the vast majority depreciate in that range.
- Someone1234 8y ago> Your information is out of date. I am shopping for cars right now, I'm talking about my current experience with the cost of recently used vehicles (specifically Toyota, Honda, and other reliable brands). > I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month! Where can I buy these two year old vehicles that are 48% off? Or a three year old vehicle for 72% off? I'm seriously asking, link me to a 2017 Toyota Highlander Limited for $22K or a 2016 Limited for only $11K... Locally a 2017 Toyota Highlander Limited is $32K with 65K miles on it. Or $36K with under 20K miles, that's a two year old likely ex-lease vehicle that has a 15% discount, but a higher APR, worse features, higher maintenance costs, diminished warranty, and a lower resale value. The current used market is highly irrational right now. Your imagined used market where cars are 48% off after only two years sounds fantastic, but that isn't the reality on the ground.
- ryan_j_naughton 8y ago
- scarejunba 8y agoIs it possible to buy cars that are "almost new"?
- berbec 8y agoEarly lease returns, dealership cars etc all exist. I bought a 6-month old, dealership only "used" car for 33% of retail. Great deal.
- shiftpgdn 8y agoMy last two cars I sold after a year of ownership for about 3% less than I paid. In the most recent case I sold the car for just $500 less than I purchased it for as a new car with 20,000 miles on it. Go price out used cars that are a year or two old and then price out an invoice less holdback purchase on a new car.
- gwbas1c 8y agoMy 2003 Honda Civic Hybrid appreciated when CA allowed it to drive in the carpool lane.
- southphillyman 8y agoA lot of modern supercars appreciate rapidly now days it seems. A a 3 yr old used LaFerrari will likely cost you triple the original price for instance
- dagoat 8y ago> the time frame involved is decades Usually decades. For example, some early 2000s Ford GTs have appreciated to a multiple of their original selling price