New Car Depreciation...... truth or myth?
Is it really true when you drive a new car off the lot - you lose thousands off the value?
I have been looking for a new car (and slightly used- under 10,000 miles) and I am finding the prices are very similar...That they don't really depreciate that much. Am I missing something?
i.e. (suv's BMW X3, Nissan Murano LE, Lexus RX330)
- 1 decade agoFavorite Answer
Yes, it is. Because, for instance, say you see a used 2008 on the lot and it's $1k less than a brand new one... that means that the delaer had to buy it for less than what they're selling it now... so they probably took it in for $3-5k less than it was when it was bought a month ago.
This is why I buy used and 2-3 years old... because, for example, my S2000 cost $34k new, and I got it a few years later for $18k. That's almost a 50% depreciation! No thanks, someone else can pay for that...Source(s): Former car salesmanager
- Anonymous1 decade ago
Cars do loose a lot of value when they are driven off the lot. Some cars do not loose as much as others. For instance, the Mini Cooper, which has the best resale value in the US,can have a 2006 which originally cost $26,000, can be found on the lot for around $21,000. The Hyundai Entourage, which has the worst resale value in the country, can be bought new in 2007 for $23,000, can be selling now with low miles for around $16,000. The reason the cars you are looking at don't have that much less of money over buying new is because of two things. First reason is because all the cars mentioned have great resale values, especially the X3. The Second reason would be that is is sold at a dealer. Dealers have the ability to charge whatever they want. When they take a trade in, they HAVE to make a profit somehow.
Hoped that answered your question.
- 1 decade ago
Check kelly blue book for a standard evaluation price for the make and model you're after. Then shave off a few percent and use that as your offer price. Obviously, make sure you get a carfax report on the vehicle as well, to make sure nothing major has happened to it (in case you see a too-good-to-be-true price).
Private sellers like to overprice their vehicles, but you can still give them an offer below what they're selling for. Just be firm in your price and look elsewhere if they don't like it.
Carlots usually make A LOT OF MONEY on used cars. They buy them cheap, usually a good deal under kelly blue book prices, and then ramp up the price to make a fat commission. Don't feel shy to haggle on a used car price. You can EASILY shave off a thousand dollars or more like that on a moderately priced vehicle. If they don't like it, hey - lots of other places to go shopping :)
- 1 decade ago
Absolutely true because when you drive that new vehicle off the lot it instantly becomes a used car.
It's not wise to invest money in deprecating assets. But if you can afford to lose thousands of dollars the moment you drive off the lot then go for it!
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- Trump 2020Lv 71 decade ago
This will only be a concern if you trade in the car after a year or two. The dealer will rip you off on the trade in value. That's one way they make money, by giving little for a trade in and then reselling it for a premium price.
The SMART person buys a NEW car and keeps it well maintained and uses it for 10 years or more.
(works for ME)
- JeddayLv 41 decade ago
blue book value and purchase value are different. Look up the car on blue book and then compare that to the dealers and the dealers will be higher. That is how they make money what they give you for the car at trade it or after you have driven it .. big difference
- Anonymous4 years ago
Don't worry about tapping the brakes, worry about not getting hit in traffic. Too much fiddling with pedals will take your mind off driving. Change gears or use the clutch to keep the engine from stalling. I have been driving for more than 60 years and changing gears and clutch use are as a second nature to me and most others who drive standard or automatic s. Given long enough, you will not have to think about it.
- portishead_22Lv 41 decade ago
look at one about 2-3 years old, the price should drop about 40 percent depending on the car...the higher the price the more it will depreciate.
- OttoLv 71 decade ago
Check what you can get for a car right after buying it. Depreciation is no myth.
- 1 decade ago
Absolutely true. You could compare it to buying a new TV but in an open box, you wouldn't want to pay the same for it versus a TV still in the sealed package.