Depreciation curve on cars
 

Hi,

Auto depreciation is a good thing...you can buy an expensive car for quite a discount that is a couple of years old.

Auto depreciation is a bad thing...drive a new car off the lot and it becomes a "used car" and you loose $5K right off the bat.

When is the place time on the depreciation curve to buy a used car? 5 years with 60K miles? More? Less? Depends on the make and model?


Chuck

Yes. Depends on the make/model. More "durable" vehicles tend to have a shallower depreciation curve. Try "Neon" vs. BMW for example. Frankly, unless the gods smile upon me and drop Lotto in my lap, I will let the other guy take the hit and look for a fleet or rental with a sizable chunk of warranty left. Been doing that for years; pay cash, no hassle, sell the older car myself, maximize profit, minimize loss (always a loss with cars!!)

aren't rental cars beat on a regular basis...that has been my experience when I rent one...just curious how they end up in the long run

At least with a fleet car, you kinda know what you are getting. At a dealer or private sale, you have no idea what kind of lies you will be fed. "Oh yeah, changed the oil every three thousand, really..." At least a fleet car has seen a tech once in awhile. You can't rent or lease a non functioning fleet and stay in business....Never had one that I bought develop what I would call fatal problems. (blowing an engine, dropping a tranny, that kind of situation) And most come with a reasonable warranty, not the "caveat emptor" of a private sale or the 14 day wonder some states allow from dealers.

Just one guy's experience....

good point, I was always curious how those cars made out after they were sold

I bought a 5.0 Mustang convertable from a rental company several years ago. It had a very fat file of all the maintenance the car recieved. It was my wife's daily driver for a long time. No problems.

Maybe in a few years I will buy a depreciated GT-3.

The most economical point to sell on a new car is supposed to be at nine months. The depreciation is at about the same point as when it was first taken home and nothing should have been spent yet on maintenance and renewals.

Or maybe in a few years I will buy a depreciated Carerra GT.

I'll have to wait longer than nine months!

For upmarket cars, buying one three years old and just off lease seems to be a good deal. I assume the leaseholder gets the service done (and keeps a stamped service book) so as not to pay extra charges at the end. In 2000 I bought a 3 year old A6 for half the purchase price in 1997, and it still had 2 years of the 5 year warranty left. Of course, as soon as the warranty expired, it needed new front struts, rear pinion seal, ...

The last rental car I rode in was a Saturn LS. It handles the offroad terrain better than I expected. Although, ground clearance could be better.

I think I'll have a hard time ever buying a new car. I can get a slightly used luxury car, or sports car for about the price of a nicely equipped Honda Accord. Do a search on Autotrader for cars between $20K-$25K, and less than 45K miles. You'd be suprised what falls into that category.