: why do american cars depreciate so much?



Uria702
03-17-06, 04:51 PM
my 04' escalade which was 60k originally, is now worth 32k kbb suggested retail value with 19,000 miles. that means in another 2 years itll be 16k which means on average the car is depreciating 25% or 10k a year :want:

but why? why is a honda odyssey from 04' with the same mileage which was 35k originally now worth 32 the same thing as my 04 60k escalade? just pisses you off.

Destroyer
03-17-06, 06:08 PM
my 04' escalade which was 60k originally, is now worth 32k kbb suggested retail value with 19,000 miles. that means in another 2 years itll be 16k which means on average the car is depreciating 25% or 10k a year :want:

but why? why is a honda odyssey from 04' with the same mileage which was 35k originally now worth 32 the same thing as my 04 60k escalade? just pisses you off.
I dont know why. But yes American cars do depreciate more than imports but luxury cars as a whole seem to depreciate real bad regardless of who makes them. This leaves Cadillac and Lincoln owners in a bad predicament as they are American and luxury cars.

Pricing out used cars is crazy. I can get a 3-4 year old Caddy or Lincoln for less than half what it cost new and with real low mileage. My 97 Mercedes S320 cost $73k when new and I bought it wth 62k miles and mint condition for under $15k. Just bought a 98 Caddy Deville w/86k miles and great shape for $4200!. I am however selling my wife's '00 Camry and was pleased to find that they still go for up to $13k and we paid just a little over $18k for it brand new, thats pretty damn good!. I bought a '99 GMC Explorer conversion van 2 years ago for $17k w/43k miles, I put 20" wheels on it (about $2k), tinted the windows, installed a hitch, and upgraded the stock stereo with a Sony Mp3 player, 3 10" subs, 2 amps, and 6 Infiniti speakers throughout and I'm having a tough time getting $10k for it and it has only 64k miles now. Its frustrating!. One thing is for sure, I will never buy a brand new car again unless its a low level Japanese car as they seem to hold their value the best. Buying 7-8 year old luxury cars has been working out real well for me as I still get all the luxury at a drastically reduced price plus its real easy to find elderly owned gems here in FL with real low miles.

Caddy Man
03-17-06, 06:19 PM
Thats why you never buy an American car brand new. I have a Cadillac CTS, fully loaded 2003, had 17,000 miles, still smelled new. New price was about 40k, got it for 25k in summer of 2004.

Zorb750
03-17-06, 06:33 PM
It's probably mostly perception of lack of quality.

Look at BMW though... E38 750iL 1999 $101000 as stickered with options. 2005 $30000 with 38K miles.

Or Mercedes... 1993 S600 $7500. There's one around here for sale, white. That's the W140 style so you know. 120000 miles, $7250. Been for sale for a year and a half.

Destroyer
03-17-06, 06:58 PM
It's probably mostly perception of lack of quality.

Look at BMW though... E38 750iL 1999 $101000 as stickered with options. 2005 $30000 with 38K miles.

Or Mercedes... 1993 S600 $7500. There's one around here for sale, white. That's the W140 style so you know. 120000 miles, $7250. Been for sale for a year and a half.
Like I said, luxury cars as a whole depreciate real bad. I would never buy any luxury car new. Might as well flush the money down the toilet.

Uria702
03-17-06, 07:01 PM
i guess its lack of quality and the fact that the cars are so problematic when the warranty expires, a few years ago my 97 malibu costed me over 14k in 2 years to maintain, then i tossed it in the garbage i bought it brand new and ended up throwing it in the trash with 80k miles, ended up selling it to some poor sucker for 1900, paid 22k for it. 6 years later it was worth close to 0, aint that a pip?

HotRodSaint
03-17-06, 07:08 PM
Since gas prices went up, all large SUV's are worth less.

gary88
03-17-06, 07:55 PM
Since gas prices went up, all large SUV's are worth less.

Speaking of SUVs I just sold my Blazer today for 5k :) I hope the guy I sold it to likes filling up a 30 gallon tank, I siphoned out the full tank of gas it had in it yesterday :lildevil:

I~LUV~Caddys8792
03-17-06, 08:23 PM
I love it! For $15,000 I can buy a 1997 S420 Mercedes with 110k miles, or I could take that $15k and buy a '95-'96 Town Car Signature Series with 75k miles for $8,000 and a 1972 Lincoln Mark IV in pretty good shape for about $6000 and still have money left!


The redicilious (sp?) depreciation rate is what got me behind the wheel of a $33,000 Cadillac in great shape with 99,098 miles for $3900!!

For $3,900, I could have gotten a 1994 Accord with like 156k miles, and it wouldn't have been in nearly as good of shape!

Destroyer
03-17-06, 09:10 PM
I love it! For $15,000 I can buy a 1997 S420 Mercedes with 110k miles, or I could take that $15k and buy a '95-'96 Town Car Signature Series with 75k miles for $8,000 and a 1972 Lincoln Mark IV in pretty good shape for about $6000 and still have money left!


The redicilious (sp?) depreciation rate is what got me behind the wheel of a $33,000 Cadillac in great shape with 99,098 miles for $3900!!

For $3,900, I could have gotten a 1994 Accord with like 156k miles, and it wouldn't have been in nearly as good of shape!
Oh I could do better than any of those. An S420 w/110k miles for $15k?. I can negotiate one down from that with less miles. I've passed up on '98-up Towncars for less than $7500. The used car market is suffering bad. We are flooded with used cars, its the whole supply vs demand thing. Good time to snatch up deals though!.

noahsdad
03-17-06, 10:56 PM
Several different factors are at work, but mostly it's a 'perception is reality' issue. We can debate all day about which cars are more reliable in the long term, but it doesn't matter. If the customer doesn't THINK this DeVille will be as dependable as that Toyota, he'll spend his money accordingly.

A lot of American cars depreciate fast because American manufacturers and dealers push leases so heavily. Since most leases are 2 or 3 years, there's a cycle when a flood of those cars come off lease at the same time and become used cars. The dealers don't want to mess with them so they dump them to wholesalers or the auctions, and they end on up second-tier lots at bargain basement prices. People who purchased new cars get screwed because there are so many cheap cars just like it on the market.

Another problem is rental cars. GM and Ford dump a lot of vehicles into rental fleets, which run them for 15-20K and then sell them cheap. You can rent a Cadillac or Lincoln anywhere in the country, but when's the last time you saw a new Acura or BMW in anybody's rental car inventory? Again, the guy who buys an American car has to bend over at resale time.

Jesda
03-17-06, 11:41 PM
...because in the 80s they were junk.

Night Wolf
03-18-06, 12:04 AM
...because in the 80s they were junk.

I beg to differ :).

hardrockcamaro@mac.c
03-18-06, 04:46 AM
In the UK, my STS cost $70,000 new.
A year later it was worth $46,000
The year after that it was worth $35,000

At 5 years old it was worth $15,000


Interestingly the intital depreciation was worse than say a BMW, but at 6 years old the equivalent age and spec BMW is worth the same.

It will now depreciate very slowly as American cars in the UK depreciate slowly once they drop in value to about $15,000


My 1988 IROC Camaro is in truly excellent condition (but not show standard) and is worth about $8,500 - $9,000

Sandy
03-18-06, 08:42 AM
Noahsdad has the REAL answer! All else are opinions. It's in Paragraphs 2 & 3,

Jesda
03-18-06, 08:50 AM
The root cause:
http://psihoyos.com/pages/Stock/Portraits/smith-roger/images/smith-roger0002.jpg

HotRodSaint
03-18-06, 09:31 AM
Noahsdad has the REAL answer! All else are opinions.

So it's just an opinion that all large SUV's have suffered a loss in resale value since the rise in gas prices? :rolleyes:

You want to put some money on that before I waste my time looking for links?? :bouncy:

HotRodSaint
03-18-06, 09:35 AM
http://www.cadillacforums.com/forums/cadillac-forums-lounge/54450-big-trouble-big-suvs.html?highlight=suv

For those that missed or ignored this discussion the first time.

Uria702
03-18-06, 10:30 AM
thjats not the case, im not talking about the escalade, any american car, my 97 malibu was 22,000 brand new, in 99 was worth around 10k doesnt make sense

HotRodSaint
03-18-06, 11:59 AM
my 04' escalade...

You started out by specifically talking about your '04 Escalade, not your '97 Malibu.

As far as I recall, the SUV known as the Escalade, was not readily available at car rental counters and they weren't heavily incentived, as they were selling quite well.

I agree that incentives and fleet sales have served to diminish the resale value of most American car's, and the Malibu is a big fleet vehicle.

But it is the higher gas prices that have diminished the value of American SUV's which until recently, have traditionally had high resale values.

But whether it's car's, truck's or SUV's, resale value is set purely by supply and demand. The demand for SUV's have dipped because of gas prices. The supply of off-lease or off-fleet car's is abundant, thus the Malibu's value is greatly diminished.

The moral of all of this is to buy a used vehicle in order to get a great deal and not to suffer a great depreciation.

hardrockcamaro@mac.c
03-20-06, 04:57 AM
The same thing applies over here to cars in large fleets.
Most commonly Ford and Vauxhall.

There's just SO many of them it's a buyers market.

Caddy Man
03-20-06, 10:45 AM
hmm not sure if a lot of cars in the market is why american cars depreciate so much. There are TONS of camrys and accords out there...but they still hold thier value.

HotRodSaint
03-20-06, 11:16 AM
hmm not sure if a lot of cars in the market is why american cars depreciate so much. There are TONS of camrys and accords out there...but they still hold thier value.

It's "supply and demand".

Price is not just based on the number of those in supply, but also on the number of people who want to buy them.

If no one wants to buy them, then they loose value even if their supply is extremely limited.

If lots of people want to buy them, they gain value even if there is an abundant supply.

Elvis
03-21-06, 12:03 AM
Today when you buy something like a big SUV or an American luxury car NEW, you'd better plan on keeping it over five years, preferably eight.

I'm looking at mine as sort of a farm implement. It may not be my primary vehicle five years from now, but I won't dump it. I want 100,000 miles out of it if possible.

Sandy
03-21-06, 09:41 AM
I was talking CARS, not trucks.