How Much Do Depreciation Predictions Affect Which Car You Buy?


We’ve all heard the stories, or maybe even experienced firsthand the spike in used car prices caused by both inflation and the limited supply of new cars over the last couple of years. But it’s a mistake to think that every car on the road has managed to stop depreciation in its tracks.

A study found from search engine iSeeCars analyzed data from 3 million car sales to identify the vehicles that had retained and lost the most value over three- and five-year periods, and while the average for all of the vehicles was 33.3 percent, there was a huge gulf in performance between the winners and the losers.

Related: Another Dealer Defies Ford, Adds 94 Percent Mark Up On Bronco Raptor Priced At $154,005

Of course the cars that lost the most value are only losers if you bought one new. If you’re looking to pick up something like a BMW 7-Series or Maserati Ghibli on the used market then they become winners, because both lost over 56 percent of their original value, meaning you’re potentially looking at a bargain. According to the study data the 7-Series lost an incredible $61,923 on average over the five year term.

On the flip side, the Jeep Wrangler’s incredible 7.3 percent depreciation figure figure (equivalent to $2,361) is only good news if you already own one, or are about to buy a new model, but not great if you were hoping to get a good deal on a Wrangler with a few miles under its belt.

Which got us wondering how much store you put in predicted residual value when you go shopping for a new car. Is it a top priority, or do you barely give it a moment’s thought?

One interesting detail we noticed in the study showed that making the wrong choice when picking between cars that are effectively identical could cost you dearly at trade-in time. While Subaru’s BRZ tops the sports car table in the iSeeCars report and is the sixth slowest deprecating car overall (losing 18.2 percent, or $5,985) its Toyota 86 alter ego doesn’t even figure in either list.

The study doesn’t provide a figure for the 86  – we asked for one, and also whether the 86 figures were included in the BRZ numbers, but it hasn’t responded. But given that it’s not in the top six sports cars and the sixth placed sporty vehicle is the Mazda MX-5 RF at 26.2 percent, we can presume the 86 fared worse than that. And while Maserati Ghibli buyers might console themselves with the knowledge that at least they were getting to enjoy a unique car in exchange for losing their shirt at resale time, there’s almost no real difference in the BRZ and 86 driving and ownership experiences.

Leave a comment below and let us know how much depreciation predictions figure in your buying decision.


Source link

What is your reaction?

In Love
Not Sure

You may also like

Comments are closed.

More in:Automotive