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High End Luxury Cars

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  • blkhemiblkhemi Posts: 1,717
    I agree with that entirely. The main reason for such a fall-off in resale, particular the last model year, is that everyone wants the next best thing. But you're right, some luxo used cars command about the same as new ones, especially M-B's and BMW's.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    (always talk #s in otd)

    Out-The-Door certainly gets to the bottom line for comparisons when purchasing within the same state, and when trying to make a good purchase deal, in general, which I assume you are referring to. When comparing deals across larger geographic areas that cross state lines, however, the price of the vehicle itself needs to ALSO be mentioned.

    There are MASSIVE differences in taxes and license/registration expenses from state to state. And it's noteworthy and important to expose what a dealer sells the VEHICLE itself for, before the different state governments add their nasty share.

    The reason I mention this is because when discussing vehicle prices on an international forum such as this, unless the price of the vehicle itself is definitively represented, it can be extremely difficult for readers from varying locations to determine from an OTD figure what the vehicle price itself actually is, given those differences in the supplemental gov't fees.

    TagMan
  • ljflxljflx Posts: 4,678
    Milage is the achilles heal of expensive cars. So if a used current model generation lux or sports car commands as much as a new car it has nothing to do with the car and everything to do with its limited production. If there is a new car available and a used car available at the same price and equally equipped then who in their right mind is going to buy the used car? Start producing any limited production cars in volumes and the prices will drop like a rock. The laws of supply, demand and common sense apply everywhere.
  • blkhemiblkhemi Posts: 1,717
    Not quite so. Take for instance the ubiquitous mainstream Honda Accord. A new '06 Accord EX-V6 lists for around 27k. There is a used '05 with 8000 miles on it in the newspaper for 26.5k. So it doesn't have to be high level/low volume cars to command the price close to new. The same could be said about the Toyota Camry, Nissan Maxima, Acura TL, and Lexus ES, which all carry extremely high resale values. And the yearly productions for the Maxima, Camry, and Accord are in the 100's of thousands. Yet Chevy sells almost the same Impala's in numbers as Camry's, yet at the end of a 4-year cycle, the Impala is worth less than half of the value of the Camry's.

    And to that, not all luxury cars, even some produced in low numbers, have traditionally good resale values. A Jaguar XJR/XKR is not going to a resale for nowhere near what a M-B S/SL or a BMW 6/7 would have. And Merc produces and sells MORE of each of the aforementioned cars.
  • lexusguylexusguy Posts: 6,419
    Residual values dont have anything to do with production numbers. Its all about a perceived cost of future ownership, combined with "the badge effect".
  • sv7887sv7887 Posts: 351
    Hi Everyone,
    I need your help on this potential Mercedes deal I am making. Basically there is this amazing looking 2004 (Registered 7/2004) S430 4 Matic with 8400 miles on it. It has a clean history and zero paint defects. The dealer wants $59,000 asking. This car is also Starmarked for one year. All scheduled maintenance is included since it is MY 2004.

    They are offering me only $43K for my 2005 LS430 with 7,100 miles on it. The Kelley trade in is $49K. I think they should be offering me at least 1-2K more on trade and some discount on the new car.

    To be fair, I saw a similar S430 with 22K miles (at another dealer) for $57K. So in comparison this is a better value. What sort of deal do you think I should be getting?

    The car is amazing. Merc, I finally understand your enthusiasm for Mercedes. This outgoing S is easy on the eyes and has a great interior to boot. After all these years I finally summoned up the nerve to drive one outside of the parking lot.

    Much to my surprise, it drove similar to my Lexus but I didn't have any of the Airmatic buttons pressed. Will I notice any difference with it turned on? Also I didn't drive it past 40 MPH. The Bose stereo was nice, but I missed the fact that it doesn't have a touchscreen.

    I'm also wondering about reliability. The car has a good history, the previous owner traded it on a new S550. My son has offered to pick up the tab for most of it, as a birthday gift to me. I do feel bad accepting that offer since he just started work as a Management consultant. I feel like he should be buying himself a nice car instead!

    Looking forward to your comments,
    Sam
  • designmandesignman Posts: 2,129
    First off, if you are going to do this sell the LS on your own. They're killing you on the purchase/trade difference.

    The car is amazing. Merc, I finally understand your enthusiasm for Mercedes.

    Well, you always said you liked the S. Calm down, there will be PLENTY of bargains now that the new model is here, and you'll do a helluva lot better if you walk in without a car to trade.

    That's a great son you have there. And kudos to the parents who raised him.
  • ljflxljflx Posts: 4,678
    "Not quite so. Take for instance the ubiquitous mainstream Honda Accord. A new '06 Accord EX-V6 lists for around 27k. There is a used '05 with 8000 miles on it in the newspaper for 26.5k."

    My uncle is a psychiatrist and the guy that pays $26.5K for a one year old car with 8K miles instead of $500 more for a new one (with a full warranty) with 0 miles will need to see him ASAP.
  • designmandesignman Posts: 2,129
    Aye, what are you gonna be doing Sunday night at 9 PM?

    It's been a long time since fat Tony went running through the snow-covered woods in his Ballys.

    ;-)
  • denaliinpadenaliinpa Posts: 169
    before you pull the trigger on a used S430 i would search
    for a brand new one. MB is offering really great discounts on the outgoing S models. you should be able to get at least 10k off of a brand new car. 0 miles newer model year and a longer warranty may justify any added costs. good luck.
  • blkhemiblkhemi Posts: 1,717
    That's a steep hit to take on the LS. I'd try to sell it myself before I let an over-acheiving dealer cut me short.

    The price of that used S430/4Matic is very close to what's being offered on new '06 models, a few grand give or take. As to reliability, it greatly improved through and after the '03 m/y. These models saw the least performance and electrical problems.

    P.S.- Is your son adoptable, as I'd quickly swap with you.
  • blkhemiblkhemi Posts: 1,717
    Your uncle will be a very busy Dr. as there are thousands of people who purchase vehicles like this.

    P.S.- If the Honda is certified, then it will carry a better warranty than new, 6yr/100k mile.
  • rayngrayng Posts: 70
    People fall in love and buy without checking to see if it's a good deal. Dealers count on ignorance and impulse over reason to make money. Hence you'll have people who pay about the same for new as old. Note that for many classified listings, the advertised price is not always the final price. In fact, there's often much more discounting on a used than on a new car. So that $26.5 accord may be had for thousands less. As always, do your research and buyer beware.

    Most manufacturer dealerships will add extended warranties like the 7 year 100k on new cars so there's often no reason to buy used over new for warranty reasons (with all else being equal).
  • rayngrayng Posts: 70
    The navi on the s430 has no touchscreen which makes entering street addresses a pain. Please calm down and think about ergonomics as well.

    Please don't let your son buy you a car. Have him save for his own car and retirement first.

    Also keep both deals separate in your mind. The purchase should be made as a separate deal from the sale your LS. Your LS should also last much longer and have fewer problems than your S430. Have you driven the S500? In socal, the price difference is so small and the acceleration difference so great that I would move up to the 500 if I were you.

    Regarding the purchase, check out carsdirect, autotrader, and other web sites to see if you are clearly getting a good deal.
  • ljflxljflx Posts: 4,678
    "Your uncle will be a very busy Dr. as there are thousands of people who purchase vehicles like this."

    Thousands of fools if that is the case. Sorry I don't buy it for a second and an advertised price is hardly a closed deal price. People don't overpay 20% on a car like that and people who are buying that type of car are careful with their money.

    SV - that is one terrible deal. You are overpaying on one car and you are being underpaid on your trade. I've seen $76K S430's advertised at $59,900 brand new in the last two months. If you want one that badly pick it up and sell your car privately for $50-51K. I think you're being impulsive and when people are impulsive they make bad deals.
  • ljflxljflx Posts: 4,678
    Designman - I've got it being recorded on my DVR and on my DVD recorder at the same time as I am not getting home till 9:30 or so tomorrow. I've even got the record times extended one hour in case of a braodcast timing problem. The show must be watched tomorrow night as everyone will be talking about it Monday morning and this first episode is a "killer".

    BTW - if Johnny Sack is in the pen the whole show I'm going to miss him. He plays that role letter perfect.
  • sv7887sv7887 Posts: 351
    Hi Everyone,
    Thanks for your comments. I came to the same conclusion regarding the deal. I hate selling my own cars, it's such a hassle. However, there is another Mercedes dealer here who is part of the same chain that owns the Lexus dealer I bought mine from.
    I think it makes more sense to buy a new '06 S430 and trade mine in. Normally this chain of dealers will give you full Kelley trade in, which is around 50K in my case. I'll see what it all comes to. I like the car, but like everyone on this board, I'm going to be smart about it.

    Having said all of that, it's a nice car. The reason I want one is the 4-Matic feature and of course the styling. Owning a Mercedes has been a lifetime ambition, but I've never had the nerve to buy one. It is alot of money especially when compared to the LS430..But it is a nice car, that's for sure. It's one of those things that isn't easily explained. If we were all "rational" people we'd all be driving Toyota Camrys.

    My son wanted to buy me the car as a birthday present. I had no idea he's been saving every penny for the last few months to do it. That would explain why he hasn't bought himself an older XJ8 yet. Like me, my son is a car guy. (Much to his mother's annoyance!)

    I wasn't even thinking of buying a new car. He just told me yesterday about his plans. I don't want him spending all of his money on this car (He's only 23) so I'll likely pitch most of it in, that is if he'll let me!

    Thanks for your comments,
    Sam
  • houdini1houdini1 Kansas City areaPosts: 5,873
    Tagman is correct about otd pricing. Otd should never include tags, title, and licencing fees. It just adds to confusion. Car dealers and sales guys love to confuse you.

    2013 LX 570 2010 LS 460 2002 Tacoma 4x4

  • houdini1houdini1 Kansas City areaPosts: 5,873
    Sam, is there anything about your LS that you do not like? Why would you want to get rid of it so soon? I am glad you came to your senses at least partially.

    Your son may be rolling in the dough right now but times change. Tell him to save his money that you already have a great car.

    2013 LX 570 2010 LS 460 2002 Tacoma 4x4

  • blkhemiblkhemi Posts: 1,717
    Yes, thousands of fools(as you'd have it), but it happens everyday. You're right, the advertised price is not always the final price, however car dealerships have the knowledge to pull a fast one on a unsuspecting shopper, especially an inexperienced person. There are people who fall in to the illusion that they're actually saving money. Does this make them FOOLS? Hardly, perhaps mis-informed or mis-educated on beating salesmen and dealers at their own games.

    P.S.- The average used car transaction is usually much higher than necessary, so yes, people pay 20% over what they should, in some cases more.
  • blckislandguyblckislandguy Posts: 1,150
    The last 10 or so posts are a significant improvement IMHO over the usual Lex vs. MB stuff. The analysis in these posts reminds me of a question I have wanted to ask for a long time. When is the best time to buy a HELM? At the beginning of a model run or at the end?

    Clearly, if you are an "early adopter" buying say a new 2007 S Class will give you the benefit of driving the "new" body style for 6 or so years. As a result the initial depreciation should be less than normal because you will have the new body style. Additionally, and no less important, the psychological deprecation should build more leisurely. In other words, because you are driving the current body style you will tire of it more slowly. (My mother never stopped telling us that her 1941 Plymouth was the only "new" car available for 10 years.)

    On the other hand if you buy a new '06 S Class you'll get a quick 10K off the MSRP but probably will be saddled with higher than normal depreciation because it is an "old" body style. I suspect that just like year-end automotive sales, that these additional discounts don't overcome the higher depreciation.

    Finally, lets not forget that the early adopters bear some risk of initial bugs that will need to be worked out. The '07 buyer is a beta tester.

    So, using the S Class as an example, is the smartest move to buy a heavily discounted '06, a new style '07, or next year a debugged '08?

    (For those of you who may think that this analysis is beneath them, let me encourage you to think in terms of pre-tax dollars and opportunity costs. Saving 10K is akin to a 14k raise on your W2 and if invested in say an emerging market bond fund would have doubled in 12 months.)
  • blkhemiblkhemi Posts: 1,717
    It's a catch-22. True enough you'll be one the first to enjoy the new model, and being the first does have it's perks. HOWEVER, more than usual, there are problems associated with first m/y cars. This occurance is usually more elevated cars, because for the most part they are laden with more techno-gadgetry than we'll ever use throughout the ownership of the ride.

    Mercedes has pushed the envelope even further by developing new-edge technology, which is always the case when the biggest car to wear the 3-pointed star is redesigned. But as cars advance, they get more reliable. It used to be that Honda/Toyota buyers bought those cars on the sole reason for legendary reliability records. Now you have even Hyundai taking accolades for workmanship and top-notch quality and reliability. This is a sign of our time.

    Is it worth it to buy a car in the first m/y? It lies solely with the expression of the potential buyer. DCX upgraded the factories that make German-built Mercedes, so I'd imagine that it would improve the Mercedes once proven track record for good(if not great) reliability. Most buyers of these high-end cars buy them on mostly impulse, not need. So the new '07 S is definetely expressive enough to further the person impulse.
  • lexusguylexusguy Posts: 6,419
    "When is the best time to buy a HELM? At the beginning of a model run or at the end?"

    How about the middle? I think the best time to buy is on the mid-cycle update. That way you get the benefit of some new stuff, tweaked styling, maybe some extra power, etc. but its not a brand new model that could have significant problems.
  • rayngrayng Posts: 70
    OTD means out-the-door. If you prefer to compare prices with just MSRP, Invoice, etc... then do so. But I think buyers of MB in California would benefit from knowing the OTD price from my experiences. We're not publishing manifestos, or car pricing guides. This was my experience. I clearly qualified it by naming dealer, location, and when I bought in addition to what was included in the OUT THE DOOR price. My intention was to our fellow forum users an example of how much MB would discount their 06 S classes. If you are confused, then post your questions. We have many smart and savvy car guys here to help. So Tagman and Houdini1, let's not confuse those who might be confused. I'm sure all of us who read this forum can figure it out for ourselves. :D
  • rayngrayng Posts: 70
    IMHO, generally buy mid-cycle for the reasons you stated. However, if you like the outgoing model, buy at the end but don't wait until the very end unless you don't really care about colors or options.

    Buying in the middle will also give you the benefit of getting more engine choices, interior options, and model choices (hybrids). While some HELMS like Lexus and Mercedes discount heavily at the end of the model run, lower volume HELMS like Audi, Porsche, and Bentley generally will not.

    There's a good argument to buy the at the end of the model run in cases where you like the old more than the new (ie the incoming model has ugly fender flares and bad ergonomics. :D ) In 1998, the outgoing air-cooled 911 was snapped up by Porsche-lovers who lampooned the new water-cooled and watered-down model. Of course the tear-drop headlines brought the traditionalists to tears.
  • houdini1houdini1 Kansas City areaPosts: 5,873
    I think most people on this forum are "savvy" enough to know they have to pay their taxes and licensing fees.

    I agree that OTD means out the door. I don't pay my taxes and licensing fees at the dealership. They are paid later at the licensing bureau.

    To be meaningful the OTD price MUST be in relation to the msrp. That way you can tell just how much the car has been discounted. Adding in taxes just confuses the issue. If you are going to include TTL you might as well include insurance costs, personal property tax, and maybe even that first tank of gasoline.

    2013 LX 570 2010 LS 460 2002 Tacoma 4x4

  • blckislandguyblckislandguy Posts: 1,150
    "In 1998 the outoing air cooled 911 was snapped up by Porsche-lovers who lampooned the new water-cooled..."

    Isn't it amazing how things can change? The current water cooled 911, known internally as the 997, is red hot and its predescessor, the 996, that replaced the air cooled version, has retained a lot of its MSRP. No one has ever looked back on the air cooled units. Fully 50% of Porsche sales are now Cayennes.

    Speaking of retaining MSRP, I haven't done a lot of research, but my impression is that the 911 has the best resale of any HELM. Moreover, the transaction prices are close to list. Who says that Porsche couldn't sell a HELM sedan to aging boomers?
  • grandaddygrandaddy Posts: 66
    Got to agree with Tagman and Houdini on the tax issue. No reason to include in OTD price. It's a no brainer.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    So Tagman and Houdini1, let's not confuse those who might be confused. I'm sure all of us who read this forum can figure it out for ourselves.

    Sorry, rayng, I can't let you get away with this one.

    Here's why . . .

    I can guarantee you, it’s in nobody’s best interest (except the car salesman’s) to do backwards mathematics to figure out what the VEHICLE's price actually is. Like I said, the OTD price is a good dealer-to-dealer final comparison when purchasing a vehicle, but unless you know the CAR'S price, you are missing the meal's main course.

    Here's the example:

    I live in California. Like you, I'm savvy enough to know a good deal, but I'm not going to learn every state's different sales tax and license and registration fees. Even within different counties of a state there are different tax rates.

    So, if I tell you that a car is 75,000 OTD in California, and it is also 75,000 OTD in Oregon, Nevada, or Illinois, for example, the price of the VEHICLE itself would be dramatically different!

    When you only quote OTD, you cannot determine the actual car's price without first removing the tax and license and registration fees! You may not think so, but that IS important if you want to compare the ACTUAL VEHICLE's final discounted selling price . . . particularly in different regions of the country!

    Do you know all the tax rates in all 50 states, and all the tax rates in all the counties in each of those 50 states, and all the license and registration fees in all 50 states?

    So, when the taxes and license and registration fees can vary so much from area to area, it just doesn’t make sense to keep the price of the vehicle itself HIDDEN. I, for one, like to know the price of the VEHICLE that different people are paying around the country when we discuss it.

    I appreciated your post and the information you offered, but I hope you are willing to see my point of view on this. OTD is fine, yes, but it helps to disclose the VEHICLE price also. It matters! At least IMHO it does, for the reasons I have offered.

    TagMan
  • merc1merc1 Posts: 6,081
    How about the middle? I think the best time to buy is on the mid-cycle update. That way you get the benefit of some new stuff, tweaked styling, maybe some extra power, etc. but its not a brand new model that could have significant problems.

    This is exactly what I was going to say, especially with a Mercedes, but I think it applies with any luxury brand who sticks to a 5-7 year production run. Oh how I wish a 2003 S500 Sport or 2003 CL500 Sport were withing my grasp!!

    M
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