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Depreciation: Foreign vs Domestic Vehicles

dardson1dardson1 Member Posts: 696
edited March 2014 in General
I understand depreciation values as published by the the "official" people who do such things are based on MSRP compared to resale numbers. My guess is that American makers price their vehicles artificially high so they can offer big discounts and rebates.
    It might not make much sense unless you realize it allows the money guys at GMAC (and Ford and Chrysler) to finace their highly discounted vehicles and use the rebate as a down payment.......essentially their creating no-down-payment vehicles that qualify way more buyers. Perhaps to their credit, the foreign makers don't seem use this creative financing. Good or bad it makes American vehicles appear to depreciate like crazy.
    Seat-of-the-pants experience, my two Toyotas (an '00 Solara and an '01 Sienna, both loaded up) were the worst "stinkers" I've owned, re-sale-wise.......both close to 35% below my buy prices after 2 years. My buy price vs resale after 2 years on a '94 Jeep GC....20%, '96 Tahoe....19%, and '98 Expedition....20%. I suggest you watch the bottom line and ignore the hype.
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Comments

  • jlawrence01jlawrence01 Member Posts: 1,828
    Every three to six months, the Wall Street Journal publishes its research on this topic comparing similar vehicles for the depreciation over two and three years. In general, domestic models depreciate faster than certain foreign nameplates (Honda, Toyota, Nissan) and slower than others (Hyundai, Kia).

    That is not even really arguable.

    Just to take YOUR example, you are talking ONLY 35% in two years. That is good. The Ford Tauruses that I am selling from my fleet rarely bring more than 50% of their purchase price after 2 years and 40k miles. The Dodge Intrepids are often worse. I would say the same about Dodge Caravans and most domestic minivans.
  • steine13steine13 Member Posts: 2,824
    That is worth discussing, esp. since everyone "knows" how cars depreciate so terribly during their first year. I agree with you that the only "depreciation" that matters is residual value relative to street price new.

    However, you're comparing apples to oranges. The two domestics you cite were popular SUVs during the upswing of that market ('94/'96), and the two Toyotas are a car and a minivan whose buy and sell dates neatly bracket the time around 2001/2002, when used-car values took a pretty nasty hit. You'd be making a different point had you bought a 94 4runner followed by a 96 Land Cruiser -- then turned around and bought an '00 Monte Carlo and an '01 Windstar. I get goosebumps just thinking about it.

    But thanks for bringing this up, because it does want discussing. Suburbans seem to have come down quite a bit -- just from what I see in the paper; Terry may want to correct me -- but they used to hold their value extremely well. Well-equipped 4x4 fullsize trucks are another example of vehicles that may be better buys new than used on the domestic side.

    The most expensive vehicle I ever owned, mile for mile, was a '92 Aerostar that I had from '99 to 01. My first new car (97 Nissan hardbody) was among the cheapest. I do agree with jl that 35% in two years ain't bad at all.

    -Mathias
  • stickguystickguy Member Posts: 41,676
    one other factor that look at is $ depreciation, not just %. Cheaper cars need to depreciate at a higher % rate. For example, if a new Hyundai is $10,000, if it depreciated 30% in 2 years, thats only 3K, not enough to make a difference. But, on a BMW that costs 40K, 30% is a 12K drop (mch more significant and noticable).

    2020 Acura RDX tech SH-AWD

  • timadamstimadams Member Posts: 294
    I think you all have valid points, here. The market for used cars changes over time, particularly for distinct types of vehicles. The economy, leasing, warranties and redesigns all have significant impact on the supply and demand for new and used cars. Comparing one time period or one vehicle type with another makes comparison very tricky. [My wife's experience with her VW Beetle proved that. This was a model that was "supposed" to hold its value like crazy, but by the time it had been out for four years - and her 2000 was two years old - the demand had been met and the used car values dropped like a rock.]

    On the other hand, it could be that the domestic makes appear to have more depreciation than they really do if you factor in actual selling prices after rebates. If you look at a percentage depreciation that is based on MSRP, it will be overstated for a GM, Ford or Dodge vehicle that sold at invoice less a factory-to-dealer incentive less a consumer rebate.

    After owning Fords, Hondas, Toyotas, Mazdas and a VW, I've come to the conclusion that ALL cars suck when it comes to losing value. Some are worse than others, though.
  • rroyce10rroyce10 Member Posts: 9,359
    .... ** The market for used cars changes over time, particularly for distinct types of vehicles. The economy, leasing, warranties and redesigns all have significant impact on the supply and demand for new and used cars. Comparing one time period or one vehicle type with another makes comparison very tricky. **

           Bang.! .. right on the money.! .. great post, great example ..

                         Terry.
  • 5speeder5speeder Member Posts: 97
    dardson--I'm not an expert here, but 35% for 2 years on a Solara seems mighty steep. When you say "resale price" you mean market value and not trade-in value, right?
  • dardson1dardson1 Member Posts: 696
    My point is not to down-grade foreign makes; but a well equipped Honda Pilot lists for $31k+ and sells with maybe a $2k discount. A comparable Tahoe lists for $37k and discounts + rebates to very similar $. I'd bet two years from now they'll have similar wholesale numbers. Depreciation-wise the Chevy will look bad and the Honda will look great.....but the money's the same.
  • dardson1dardson1 Member Posts: 696
    I'm talking trade-in numbers (all the numbers I mentioned were trade-in amounts). I was very surprised by the Solara. We traded it after 18 mo. for an 01 Lexus. During the process the sales manager (Lexus) pulled up the auction numbers (Manheim) on his computer and a loaded up '00 SLE V6 with every option with similar low miles was "all the money" @ $19.5k. The car lised for $31.9k and bought for $29.5k. I double checked with the Real-World-Trade site here, and was told $19.5k was a deal I should grab.
  • steine13steine13 Member Posts: 2,824
    ...but the market for used cars over $20k might be pretty difficult... When you got $19,5, the store would want to see at least in he $21-22 range and "ask" $23,5... at that figure, a lot of people would go for the new car... esp. with the new model around the corner. I know I would, unless I knew how the car was treated.

    If you had done this in MI, the sales tax would have been $1800... that is gone immediately. I think you're talking pre-tax numbers, though.
     
    Figure a vehicle in that price range has "about" a $2,500 spread between wholesale and retail... the rest is what the car actually lost in value. You probably would not have been any better off had you bought a certified 2000 RX300 for the same money... and those hold their value like crazy.

    My point is, it's not so much the loss in value your fighting, it's the spread between wholesale and retail on a pricey vehicle, combined with short ownership.

    You would really be hurtin' had you tried this 18-month exercise with a Cougar, me thinks. Coupes are tough in any case.

    I'll take your 18-month old Tundra 35% behind street price, though!

    -Mathias
  • tblazer503tblazer503 Member Posts: 620
    you are still comparing a Full Size SUV to a Midsize SUV. Compare a Chevrolet Trailblazer to a Honda Pilot. I bought my Trailblazer for about 29k in (early)sept '01, Retail price was 31k. Traded in nov '02 for 21k. yup, thats a 30% hit in a year. Now they are worth about (guessing) 17-18. that's almost a 40% depreciation in the 2 years. Pilot, say invoice at 29k, you will be hard pressed to find a 2 year old one for less than 20k I would imagine.

    Of course, let's not forget that the 3k rebate on the Trailblazer came out after I bought it. Purchased sept 10, 2001. Which would probably also fit in with your timing on both cars. 'If' I had bought at the right time, I 'may' have lost only 20%(6k) but the rebates weren't being seen, and I am not a fortune teller. On the other hand, I bought my '03 Accord in Nov '02, for 20k and was offered 17,5 on a trade-in after negotiating.... hmm. Try that with any domestic '03.

    As a real-life comparo... there are 2 '01 Sequoia LTD's in the sunday paper. 31k, 32k. '01 Expeditions in the paper(4) are from 20-23k all "loaded" in different arrays.... an '04 EB expedition is on CD.com for about 36k. a Sequoia '04 LTD, 42k. Both are 'base' models, can go up by adding leveling susp, etc. the Sequoia loses about 10k(25%) in 3 years, the Expedition, 14.5k(average 40%) in 3 years. Not even factoring in that cars seem to go up about $500.year.
  • dardson1dardson1 Member Posts: 696
    OK, I'll bite......In February of '02 I shopped a Sequioia SR5 vs a Tahoe LS. Never found an SR5 with an MSRP less than $39k. All (the Toyotas) were packed with Gulf States Toyota Distributor's (Texas and most Southern states East) low-value, high-dollar, add-ons such as etched glass, road-side assistance, protection pkg (ScotchGuard and exterior Poly-Coat), etc., etc., amounting to $3k
        While I admit I didn't pursue the Toyota more than two sessions, the car was in short supply and the best offer I could manage was $1500 under MSRP or something close to $37.5k. I ended up with a lightly equipped Tahoe LS that listed for $34k+ bought at invoice less the $2k rebate + a very nice 5% APR.......$28,000.
        The estimated trade values determined by Edmunds may or may not be accurate; however, their accuracy should be equally good or bad from vehicle to vehicle. If you use Edmunds to determine a trade value for both cars, a Tahoe equipped like my '02 = $21,800 and an '02 SR5 = $26,100. Had I bought the Toyota I should expect $32k+ to be as good as the Tahoe. Even if I subtract the $3k that Gulf States socks us Southerners with, I ought to expect $29.5k trade value. Tell me where I'm wrong.
  • tblazer503tblazer503 Member Posts: 620
    on the "real world trade in values" thread, the Tahoe, as with a few others of the full size truck family are just as good if not better as Toyota. In terms of the minivans, compact truck, midsize SUV, car, etc.... I think that the foreign will most usually be your best bet.

    The whole 3k package is just wrong... IMO.. sounds like they cornered the market on that one... terrible.
  • jlawrence01jlawrence01 Member Posts: 1,828
    You may find one or two classes where the depreciation is less on a domestic vehicle vs. the major Japanese name plates (Honda, Toyota). But across the board, it is not the case.

    Personally, I prefer vehicles with rapid depreciation, especially when they are models that have a good reliability record. IMO, a 2000 Buick Century is tremendous value over a similar Honda Accord or Toyota Camry.
  • masspectormasspector Member Posts: 509
    "Personally, I prefer vehicles with rapid depreciation"

    I assume you mean for you to buy used and not new?
  • jlawrence01jlawrence01 Member Posts: 1,828
    As I buy only used cars for personal consumption, I prefer cars that depreciate quickly but are reliable. There are a lot of those out there.
  • dardson1dardson1 Member Posts: 696
    My original point is that American makers (GM in particular) appear to inflate the prices on their vehicles so they can offer deep discounts and generous rebates. It gives the customer the impression he's getting a heck of deal, the bank the kind of ratio they need to make the loan, and the buyer enough cash in the form of a rebate to make the down payment. What an idea! The only loser in the win/win/win situation is the perceived depreciation tumble the American cars take (on paper).
        I agree the Japanese seem able to make vehicles that run a long time with fewer problems than anyone else. From personal experience, I never found that Mercedes, BMW, or Volvo was any more trouble-free than American makes.
        I'm just saying the creative financing practiced by American car makers distort the depreciation picture. In a perfect world it would be more accurate to compare average price paid instead of MSRP to resale x years down the road.
  • eharri3eharri3 Member Posts: 645
    Sometimes in this argument it really seems like people do compare apples to oranges. It's rather simplistic to take the value of two vehicles in the same segment with the same MSRP, one import, one domestic, and form an opinion on depriciation based their value after a few years without taking into account what they actually sell for new in certain market conditions. On alot of import vehicles you're lucky if you're not being charged MSRP plus an additional dealer markup. So the import may be worth more after 2 years but you also paid MSRP or more at the onset. So how far ahead are you really getting?

    On the other hand, many domestic vehicles with all the rebates and incentives sell for thousands below sticker and in some cases way below invoice cost. Perfect example... I bought my 04 Dodge Dakota Quad for 24K plus tax, tags, and title after 4800 dollars in discounts. The average asking price for 1-2 year old versions of the same model seemed to be in the neighborhood of 20-22K. If I looked back 3 years or more I could get into the high 19s. So I was only looking at at best a 3-4 thousand dollar discount to accept less of a warranty and 20 thousand miles of wear and tear. The first year depriciation hit is huge if you use MSRP in your calculations, but not so bad if you base it on what I actually paid.
  • landru2landru2 Member Posts: 638
    Were you planning on just walking in and paying the asking price for a used Dodge truck? If not, your analysis is just as flawed as the MSRP vs selling price argument.
  • eharri3eharri3 Member Posts: 645
    Which goes to show... the waters can be very muddied here because there are too many variables to make a definitive general statement about depriciation in domestics vs. imports. Are we talking below sticker, or above it on the new vehicles? Are we talking asking price or out the door on the used?
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,114
    With all the talk about Toyota recalls, I thought it might be time to resurrect this discussion. Any change in the outlook for depreciation on domestic vs imported vehicles?

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  • jlawrence01jlawrence01 Member Posts: 1,828
    Any change in the outlook for depreciation on domestic vs imported vehicles?

    Any concerns about quality will likely be offset by the increase caused by the demand for fuel efficient vehicles.
  • kronykrony Member Posts: 110
    With domestic quality improving in the past few years I'm curious to see if resale improves.

    I think a big gap today is the quality of the vehicle at ~7-8 yrs and 100K. Put a '99 Lumina ot Taurus with 100K against the same Camry or Accord. It's a no-brainer since you know the next 100K will likely have less problems on the import, hence the difference in value. So with quality as a whole on par today I wonder what that means 5-7 years from now?
  • gasman1gasman1 Member Posts: 321
    I agree that improved quality should also improve their resale value. However, the deep discounts and fleet sales negate resale value. To garner top resale value, any vehicle needs to hit as many of the following attributes as possible (preferably all).

    1. Reliable - owner feedback from J.D. Power, Consumer Reports, auto mags, newspapers, and word-of-mouth.
    2. Good gas milage for the segment. Doesn't have to be the top.
    3. Solid engineering/construction - crash testing and dependable/reliable. Strong power train in performance and durability. Parts fit inside and out. Decent materials used.
    4. Desirable when NEW and USED. Basic Supply/Damand law. Style, performance, interior quality, and safety all effect this.
    5. Affordable - good value for the $ - doesn't have to be the cheapest, but usually isn't the most expensive.
  • audia8qaudia8q Member Posts: 3,138
    Part of this discussion should include cost of ownership..Remember, nobody knows what a car cost them until the day they sell it....

    Domestics often have significant rebates/incentives which lower the overall transaction cost of the car....

    example: a new Lincoln town car appears to drops a ton in value the day you drive it off the lot...but on the other side you probably got a $10K-$15K discount (which is unheard of on many imports) off the $45K window sticker.

    Some folks will brag that they purchased a $45,000 car and whine that its only worth $27K a year later but they fail to consider that they paid $33K not $45K.... based on the transaction price the depreciation isnt bad but based on MSRP the depreciation is outrageous.
  • snapcracklepopsnapcracklepop Member Posts: 111
    What about tax breaks/incentives.....for example, the Range Rover qualifies for a huge tax break if used for small business use? It changes the overall cost of ownership and makes the RR more affordable
  • pat84pat84 Member Posts: 817
    I went into a Toyota Dealership on New Years Eve, 2003. I had some time to kill, so I went in to look at 4Runners, which I had researched.
    The salesman said he was upset with the Toyota Dealership. He quoted me a non negotiable price. It was $300 above dealer cost. It was over $2800 under MSRP. I took the deal.
    They allowed me more for my Honda Odyssey trade in than I owed on it. (I had just got the Odyssey back after 4 weeks in the shop with transmission problems and wanted to get rid of it.)
    It's not just American brand vehicles that get discounted.
  • oldfarmer50oldfarmer50 Member Posts: 17,795
    The one sure-fire way to avoid taking a beating on depreciation is to keep your vehicle until it has to be towed away to the junk yard.

    My 1985 Ford has over 250K on it and I finally think I have it broken in. ;) That old technology is a lot easier to fix too.

    Today I went out and it wouldn't start. On a new vehicle I would just tow it to the repair shop. Not with my old beater.

    I popped the hood, looked around, found a bad wire, patched it with duct tape and off I went.

    I bet I could still sell it for the $1500 I paid 10 years ago.

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • british_roverbritish_rover Member Posts: 8,457
    Duct tape has metal filaments in it so it is a bad idea to use on electrical wiring.
  • joel0622joel0622 Member Posts: 3,299
    Reminds me of a joke.

    One day this Texan was in TN and he stopped to talk to a guy in hay field. The Texan asked how big his place was and the Tennessean replied he had 150 acres.

    The Texan said "Hell I can get my truck, drive all day, get up the next morning drive all day again, and then get up and do it a third day and still not get to the other end of my property in Texas."

    The Tennessean replied "Ya I used to drive a Chevrolet truck to"
  • british_roverbritish_rover Member Posts: 8,457
    Heheh ok that is a pretty funny one.
  • joel0622joel0622 Member Posts: 3,299
    :D
    i guess it goes without saying the guys at the Chevy store tell the joke a little different then I do. :D
  • british_roverbritish_rover Member Posts: 8,457
    Do you know any backronyms for Chevy?

    I know all the Ford and Dodge ones but never heard one for Chevy.
  • joel0622joel0622 Member Posts: 3,299
    Would I be a Ford man if I didn't? :D
    Chevy
    Cheapest Heap Ever Visioned Yet

    Can Hear Every Valve Yell

    Can Hear Every Valve Yelling

    Cannot Have Expensive Vehicle Yet

    Chevrolet
    Can Hear Every Valve Rattle On Long Extended Trips

    Car Has Extensive Valve Rattle On Long Extended Trips.

    Cheap Hardly Efficient Virtually Runs On Luck Every Time

    Cranks Hard Every Valve Rattles Oil Leaks Every Time

    Crappy Hot-Running Engines Very Rusted Out Lose Every Time

    BTW Kirtstie and Tidester are going to get us for being WAAAAAAAAAAYYYYYYYYYYY off topic :D
  • british_roverbritish_rover Member Posts: 8,457
    That is funny.

    Err on topic...

    Depreciation bad domestics uhhh too many rebates err yeah something like that.
  • oldfarmer50oldfarmer50 Member Posts: 17,795
    "...Duct tape...is a bad idea to use on electrical wiring..."

    I imagine I use duct tape on a lot of things I'm not suppose to.

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • gasman1gasman1 Member Posts: 321
    Off topic - My first experience with duct tape was back in 1975 or so in the Army. It was a dark green tape we called it 100 mile an hour tape and it certainly patched & held a lot of vehicles and other equipment together.

    On topic - Some time next year, I expect my '07 Pontiac G6 with 8K miles (MSRP $22K) to be about the same resale value as my '05 Toyota Matrix 4WD XR with 40K miles (MSRP $20K). I've owned about 40 cars over 33 years and most of them were BIG 3 (American). I guess that I'm growing up, because I don't plan to trade until 2009 where I used to trade one of the three on average of every 8 months. :)
  • blueiedgodblueiedgod Member Posts: 2,798
    Back in 2002-2003 my girlfriend and I bought new cars. I bought a 2002 Honda Civic Si, she bought a 2002 Ford Focus.

    Both vehicles were 5 spd stick, with power windows, sunroof, power door locks, remote keyless entry, air conditioning, cruise control, alloy wheels, both had 2.0 liter engines. Both cost about the same, $14,500 for the Civic, and $15,000 for the Focus. Both were financed through respective manufacturer, Honda had 1.9% APR for 60 months, and Ford was 0% APR for 60 months.

    In 2005 we decided to change to small SUV's.

    I took my Civic to the Honda dealer to trade in on a 2005 CR-V. Dealer gave me $12,500 for the Civic ($20,500 for brand new CR-V EX 5 man). I owed about $8000 on the Civic by then.

    Girlfriend took her Focus to Ford to trade in on the Escape. Dealer offered her $6000 for the Focus. She owed about $8000 on the Focus by then. She ended up selling it privatley for $7000, paid an extra $1000 to pay it off to release the lien.

    Honda Civic: $14,500 - $12,500 = $2,000 for 2.5 years in depriciation.

    Ford Focus: $15,000 - $6000 = $9,000 for 2.5 years in depriciation.

    You make conclusions.
  • british_roverbritish_rover Member Posts: 8,457
    And the sad part is the Focus is probably the best small domestic car right now.

    You probably paid too much for the Focus back in 2002 though.
  • jipsterjipster Louisville, KentuckyMember Posts: 6,064
    You make conclusions

    Well, I would have to question your numbers a bit. But, I agree that it wasn't a wise finacial decision for your girlfriend to sell her Focus. She should have held onto it for another 3 or 4 years.

    I have one for you though:

    8 year old Olds Cutlass Supreme: Paid $1,500...owned 7 years... sold it for $750. $1,500 - $750 = $750 for 7 years depreciation. Not to bad for a domestic huh? ;)
    Was a very nice car when I bought it, not so good when I sold it.
    2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
  • advequityguyadvequityguy Member Posts: 138
    Sure, I'll take the bait and make some conclusions. Let's review.

    You claim that you bought a 2002 civic for 14500 and traded it in 3 years later for 12500. A car that does a very good job of holding it's value should be at about 50% of what you paid in 3 years. If a dealer gave you 12500 for it and intended to resell it, they would have to add a shop fee of at least $500 to the cost. Add that to the standard dealership pack, and you would have about 13900 as the lowest amount they could sell it for to brake even. They would then have to find a sucker, or I mean customer willing to spend $14000 on a 3 year old car that they could buy new for 14500, just like you did. With this logic, If you would have leased the civic, your lease payment should have been around 65 bucks a month, assuming you paid your taxes. If your information concerning resale is true, Honda financial is REALLY taking advantage of the good ole American consumer.

    My conclusion is this: Either your friendly Honda dealership really rang your bell on your CRV purchase, or we're being just a bit misleading with our little parable. I'm thinking it's the latter. Which Honda dealer do you work for, BTW?
  • advequityguyadvequityguy Member Posts: 138
    And buy the way, if you paid 15000 for a Focus, that's gotta be the most expensive freeking Focus of all time.
  • jlawrence01jlawrence01 Member Posts: 1,828
    And buy the way, if you paid 15000 for a Focus, that's gotta be the most expensive freeking Focus of all time.

    While I would not do it, there are a lot of Ford Focus sold for $15k or more. The sticker on a fully loaded top-end model is $17.6k when I last entered a Ford dealership ... and that would be one of the WORST new car purchases.
  • advequityguyadvequityguy Member Posts: 138
    That's what I'm saying. A nice Focus with power equipment stickers for about 16k with a $2500 rebate. That would make it about 13 and a half if you pay full sticker price. If you actually paid 15 back in 2002, I think you set the record, which leads me to believe this story isnt exactly true.
  • british_roverbritish_rover Member Posts: 8,457
    What were programs like back in 2002 though? There might not have been much rebate money on the Focus then or it might have only been towards the end of the model year. He also might have had some accessories put on and is counting those in with the purchase price which he really shouldn't do since they offer zero value come trade time.
  • metro123metro123 Member Posts: 100
    I don't remember the Civic Si's selling for $14,500. Weren't they really hot cars selling for closer to $19,000?
  • british_roverbritish_rover Member Posts: 8,457
    Good point. I just checked cars.com and it lists Civic SI hatchback starting MSRP at 19,000 dollars.

    I doubt Honda had that much in incentives on the Civic back then although I suppose it is possible since the SI hatchback was a very unloved vehicle.

    CIVIC SI MSRP
  • blueiedgodblueiedgod Member Posts: 2,798
    The MSRP on the 2002 Civic Si was $19,400 (invoice was about $17,600). Honda was running a "marketing incentive" to clear out the 2002 Civic's in addition to the 1.9% APR.

    Yes, my Si was listed on the dealer's website for $15,000 within 3 days. I assume they sold it for $14,000, it was gone from the lot a week later, when I went to check on her.

    I almost always buy my Hondas when Honda has "marketing incentive." Right now Accord is a great buy, since with the incentive it is cheaper to buy a brand new Accord than it is to buy a 3 year old used one.

    I bought the CR-V for $20,500, which is about $500 over dealer's cost after you factor in the "marketing incentive" Honda had on the CR-V at the end of March of 2005.

    As to the Focus, the deal was either to take the rebate or get 0% financing. She chose Financing. We are not talking today, this was all done in 2002, when Ford was not in deep red as it is now.
  • blueiedgodblueiedgod Member Posts: 2,798
    Well, I would have to question your numbers a bit. But, I agree that it wasn't a wise finacial decision for your girlfriend to sell her Focus. She should have held onto it for another 3 or 4 years.

    I have one for you though:

    8 year old Olds Cutlass Supreme: Paid $1,500...owned 7 years... sold it for $750. $1,500 - $750 = $750 for 7 years depreciation. Not to bad for a domestic huh?
    Was a very nice car when I bought it, not so good when I sold it.


    I have a better one.

    Circa 1995: Bought a 1985 honda Civic DX hatchback for $1,500. It had 200,000+ miles on the clock. Drove it for 3 years, sold it for $1,600 with over 250,000 miles. $100 APPRECIATION in 3 years.
  • advequityguyadvequityguy Member Posts: 138
    Ah. My truth sensor is tingling now.

    In effect, you chose 0% on the Focus instead of taking the $3000 rebate. In effect, you paid 12000 for your 2002 Focus, but you chose to take a finance incentive because the payments would be lower. Now that makes sense. 3 years later (and unknown mileage), a $6000 - $6500 trade value would be about right, using the ole 50% in 3 years for a car that does a good job of holding value rule. It does not sound to me like the Focus did that bad of a job.

    As far as the Civic goes, something still doesnt sound right. First off, I'm not sure of the difference between MSRP and invoice on a Civic, but I'm thinking its probably a little less than you stated. Normally, low end cars dont have very much markup, but I'm too lazy right now to verify this point. My original point remains. If Civic were going for $14500 back in 2002, and had a trade value of $12500 3 years later, that would lead to some wierd math. First off, that would mean 3 year old Civic were selling for $500 less than new Civics (after you figure in shop costs and pack). I'm not buying that one. Secondly, it would also mean that a lease on a 2002 Civic should have run you about $65 per month on a 3 year lease. I'm thinking the lease payment on one back in 2002 was probably a little more than that.

    I'm going to go out on a limb and make some assumptions as far as the Civic goes. First off, I'm thinking that in reality, It probably cost a bit more than $14500. The dealership may have told you $14500, but I'm guessing there's a couple thousand hidden in there somewhere - perhaps an ad unit? I'm also gonna take a stab at it and say that that same dealership offered you more for trade on it than anyone else, mostly due to tham sneaking an extra couple grand in on the backside of your CRV. Let's face it, though the Civic does a pretty good job with depreciation, there is no car on Earth that depriciates at a rate of $700 per year like you are claiming. Maybe a collectible car, certainly not a production car. And I'm thinking no one is collecting 2002 Civics.

    Pony on up to the bar and admit you were exaggerating just a bit.......all will be forgiven.
  • exb0exb0 Member Posts: 539
    I believe, blueiedgod. My father-in-law just sold Carmax his 98 Civic LX 4dr w/ 60K on the clock for $4500, that he paid $13K for it new. Carmax put it on the lot for $10K. I don’t know how much Carmax sold it for, but I am sure it’s more than 8K. Carmax is not stupid; they flip more cars than anybody else. People are willing to pay stupid money for Civics, because they are just like the Energizer bunny, keep going and going…
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