Sold At a Steep Discount - 2014 BMW i3 Long-Term Road Test

Edmunds.com

Sold At a Steep Discount - 2014 BMW i3 Long-Term Road Test

After an entertaining year in the 2014 BMW i3, we return to the stark reality that alternative fuel vehicles have poor resale value.

Read the full story here

daryleason

And this is why I don't recommend EVs to people. At least not new. You can get an ICE car for at least 2/3 of the cost that'll get 35 mpg or better, and it'll still have a better resale value. Frankly, value-wise, ICE is still the leader. Diesel follows closely behind, except the increased fuel and service cost hurts it long-term, although the higher resale value helps make up the difference. Plenty of people think "200,000 miles is just breaking a diesel in" when they go to buy.

iamthestig

Why didn't the $7,500 federal tax credit figure into your calculation? That would have given you a depreciation of 35%, and it would have been in line with other i3 owners who also received the federal tax credit.

desmolicious

So are you going to correct the TMV and adjust it down from $33000 to $26000?

banhugh

Good riddance!

ebeaudoin

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

desmolicious

ebeaudoin said:

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

They must be using Edmunds' TMV.

moridin2

Depreciation should be based on the cost you paid for the vehicle, which is $10,000 less than the negotiated price with the two incentives (Federal and CA state). That is representative of what everyone pays for the vehicle on the market at the moment. It is also the reason why the residual value is so low, because it represents a relatively normal depreciation from the low initial purchase price.

ebeaudoin

moridin2 said:

Depreciation should be based on the cost you paid for the vehicle, which is $10,000 less than the negotiated price with the two incentives (Federal and CA state). That is representative of what everyone pays for the vehicle on the market at the moment. It is also the reason why the residual value is so low, because it represents a relatively normal depreciation from the low initial purchase price.

An interesting argument. However, it's difficult to track, because vehicle transaction prices aren't public record, like, say, a house or property. If there were a way to see how much the previous owner paid for a vehicle and then base the depreciation and negotiation off of that, I know I would be interested to see.

kirkhilles1

The cost is understandable given the complexity and battery cost, but lets face it, a 5 series starts at $50k (although I'm sure it goes to 2x that knowing German vehicles) and this car doesn't look like a higher-end BMW. But, of course, depreciation is a 2 way street just like anything. Buying it at $25k might be appealing, presuming that maintenance and repair costs were reasonable.

throwback

No surprise EVs have terrible depreciation. The second buyer doesn't get the tax credit, so would you buy a $33,000 EV? Assuming these cars are durable, an off lease 3 year old i3 may make more sense if you have to have one.

cameronr

ebeaudoin said:

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

Yes, this is the i3 we sold to CarMax

longtimelurker

cameronr said:

ebeaudoin said:

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

Yes, this is the i3 we sold to CarMax

So, Cameron...why is your proprietary TMV so far off from reality?

bankerdanny

longtimelurker said:

cameronr said:

ebeaudoin said:

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

Yes, this is the i3 we sold to CarMax

So, Cameron...why is your proprietary TMV so far off from reality?

I'm sure its because the comparable data set is small. The fewer data points the less accurate the prediction.

darthbimmer

throwback said:

No surprise EVs have terrible depreciation. The second buyer doesn't get the tax credit, so would you buy a $33,000 EV? Assuming these cars are durable, an off lease 3 year old i3 may make more sense if you have to have one.

For this car I would compare any used price to $40k new -- the full negotiated price minus the tax credits. That means $33k represents a savings of $7k/17.5% versus new. Is that enough to justify buying lightly used? It seems about par for the course; fair but not great. Normally I would go for a slightly older car when buying used. Like you suggested, I'd look for a good condition 3 year old, and I'd aim to save 40% off new.

gslippy

This site always expresses surprise that its proprietary TMV calculator is wrong.

desmolicious

bankerdanny said:

longtimelurker said:

cameronr said:

ebeaudoin said:

http://www.carmax.com/enus/view-car/default.html?id=12801268&AVi=1&No=0&Rp=R&D=90&zip=60014&N=4294963045+4294959325&Q=6afc2770-5737-4dc0-a7ab-a40ae8a9fdea&Ep=search:results:results page

Is that the car? They clearly listed it with a $6,998 profit margin so they can incrementally discount it and still turn a profit. Very interesting.

Yes, this is the i3 we sold to CarMax

So, Cameron...why is your proprietary TMV so far off from reality?

I'm sure its because the comparable data set is small. The fewer data points the less accurate the prediction.

But this is part of the data set. And it seems that the data is ignored.
Either correct the TMV, or require a sufficient population size before publishing a TMV.

ebeaudoin

Or look at auction reports, because that's what a used car buyer/dealer is going to look at.

ryster

iamthestig said:

Why didn't the $7,500 federal tax credit figure into your calculation? That would have given you a depreciation of 35%, and it would have been in line with other i3 owners who also received the federal tax credit.

Not everyone qualifies for the entire $7500 tax credit. If your tax liability is less than $7500, you can only claim up to your actual tax liability. The tax credit is also non-refundable (you do not get the difference if you only use, for example, $5000 of the credit) nor can any difference be applied to future tax liability. Everyone's situation is different. High income buyers might be able to use the full $7500, where as lower/middle income buyers might not be able to claim the full $7500. Therefore, the tax credit's impact on depreciation will vary by buyer.

casey912

Huge percentages of this car were leased, not purchased. We leased. Our reasoning was that EV technology is just moving too fast. That said its a very good lease price for us and a very nice discount for whoever buys when we turn it in.