Something that's bugged me for years that I am sure folks on here will know the answer to....
We all know that second-hand German cars retain a good percentage of list price compared with most other makes. But what is this based on? If a particular model is said to retain 58% at 3yrs/36k, is that figure simply based on the basic spec/list price for that model? Or does it take account of the extras too? Reason I ask is that I wonder if the retained values are really that great, if the £1000s of extras often fitted to these models is simply written off then they are not the great value buys that the figures would suggest.
I'll except base Golfs from this, 'cos people will clearly pay through the nose to get one of those things second-hand even when it has zero equipment!
Hope the question makes sense... :)
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I've found that optional extras count if you are buying a car, but aren't worth much if you are selling one :)
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As I understand things, the comparative retained value (as a %) will be distorted if it is based on list price. I'm aware of some Mondeos having a higher list price than an equivalent Passat - but then they are sold with a bigger discount. I get the impression that, in general, German cars are sold with less of a discount.
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Everyone measures depreciation as a percentage of list price and frankly I think this is rubbish.
On paper, a £30k BMW 330i is FAR, FAR more residually sound than a £24k Mondeo ST220 (We'll leave the fact the 330i is a better car for now).
But in reality, you get the Mondeo for £18k anyway from a broker and even if you didnt, 40% of 24k is less cash than 50% of 30k or however much it is.
You dont buy things in 'percentage' you buy them in cold hard cash so surely the amount it'll lose in cash > some random percentage.
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The exact same argument is made in Autocar - 23 August 2006 - pages 64/65 - "miss out on a must-have option...the car it's attached to could be worth less than you think". "..the used car market demands a high specification on most prestige marques...", etc.
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As HJ and others regularly point out, one way to get serious tin for silly cash is to go for the 'wrong' specced car at auctions such as a big Merc with cloth and manual box. Ordinary punters just not interested.
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There was an interesting article in Autocar about this very subject - they compared a Merc C180 Classic vs a Citroen C5 1.8 Design - may not seem obvious rivals but are infact similar sized cars that can do much the same job as pointed out in the article.
Anyway, on their workings out all they did was subtract the projected value after 3 yrs/36k from the price you will have likely paid at the showroom ( they reckon you can get £1500 off the Merc and £3800 off the Citroen ), in the end, the loss on the Citroen is £6941 and £9660 on the Merc.
Makes interesting reading.
They also did a comparison with the Hyundai Coupe 2.0 vs Peugeot 407 Coupe - Hyundai loses £4730, Peugeot loses £10,872.
So if expressed as just pecetages, then yes, certain german cars do better, but more often than not, the cars who loose less as a percentage are loosing less of a much higher amount, so in real terms, loose more cash value.
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Id like to point out that my Mazda cost me £200 so my car must be one of the least depreciating cars you can buy? :-) And dare I say, far better built and reliable than a C-Class Merc!
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The p/x offers I had on my previous Pasatt were rubbish. I even challenged a VW dealer about his offer and the alledged positive residuals and he just 'smiled'!
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