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      09-18-2008, 04:08 PM   #8
scollins
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Drives: 2015 F15 X5 35i
Join Date: May 2007
Location: Renton, WA

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Quote:
Originally Posted by torino2005 View Post
My issue is solved, but the point I wanted to make, is to highlight the strange BMW price depreciation, contrary to my previous believe it seems leasing is the best option, even with out of lease risk, mods and extra mileage.

Thank you for all the informative replies.
The problem is you are trying to compare what you paid "Retail" to what your car is worth as a "Trade In." Basically, the dealer sells you a car at "Retail" (whatever you paid is Retail, not to be confused with MSRP) but buys them back at "wholesale."

The dealer isn't going to give you what the car is worth at retail, because then they wouldn't make any money. They buy cars at "invoice" or "wholesale" from BMW, so they aren't going to give you more for your trade than what they could buy a brand new one for.

What you need to compare is how much you paid for the car vs. what you could sell it for as a Private Party (sell it on your own.) I know you are in Canada, but KBB.com and nadaguides.com should give you a good idea.

For example, running my car through KBB.com yields the following "Private Party Value" - $36,335. I paid $45,100 for the car, so in 16 months I've lost
$8,765 (-19.4%.) Using the "Compound Annual Growth Rate" formula except in months, which is CAGR = [(ending amount / beginning amount)^(1 / # of months) - 1] yields a montly depreciation average of -1.3%. That isn't really that bad.

If I try to compare it to Trade In Value, it is down another $3,000, or -26%. And that assumes that KBB.com is right. With more and more high end cars just sitting on the lot unsold, dealers are less and less likely to want to take on additional inventory in used cars.

Of course, the bulk of the depreciation is at hour 1, when you drive it off the lot, but over time, the depreciation starts to level out.
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Scott
2015 F15 X5 35i, Space Gray Metallic
2011 Toyota Tacoma TX Pro 4x4 DC, Super White
2008 Ducati 1098S. Red naturally....