Resale value

[erikrichard]

The resale values of these trucks is so horrific I really wonder how GM sells any of them - yes, I realize many other vehicles have similar resale values. I was browsing the CL for nnbs Tahoes just to see what they are going for, and came upon several like new low mile 2012s priced in the mid '30s. These were fully loaded, which had msrps of high $40s. Then, the owner had to pay (in my area) around 8% tax on that amount. Assuming these buyers didn't pay out the nose for financing, that's around $20k spent just so they could drive a new Tahoe for 1 year - twice as much as I paid for my low mile, near perfect condition '02 Yukon SLT last year. Speaking of which, the truck I bought was a one owner vehicle that cost low $40s new back in '02 with all the options it has. So when you factor in 5 year financing costs plus the sales tax he spent about $40k to drive this truck for 10 years, not including repairs, maintenance and gas. The vehicle I owned prior to this was a fully loaded '02 Town & Country awd. I also bought it from the original owner, who handed over the original receipt and, no shit, about $7k in repair receipts. She paid $44k, plus the $7k in repairs, plus whatever finance interest that cost her only to sell it to me 8 years later for $6000.
This concept is so foreign to my way of thinking. What on earth possesses so many to sign up for the depriciation hit of a new vehicle? lets not count the millinaires that write a check for it, the vast majority are normal working stiffs that finance most or all of the purchase price. I'm really curious, what is the mindset here?

 

[OmarR]

I'm really curious, what is the mindset here

I want it and I want it now.

 

[ebxgsxr]

that's why i will never buy a brand new car. lol.

 

[erikrichard]

What blows my mind is every vehicle on the road was new once, we are talking a huge number of people willing to take on these losses each year. I'm not including the people buying certain Hondas, Toyotas and budget cars like Ford Focuses etc that actually have decent resale values. Just those buying luxury, $40k+ money pits. I understand there are those who act on emotion and immaturity ("gotta have it now"), what I don't get is the sheer numbers of those who do.
I guess some things will always be a mystery to me, and I'm certainly not without fault when it comes to spending money, I just don't make (what I think of as) such huge financial mistakes.

 

[91RS]

Here's the thing. If no one buys the vehicle new, how are you going to buy it years later used?

The mindset is: I'll always have a car payment so I'll just keep burying the difference in the financing.

 

[erikrichard]

That's one of the big disconnects for me. I've never financed a vehicle, I drive what I could easily afford to pay cash for at the time, and I look for at least a couple weeks before buying. However, for those who don't seem to mind car payments - why not finance a lightly used vehicle? there are many used '12 and '11 Tahoes out there, close to $20k discount over brand new. Is having your ass in the seat being first worth that much? What I'm stuck on is how this system works in the first place, and yes I'm very grateful for so many willing to by new, I understand that's what enables me to buy such nice vehicles so cheaply. It requires so many willing to throw away so much money at the start of the process, even though they have so many options to avoid depreciation.

 

[Rockytfox]

A large number of vehicles on the road are/were rentals, fleet vehicles (company cars), government vehicles, etc. Not all the new cars are purchased by consumers...

 

[erikrichard]

Good point. There are also leased vehicles, which seems slightly less of a financial meltdown than suffering new vehicle depreciation. Still nothing I'd ever consider in a hundred lifetimes.

 

[yates ™]

I just bought a new diesel and after looking at new prices it want much more to get new on the other hand bought a used Yukon before this and still lost my ass. The difference is if you buy a mass produced vehicle like a GM SUV as an example you will not retain value.

 

[07Burb]

I just bought a new diesel and after looking at new prices it want much more to get new on the other hand bought a used Yukon before this and still lost my ass. The difference is if you buy a mass produced vehicle like a GM SUV as an example you will not retain value.

This is why I will never buy brand new and why I only buy vehicles when I'm getting a GREAT deal. I let others take the huge hit on depreciation. We've had our burb for 2 1/2 years now and it's just NOW getting to where its worth what we paid for it.

One thing will be true for 98% of all motorized items. They will go DOWN in value and you can count on that. Doesn't matter what it is and the higher the price the harder it'll fall.

 

[yates ™]

I don't agree with that at all, the more mass produced the more the value will go down also the more incentives n a new will affective the resale also. The reason these suvs lose so much value is that there is so many available that they cannot be sold for a high value.

 

[07Burb]

I don't agree with that at all, the more mass produced the more the value will go down also the more incentives n a new will affective the resale also. The reason these suvs lose so much value is that there is so many available that they cannot be sold for a high value.

I'm not aware of any brand new vehicle that doesn't lose value immediately after purchase outside of possible some exotics the vast majority of new vehicles will lose 40-50% of their value within the first 4 or 5 years of ownership.

 

[yates ™]

There is several vehicles and the bulk of them being exotics. I didn't buy a used diesel basedon the fact that the used ones didn't save me much, gtos are another example they are selling for near or more then they could have been bought new. Why?They didn't sell many and for 3 years. You can't lump every car in a blanket statement like that.

 

[2011Tahoe]

I bought our Tahoe brand new because like Yates said above, if I would have bought a used one it would not have saved me any money(maybe 2-3k) but it also would have came with 30-40k miles on it and for it being 2 years old or so that it wouldn't have been worth it for me. Guaranteed the previous lessee doesn't take care of there rigs like I do. And I would not have been able to get 0% interest.

Be happy that people buy new you can reap the reward.

 

[07Burb]

There is several vehicles and the bulk of them being exotics. I didn't buy a used diesel basedon the fact that the used ones didn't save me much, gtos are another example they are selling for near or more then they could have been bought new. Why?They didn't sell many and for 3 years. You can't lump every car in a blanket statement like that.

There's a reason i said "most" and exotics should be excluded from this discussion...

 

[yates ™]

Where do we draw the line on exotics? No matter what I say still stays true.

 

[erikrichard]

I bought our Tahoe brand new because like Yates said above, if I would have bought a used one it would not have saved me any money(maybe 2-3k) but it also would have came with 30-40k miles on it and for it being 2 years old or so that it wouldn't have been worth it for me. Guaranteed the previous lessee doesn't take care of there rigs like I do. And I would not have been able to get 0% interest.

Be happy that people buy new you can reap the reward.

I'm seeing several used loaded '12 Tahoes for mid $30s that started with msrps of $50k, what am I missing? are loaded Tahoes being discounted to below $40k? that would be thousands under invoice.

 

[yates ™]

Probably pretty close to $40k

 

[2011Tahoe]

I'm seeing several used loaded '12 Tahoes for mid $30s that started with msrps of $50k, what am I missing? are loaded Tahoes being discounted to below $40k? that would be thousands under invoice.

Yeah they may be in mid 30k but how many miles are on them?

 

[afpj]

We got our 02 yuk new over 10 yrs ago to
Minimize trips to the shop. We've owned a couple used cars before that required multiple trips to shop, and buying new gives my spouse peace of mind which is priceless. Our newly bought cars have always had a much better repair record than the used ones. Our 2 pesos...