Christien

OK, we all know depreciation in a car sucks, but it was really hammered home to me today. I was working out financing details for a Ford F250 diesel, and looking at residuals after a 3-year term. We were looking at 2010s and 2011s (used). Price of the 2011 was $56000, price of the 2010 was $44000, difference of $12,000. The residual on the 2011 was $32450, and on the 2010 was $28900, difference of $3550. So that's an extra $8450 in depreciation that it costs to drive the 2011 vs. 2010 over 3 years! And that's not even from brand new, which is $67720, before adding any of the options.

JimV8

The number one cost of operating a vehicle is depreciation. By far. The larger and more costly the greater the cost. IMO the best way to reduce the pain is to buy the best you can afford, maintain it well and keep it forever.

Andy E.

Not to mention that the mfr's profit margins on these big trucks are phenomenal as compared to the more smaller and popular cars.

Cadillac still manufactures their high-priced Escalade in Silao, Mexico yet charges a whopping $90K for this truck.

PbPedis

Depreciation is the story of my life. After taking a huge hit on my 997 C2S and 997 Turbo, both of which were bought new, I've decided never to buy a brand new high end car again. Let someone else take the hit, then buy it from someone like me who gets bored of cars and flips them on a regular basis.

Christien

Or buy vintage and skip the depreciation curve altogether!

Torontoworker

What blows me away is people are financing a LOSS when you talk of depreciation on an out right new buy! It's not like the car payments are going down by a reduced factor each year to match the reduced value. Crazy. If people had to stuff bills in a coffee cup while they drove to work every day to cover the cost of their depreciating asset (use of the word assets is a joke here!) they would never complain about the cost of gas. But people don't think about that - they are too busy bitching about the cost of the 407 per km as they drive along not realizing the loonies flying out of their pocket every km or while your car is parked in the garage and your sleeping - the value keeps melting away to next to nothing after five years. Asset my a$$. New = Nortel stock with wheels.

Christien

In fairness, I think a lot of people look at it like long-term renting - they're happy to pay the monthly fee if it means never having to worry about repairs and maintenance, and always driving a less-than-3-year-old car. If your income supports it, and you consider it a worthy monthly expense just like anything else (phone bill, hydro bill, etc) then it makes sense.

Farfelc2s

Don't finance, Lease w walk away after term.
After 3yrs, Avg American cars depreciate 45%.
the higher % the buyback, the lower the monthly payment.
Warranty shouldn't be less then term, or u might pay to fix their car.

PPo

Regardless if your income supports it, if you have the means, buying cheap cars is a great way to save your money for other things... If you take the Porsches out of the question, the most I have every spent on a car was $7000. When my wife was working, she had a car allowance, a gas card, and we still went cheap... bought a broken Mercedes 300TE wagon, fixed it, and ran it 7 years for a total cost of $9500, including the car (without gas of course)! The Mercedes now has well over 360,000kms, and we are replacing it next week with a BMW 5-series wagon that we bought way to cheap to even mention the price.

Our approach is that if you shop well, you can find cars the are inexepensive, and even if the cost of the extra maintenance seems high, we save a tonne of money year over year... even on insurance! Now some people can't get around the fact that they are driving older cars, it does not have the status of something shiny and new, and it requires more maintenance, and I get that... so I consider us lucky!!

PbPedis

That's fine if you only consider a car as a means of getting from A to B, but that would not qualify to most on this forum. However, that still doesn't mean you have to break the bank. As mentioned in my post above, I only bought new cars in the past but I've been flipping them quite often recently and it is downright stupid to buy them new when you do that. Let the first guy take the majority of the depreciation hit and buy used.

IXLR8

Depreciation doesn't enter my equation. I bought my car new and will drive it till it drops. Its in its 12th year now and I expect to easily get another 6 years of use out of it.

IXLR8

Well they still have to maintain it according to the manufacturers recommendations.

As for repairs, I once knew someone who bought new and traded their car in every 2 to 3 years because of fear of repairs. Of course they bought a NA POS. Buy a quality car and repairs are minimal.

Christien

A lot of lease deals are now coming with free oil changes. Other than that, you may never hit a scheduled maintenance within a 2 or 3 year lease, so really, there's no maintenance involved at all.

There's no doubt there's tons of money to be saved, all I'm saying is that some people don't think of it that way, and are happy to pay extra $$ for peace of mind and the ability to always drive a new or near-new car.

PPo

I don't consider cars as a means of getting from A to B, and I was certainly not suggesting that one should give up thier love of well engineered, pleasure to drive, or fun to drive cars simply to save money... all the cars that I purchase inexpensively are still very nice cars, the point is that I don't mind buying something that is 10+ years old that had a blown transmission or a leaking head gasket. A few years ago I was a very close to buying a Ferrari 348, for a bargain price, because of the situation that the seller was in, and the price he was quoted for a full brake job and replacing front struts. I had the cash ready, but his "mechanic" offered him a bit more... a low priced Ferrari is still relatively expensive for what you are getting. Cheap to buy, VERY expensive to own... and certainly not an A to B car.

I realize that I am on the other end of the depreciation spectrum argument, and few will agree with my approach. That is the choice I have made. But I still reserve the right to walk into a Porsche dealership and buy a brand new GT3 if i change my mind!!!

Bill 86.5 928s

Bought new once and will never do it again....that being said I found Consumer Reports to be the best investment as well as the internet.........just my 02 cents