Why Such High Depreciation?
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Why Such High Depreciation?
I've seen a few comments remarking on the relatively fast depreciation of AMG cars. I was at the local dealer a week ago and they had a new E63 on the lot and as I was walking buy a sales rep said to me "I'll give you that car for $5k off sticker right now."
Why is this? Don't MBs in general hold their value relatively well? Is it because everyone who buys AMG is trying to buy new?
Used Porsches seem to hold their value extremely well, and those buyers have to be at least as picky.
Just to relate it back to this subtopic - I assume the C63 will hold its value a little better, at least initially, since it is a new body style.
Just curious...
Why is this? Don't MBs in general hold their value relatively well? Is it because everyone who buys AMG is trying to buy new?
Used Porsches seem to hold their value extremely well, and those buyers have to be at least as picky.
Just to relate it back to this subtopic - I assume the C63 will hold its value a little better, at least initially, since it is a new body style.
Just curious...
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To give you an extreme example: If the dealer would sell me a new E63 for $50k, what do you think would I pay for your 6 month old 6,000 mile E63? Not sure... but definitely less than $50k. If MB stops making them and the dealer upcharges me $100k for the car, your used E63 just appreciated.
So if the price of new E63s is falling while they sit on the lot, the price of the used E63 you are driving is also falling by that much (in addition to the decreased value due to its being continually used).
All this "zero-down, zero-pct interest" marketing on domestic cars certainly hurt the resale value of the used cars. If its easier to get into a new car, your used car is always worth less.
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It's almost like responding... Yea, henry had that problem too... completely irrelevant.
Here's a more appropriate reply..."There are currently manufacture incentives they give the dealers to help them move last year model cars (assuming it's an new 2007 still on lot). As such, $5K is about a typical annual value reduction so there is essentially, normal depreciation of around $5K/year. Nothing surprising there."
Last edited by ndabunka; Nov 26, 2007 at 03:33 PM.
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SL65
AMGs are very niche cars. Value and AMG should never be used in the same sentance. I'm on my 4th and they all plummet in value at a ridiculous pace. If you're concerned about value you shouldn't be looking at an AMG or really any Mercedes for that matter.
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s500
$5k of sticker on a new car from the start definitely hurts the depreciation of your used car. It works like this: Your used E63 is worth "x" number of dollars less than someone would have to pay for a new E63.
To give you an extreme example: If the dealer would sell me a new E63 for $50k, what do you think would I pay for your 6 month old 6,000 mile E63? Not sure... but definitely less than $50k. If MB stops making them and the dealer upcharges me $100k for the car, your used E63 just appreciated.
So if the price of new E63s is falling while they sit on the lot, the price of the used E63 you are driving is also falling by that much (in addition to the decreased value due to its being continually used).
All this "zero-down, zero-pct interest" marketing on domestic cars certainly hurt the resale value of the used cars. If its easier to get into a new car, your used car is always worth less.
To give you an extreme example: If the dealer would sell me a new E63 for $50k, what do you think would I pay for your 6 month old 6,000 mile E63? Not sure... but definitely less than $50k. If MB stops making them and the dealer upcharges me $100k for the car, your used E63 just appreciated.
So if the price of new E63s is falling while they sit on the lot, the price of the used E63 you are driving is also falling by that much (in addition to the decreased value due to its being continually used).
All this "zero-down, zero-pct interest" marketing on domestic cars certainly hurt the resale value of the used cars. If its easier to get into a new car, your used car is always worth less.
Last edited by jdpfresh; Nov 26, 2007 at 04:02 PM.
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I still don't understand why AMGs depreciate faster than Ms. Is it because of quality, reliability, or customer satisfaction issues? Or is it the economy's supply and demand?....perhaps because I see more Ms on the road than AMGs? Or is it because Consumer Report always ranked most MB (including AMGs) as "worst than average" while most BMW (including Ms)gets "average". Then again, JD's latest 2007 initial quality have MB ranked 5th (behind Porsche, Lexus, Lincoln, Honda) while BMW is 22nd? I believe the reason is because many people are aware of MB's reliability issues from the past decade and won't buy one without a warranty. This forces the market to depreciate the value of the car lower than compared to other car makers. I can speak about myself here.....I will never buy a used MB without any warranty. Just my $.02. 
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i535
AMG is more expensive than regular one, right? People who can't afford new AMG will very unlikely want used AMG, since can buy new car for the same money. So AMG should cost much lower to get their interest. People who can afford AMG are also less concerned about keeping value of their cars. A car is never investment, so why worry?
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People who can't afford new AMG will very unlikely want used AMG, since can buy new car for the same money. So AMG should cost much lower to get their interest. People who can afford AMG are also less concerned about keeping value of their cars. A car is never investment, so why worry?
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2012 Diavel
MB makes more cars than there is "real" demand. The C63 with all it's hype for months before release will be produced around the clock. Demand will cool in 3 months and availabilty will be high. Porsche makes lots of Caymans, Boxsters and Cayennes and they don't hold there value particularly well.
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i535
M3 is different car. It has reputation based on fanbyoism, so owning M3 makes your status whatever condition the car is. Personally I do not like M3, it has almost no back seats, very unpractical. Majority of people do not know what AMG means, so has your car this badge or doesn't it makes no difference.
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No longer car shopping...
If this was true for used AMGs, shouldn't it be the same for Ms? Yet, Ms still have a higher resale value. Cars are never a good investment, but i'm sure it makes people mad when your 05 C55 can only sell for $35K while his similarly equiped 05 M3 can still sell for $42K.
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Actually, the market for M3's has gotten SIGNIFICANTLY softer with the newer model intro. Who will even want a crummy 6-cyl anymore when they can get an 8? A LOT of people ask ridiculous prices for their M3's and then find themselves dropping them until they can get down to the price someone is actually willing to pay for one of them (months later). Try and trade in a used M3 you paid $45K for a year ago. The dealer is only going to offer you $30K. Supposedly, it was used and therefore had already taken the depreciation hit yet here it sees another $15K/year loss.
When a new model arrives, the current model takes a bit hit in depreciation. This applies to every car makes, not just the M3 or C55. Regardless, AMGs still lose their value faster than Ms for whatever reason, we don't know. But not certainly because AMGs build more cars than what the consumer demands.
I agree with you that some sellers ask ridiculous prices for their Ms.
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Well.... You can walk into a MB dealer and get $20k off a SL55, 5-5k off a CLS63, 6k or better off a CL63.
MB has had terrible quality and horrible dealer support for some time, they just started getting their act together. All those bad years has killed the resale value. Who wants to buy a car thats been in and out of the dealership a bunch of times!??
My SL was year old and it went in to the dealer a total of 18 times!!
Be glad you didnt buy a 2005 CL65 new, they are fetching $55-59k at auction... so a $130,000 LOSS for two years of ownership.
The damage that brand inflicted upon itself will take ten years to fix.
MB has had terrible quality and horrible dealer support for some time, they just started getting their act together. All those bad years has killed the resale value. Who wants to buy a car thats been in and out of the dealership a bunch of times!??
My SL was year old and it went in to the dealer a total of 18 times!!
Be glad you didnt buy a 2005 CL65 new, they are fetching $55-59k at auction... so a $130,000 LOSS for two years of ownership.
The damage that brand inflicted upon itself will take ten years to fix.
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02 CLK 55 AMG,09 C63 loaded with P30
I still don't understand why AMGs depreciate faster than Ms. Is it because of quality, reliability, or customer satisfaction issues? Or is it the economy's supply and demand?....perhaps because I see more Ms on the road than AMGs? Or is it because Consumer Report always ranked most MB (including AMGs) as "worst than average" while most BMW (including Ms)gets "average". Then again, JD's latest 2007 initial quality have MB ranked 5th (behind Porsche, Lexus, Lincoln, Honda) while BMW is 22nd? I believe the reason is because many people are aware of MB's reliability issues from the past decade and won't buy one without a warranty. This forces the market to depreciate the value of the car lower than compared to other car makers. I can speak about myself here.....I will never buy a used MB without any warranty. Just my $.02.
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I've seen a few comments remarking on the relatively fast depreciation of AMG cars. I was at the local dealer a week ago and they had a new E63 on the lot and as I was walking buy a sales rep said to me "I'll give you that car for $5k off sticker right now."
Why is this? Don't MBs in general hold their value relatively well? Is it because everyone who buys AMG is trying to buy new?
Used Porsches seem to hold their value extremely well, and those buyers have to be at least as picky.
Just to relate it back to this subtopic - I assume the C63 will hold its value a little better, at least initially, since it is a new body style.
Just curious...
Why is this? Don't MBs in general hold their value relatively well? Is it because everyone who buys AMG is trying to buy new?
Used Porsches seem to hold their value extremely well, and those buyers have to be at least as picky.
Just to relate it back to this subtopic - I assume the C63 will hold its value a little better, at least initially, since it is a new body style.
Just curious...
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M3's drop like rocks also.. When I traded mine in I only got $37k new the sticker price was $58k and it was 3 years old in near mint condition. My dads porsche went from mid 80's down to low 60's in 1 1/2 years of ownership and the car had 12k miles on it.
Reason being is they are expensive to maintain, the engines are built for power and not longevity and they have the most cutting edge electronics and control systems in them and that is more $$$ to fix.. Probably the fastest depreciating car in the MB line up is the S class.
And yes its better to lease a MB or BMW if you are going to keep them less than 4 years period end of discussion. Reason being is the residuals set by both companies are higher than any market value they do this to get the cars moving and make profit since they use their own internal leasing company aka MB financial and BMW financial. My local sales guy told me over 90% of people lease the upper end cars because of this along with most of the clients are also able to deduct the lease expense as a business expense. I was also told that just about every lease car when its returned from the end of lease has the opportunity to be purchased by the dealer which can then sell it as a used car on the lot, but since the residuals are set so high just about all of them end up going to an auto auction which then the dealer usually goes to and buys it for less than the price that MB or BMW financial offered to sell to the dealer at.
Reason being is they are expensive to maintain, the engines are built for power and not longevity and they have the most cutting edge electronics and control systems in them and that is more $$$ to fix.. Probably the fastest depreciating car in the MB line up is the S class.
And yes its better to lease a MB or BMW if you are going to keep them less than 4 years period end of discussion. Reason being is the residuals set by both companies are higher than any market value they do this to get the cars moving and make profit since they use their own internal leasing company aka MB financial and BMW financial. My local sales guy told me over 90% of people lease the upper end cars because of this along with most of the clients are also able to deduct the lease expense as a business expense. I was also told that just about every lease car when its returned from the end of lease has the opportunity to be purchased by the dealer which can then sell it as a used car on the lot, but since the residuals are set so high just about all of them end up going to an auto auction which then the dealer usually goes to and buys it for less than the price that MB or BMW financial offered to sell to the dealer at.
