JWS3

I'm a 4 time BMW owner very disenchanted with BMW's new look and have been considering an E class over the last few months. I've been stepping up my research and noted that the "Galves" wholesale value of even year old E class models is shockingly low. Galves is what all local dealers use to determine trade in value as it supposedly reflects true wholesale cost. If one were to trade a car the Galves book value is what you will get. Forget about Kelly or Edmunds. Nobody, regardless of brand, will give you that.
For example, the Galves value of an average 2004 E500 with "normal" levels of equipment consistently came up around 42-44K. A 4matic version w/ Nav was around 47K. I confirmed these figures with a personal friend at a BMW dealership who was acting as a friend & not a sales drone. Considering that these same cars listed for 62-68K only a short time ago I was shocked. Is this normal? Can anyone shed light on the situation? I am obviously quite hesitant to buy a car, be it new or used, that can plummet in value so far so quickly.

jprescott

Interesting that you say Galves is the book " all local dealers use". When I traded in my S for an E my sales guy got on line to look on kbb and edmunds. I never heard of it. As an auto enthusiast and a frequent surfer on multiple forums for different cars I can't believe I have never come by the term. Is this an industry secret? Anyhow, if residual is the key factor, go to autospies and get their overall rankings. They are really good.

TPAbnz

Take a look at this month's Money magazine. They have their annual depreciation table for all models. The CLK 320 was at the top of the heap for value retention. The MB's seem to equal depreciation on BMW's. The BIG looser in imports was Jaguar.

JWS3

Here in the Tri State area (NY,NJ & CT) every dealer I have ever encountered, regardless of brand, uses Galves, which is a wholesale book not generally available to consumers. Perhaps it is more geographic and limited to the NE. In any event, I checked the site on line even though its a pay site and confirmed the figures. Here in NY if you ever trade a Benz the Galves' value is what you will get. No doubt there are some exceptions, but in my experience in owning or buying cars for others Galves is the rule.

plocjim

In my experience a dealer will try to use whichever "book" or trade in value gets them the lowest price...it still doesn't mean that what they are offering is resale or trade in value unless you let them take your car for that price. I've always been able to get reasonalbe close to KBB or Edmunds, and from what I've seen I have no reason to believe that those aren't fair representations of Mercedes valuen retention. Never heard of Galves either...

JWS3

I did a quick Kelly blue book search and noted a trade value for an '04 E500 equipped w/ NAV, AWD, etc is 45-48K. Wow, that is seriously shocklng. Why would anyone ever buy a new one if they plummet that fast?
Edmunds was the pretty much the same. Wow is all I can say......

sacguy

Mercedes depreciaton is no worse than BMW...they are rated almost the same in retained value but they all drop quickly, especially the first 2 years. The depreciation ranking for Mercedes according to Cars.com and Edmunds for the brand is "Very Good"
and just barely below "Excellent". In comparison to most cars, the MB brand is actually a good retainer of its value. My 2002 BMW 5 series w/ 30k miles is worth $28K trade-in and the MSRP was $52k. Cars are not a good investment, especially new. You can sell a 2004 E500 that MSRP'd at 65k for about $53k, if you sell it yourself. I am buying a new 2005 for $59k (65.5K MSRP), so the difference is about $6k vs. the 1 yr old model with the same equipment. Not really bad as far as car depreciation goes.

rusnakmb

When you get the new car at great discount, do you think the car will hold its value high?

HELL ONA HARLEY

Well.... Since your in the market for a USED e500 you should be happy the resale is so bad (as reported by you)....

chemsales

sacguy-
I am looking to decide on either the E350 or E500 this weekend. Your $59k price, was that directly with a dealer or through a service like carsdirect.com? In the Atlanta market, the dealers don't appear to have any pressure to neotiate (or our southern talk doesn't work!). Thanks in advance for any comments.

sacguy

Rusnak, I really don't understand your point.....please explain. I was just comparing values of 1 yr old vs. new. My point was that the depreciation is really not bad for a 1 year old car compared to other similar makes at 1 yr old. If I bought the same car in Sacramento, I would have paid $2,500. - $3,000. more, different market. I bought it in So Cal because of the good prices and am willing to fly Southwest for $100 and drive it 400 miles back home. The used prices are also higher in Sacramento for private party sales. So for me, I hope it is a good deal.

plocjim

I went to KKB and Edmunds to check this out...Kelly's figured my 2003 E230 ($52K list) at $30K trade in...roughly a 58% residual rate with 37K miles on it. Edmunds had a trade in value of $33.9K, private sale of $35.4K and a dealer sale value of $38.2 - ranging from a 65% to a 74% residual value...not bad at all. Having paid almost full sticker for the car back in Sept 2002 I think it's held its value pretty well...as was said before, no car is a really good investment. The thing about trading in would be not to let them get my car for $33.9 and then sell it for $38.2 - I wouldn't let them make $4K+ on my car for flipping it!!!

Barry45RPM

Galves is the norm on Long Island. However, I notice in your post, you quote the wholsale price, of the car and compare it to the LIST price as new. Few people pay sticker for a Benz, but you should be comparing the negotiated purchase price of the car to the negotiated retail price of the used vehicle, or else compare the dealer wholesale new car price to the wholsale buy back (trade in) price. Also remember a car is a commodity, not an investment. Also remember the dealer makes a profit on each car he sells whether new or used, or he's gone.

You want to see depreciation? Look at list price of a Caddy Seville new vs trade in. (The STS is too new to have any trades listed) Lexus, MB, BMW & certain Infinitis keep a great deal of residual value.

Cars are NOT an investment. Real Estate is.

allenjdmb

Black book is usually the relied on source, combined with looking at the recent results from Mannheim auctions (MMR). Fact is, after neary 30 years of being in and around the industry, that all these books say on the front what you need to know:
"GUIDE".
A car in the right color, with the right options, and no issues will always bring more. Edgy or average cars will usualy be well under the book. My dad always said, and I agree, that you can hardly pay too much for a nice one (within reason) and you can't buy a rough one cheap enough.
BTW, I have an 03 E500 with Sport and good options FS in the ATL area, if someone's looking.
Hope this helps.

TPAbnz

Here's a European angle on MB value retention:

http://www.mbnz.org/news/news.asp?id=270

rusnakmb

Hi,

What I mean is when MB were giving incentives to W211, it will also affect the used car price on book value. FOr certain model car, it holds the book value, but other are back of book... and some by far

konigstiger

The fact is cars depreciate, even MB. However if purchased new at well below invoice, and you either sell privately or negotiate trade-in favorably, you can hedge this investment substantially.

JWS3

Here in NY I have yet to find any dealer who will sell for even 1K over invoice, must less "well below it". Must be a different market out your way. Even if I compare an average area selling price to the wholesale value, which is pretty much exactly what one would get on a trade, I'm still a bit nervous. Assuming a list of 68, with a sales price of 64 and a 1 +/- year later trade value of approximately 47 that seems like a major hit.
I am likely to drive a used '04 E500 4matic this weekend equipped w/ Nav, and various packages including Entertainment, appearance, heating and the panoramic sunroof. They want about 60 for it, but with a current wholesale value of 47 I wouldn't pay more than 53-54. At most. I am hoping this is in line with current value. If not then I walk.

Barry45RPM

I got mine for a grand over invoice, & it was custom ordered for me. Of course I had to go 2 hrs to PA. If you need a referall PM me.

hoffyvortex

JWS3-
The market in So Cal may be different than yours -it is highly competitive. I got my E500 AMG sport for $4200 below invoice (this is about $9,000 off MSRP). It is important to time the purchase correctly to take advantage of mfg marketing money and incentives - (I got mine on January 3rd, the very last day the dealer could book the sale for 2004, and also the last day of the major MB to Dealer incentives). The incentives are not always available, for example, there are none right now on the E500, but the 320 still has $2500 cash to dealer when financed through MB credit. There are additional incentives available when leasing through MB. The incentives vary, but you will find them to be better towards the end of each quarter, and best at the end of the year, or just before they introduce a "freshened" model.

Kerr

yes they both drop like a rock... Figure on loosing 15-20K the first year on in a mb.. granted that does not work on the c class..

Compairing them to a bmw in value wise they both drop about the same. only difference is a mb will slow down on the drop in value after a few years.. look at say a 2001 740/500 vs 2001 S500/600 and you will see what i mean.

So to answer your question yes they drop in a hurry. my 02 G500 with 38K miles is worth $43,000. it was $75,000 new. so i have lost $32,000 in 38K miles which is like $.85 a mile..

Buy used if you can.. the world if full of very weathly people that trade MB on new mb every few months just because they can. If you look on auto trader or e bay you can usually buy a car $20K less than window sticker with less than 10,000 miles on it.

DavidNJ

I'm a little late here, however MB depreciation is the same as everyone else: 20-25% of the market value per year. So low 40s is probably about right...at least wholesale. I think you will find all the competition close to those levels also.

Options don't hold their value. So if the base price of an E500 was $58k, and the optioned price is $65k, those options may only add $2k to the used price.

While a salesman may trot out Galves, the used car manager will go online with the Manheim auction. The idea that someone would pay thousands of dollars based on old printed info in the day of the Internet! (the Internet, invented by Al Gore and made plural by George Bush).

The only deviation being a trade for a car that can be 'certified'. So that would be a low mileage model of the same make (MB at MB, BMW at BMW, Lexus at Lexus, etc.)