Johnny Rad

Why don't our W212's do better on depreciation? Seems to me it's below average, which I benefited from on the used car market thank you very much.

It's reliability is noted by multiple sources to be better than average. If it were a service nightmare, I could see it being a reason - but, it's not (unless folks discount those sources).

What are your thoughts? Am I off-base? What am I missing?

Thanks

Peachy

I don't really watch depreciation of other cars pretty closely but it does seem pretty bad for these cars. Brand new (I'm guessing) my car was like 70k, I bought it at 5 years old for 22k, 1.5 years later (now) they're going for like 15k. It's pretty bad.

davidjohnbamber

IMHO this is a first world phenomenon that we are being forced to endure. If you were to frequent some BMW/TESLA, etc forums you will see similar threads for the same issue.

kajtek1

I bought my 2014 E250 for 17 grands, so can't complain.

The G Man

Depreciation is based on supply and demand, since there are plenty of MB out there for sale, the supply is out-pacing the demand. The other factor is the new car sales price, most mainstream MB model are sold at a deep discount, therefore, the resale value will reflect that as well.

KEY08

^. I concur with that.

homeofstone

Many people cannot afford the high cost of repairs on high end luxury cars, so the demand is lower.

kajtek1

When high repairs cost sure drop the car values, bare in mind that technology gets cheaper and better on monthly basis those days.
My broker is still brushing the fact, that back in 1960's he come to California Bay Area, bought a house and bought new Mercedes.
His mortgage and car payments have been the same.
I custom order Ford truck last December and took delivery of 2017 model this year. When 2016 trucks had GPS as $700 option, the 2017 voice-recognition GPS is $560 and all total, the new aluminium truck is cheaper than 1 year older steel one.
I can only see how badly 2016 trucks depreciated.

VegasE

One primary factor for depreciation is the % of cars that are leased and most new E series cars are leased. This leads to a flood of low mileage off-lease cars hitting the market monthly. The SoCal dealership where I bought my off-lease E350 has 1000 lease returns a MONTH!!! That is all models not just Es. That is a lot of used cars to move and they send the majority to auction which drives down prices. IMO it is financially foolish to buy a new E when you can buy one that is 2-3 years old and about 15K miles on the ticker for about half of MSRP.

pjw1967

Saw an article that Infiniti is up to their door handles in G50's coming off lease, at a time when buyers want SUV's. The best selling vehicle under the Nissan brand name is the Rogue.

Lolxa

Hello, didn't think the depreciation was bad on our E classes, but I do have a 2010. I purchased it at 28k about 1 year, 3 months ago. Just looking today around between online sites, (Kijiji, Autotrader), its still holding at 27k-29k. These are Canada prices in province of Alberta though, as what I see, our prices are significantly higher than the states.

fintail

Like other say, I think there are a couple factors at work, namely inflated MSRPs, and high sales. Nobody pays near MSRP for one of these, so you can "depreciate" 10-15% or more before you put a mile on it. Then, as mentioned, when the lease returns flood the market with nice miles late model used examples, the market gets to set the real price. These are cars to either buy and hold forever, lease, or buy off-lease, don't trade one in every few years.

Johnny Rad

Great stuff. Thanks for sharing your thoughts.

You've reminded me that the W212 had a good run and Merc has transitioned to the W213. During the last ~7yrs, Merc sold a lot of the W212, apparently had a history of aggressively dealing on new ones to get them off the showroom floor and especially so in the latter years, plus is dealing with a glut of lease returns in an era when cross-overs are king.

Furthermore, I think the W212 suffers from a poor perception of its reliability despite data indicating otherwise.

Finally, I don't think lux auto cars ever hold their value very well (Lexus used to excel here, but everything below their top tier LX and LS seems to be suffering now).

baybombers

Completely agree.

ysr_racer

Most cars lose about 50% of msrp at the three year mark. When you lease a car, the three year residual is usually 55%

cetialpha5

That's why they're great to buy used especially ones with lots of options, they don't really add that much to sale price as some options aren't even listed in the book.

It must be really buried in the financials, but I think they must take two hits when doing car leases, the initial lease incentives and then another hit when the residual is higher than what they get at auction. Maybe they make up for some of it with all those one time lease fees when buying it and disposing of it.

JALLEN4

Someone is not giving you real facts. No dealer is going to lease every car sold. To get a thousand a month turned in, they would need to be selling 1500+ new a month or 18,000 a year and they are not!

None of the lease returns belong to the dealer. They all belong to the lease company and it is their responsibility to sell them. The dealer will have an option to purchase the return but are not doing so to take them to auction.

chipmjohnson

Depreciation is a reality that effects higher end cars $$ for $$ just about as much as lower end cars. Just the impact to ones bank account is more.

The fact that just about any car (rare collectables as the exception) its a depreciating asset. When you finance the price and the tax/tags, you only compound the problem. Most borrow money and pay some type of interest for something that will be worth less tomorrow than today.

Leases tend to make things worse for one reason - the leases are almost always for cars at the lower option/price point for any manufacturer and make. Thats what gets people into the dealer - they payment.

So the leased strippers help set the resale values. Any additional options on a car are just about worthless.

I think someone mentioned, if you are patient and can find one of the hand full of cars leased fully optioned after they are turned in, there is your value.

Any cars are an expense, nothing more, nothing less. Buy them right and you loose less money. Not much more than that. Keep them long enough, regardless the make, model or miles, they all end up just about worthless.

I have owned Audi, VW, Lotus, Corvette, Hyundai, etc and outside of the corvettes (when purchased right) and the Lotus (rare collectable) they all depreciated at about the same rate. I have never bought anything new, just 1-2 yr old with 20k or less. So my hit is less, but regardess what I purchased, its resale value is less than I feel and less than the life it has remaining.

ysr_racer

You guys talk about deprecation, but if I buy a two great old car for $30,000 and sell it a few years later for less, I'm ok with that because I've gotten the use out of the car.

You have to pay to play.

kajtek1

For years, when I was buying older MB diesels and bringing them to California, I always sold them for more than purchase price.
Usually 2-3 years of use and still make money.
Now I can cry I sold my 1985 300tdt for $3000 about 15 years ago.
Nicely kept they sell for 5-digits today.

cetialpha5

MB sold about 340k vehicles last year in the US and they have about 380 dealerships. They sold about 123k CPO cars. That 1000 a month might be a stretch unless it's one of MB's biggest dealerships and that represents a really good month that was rounded up, not an average number every month. That can happen with a new car launch where everyone leases the car at the same time so they end up returning them at about the same time. Or the dealership has multiple brands and that's the total including other brands.

http://www.prnewswire.com/news-relea...300385664.html

As for whether a lease is good or not, you always have to look at the lease terms and the incentives they offer. Some incentives aren't offered on purchases and a $2000 discount on a 2 or 3 year lease has a greater effect on the monthly payment than on a purchase. They also offer low money factor rates and if the residual is artificially high, which is normally the case, the manufacturer takes another hit when they get a low price at the auction. A lease without any incentive probably isn't a good one, but not everyone ends up in one of those.

kajtek1

I never had a lease, but my take is that it is the option for some people, who want nice car without repairs worry and money is no object.
I was 3rd owner of very loaded wagon once.
1st owner leased it for 12 months.
I can only wonder what was his monthly cost.

sleeperZ96BT

And it's only going to get worse with the glut of cars (new (with high incentives to move them) and off-lease cars) that are going to be hitting the market..........I bought my 2013 E550 a year ago off lease for 50% of what it stickered for new. I paid more than I wanted but I wanted a pre-facelift bi-turbo and they are hard to come by here (E550's in general).


A quick look shows it cost me ~$5k in depreciation for the 8k miles I put on it in year one. I think I am ok with that given the enjoyment I get out of it and that my maintenance is prepaid as part of the purchase price so no cost beyond depreciation at this stage.

blegthbloo

This is my situation as well... although I've put about 16k miles on mine since Feb of last year, so my depreciation is probably more. Buuuuut then I tell myself it's about the Smiles Per Mile that makes it worth it in the end. Plus, I think this is my favorite car I've owned to date and I hope to run it to the ground in many tens of thousands of miles And I used to be a "buy a different car every 2-3 years" kind of person.

ysr_racer

You guys know you have to pay to play, right? I have a ten year old couch. How much do you think it's worth now?

Nothing, but I've gotten to use it for ten years.