As somebody who is in the market for a used 2019+ G63, I am not sure what to make of this video. If you compare current prices to the mark up from 2022 on, I can see his point. Is depreciation really that bad going forward?

 

Is your question whether expensive luxury vehicles with poor long term reliability depreciate?

 

You set the video to start way after he talks about the current gen G63. It seems to fare much better than some of the others on the list.

 

Sorry, I didn't realize the video saved my last playback time. I have edited it to start at the correct time.

 

It's not so much massive depreciation as it is prices just coming back down to earth. The covid days of $100-$150K ADM's for this car are long over (contrary to what many members were touting here at the time) and now we're seeing the consequences of people catching a falling knife.
My dealer is still trying to hold out for a sucker for an edition 55 from 2022 but its been sitting on their lot forever. Rising interest rates and massive inflation were always going to lead to this but the G still holds its value better than all of its competitors.
But if you're overly concerned with depreciation then maybe this car/segment is not for you.

 

hes also using wholesale numbers for the depreciation as it sits now. then comparing it to retail values people paid. The lower number is essentially trade in value, dealer pricing. His data anaylsis has a lot of holes in it. I get what hes saying but not a great picture painted with selectively wording certain things in a manner to make it seem worse than it is. Theres a 20,000.00 swing from wholesale to retail in his first example. Shown right there on manheim. He's interchanging msrp when new, to retail values of a 15 year old car. vs whole sale now, vs retail a year ago. His story is complete nonsense and has a lot of problems in it,

Also as shown in the screen shot hes comparing wholesale value of a car with 35,000 miles to one with 10,800miles. Can clearly see one sold at auction for 198,000.00 with 22k miles.

These types of reports are nonsense, and he doesnt understand the data, or he is selectively choosing how to word it to tell a story and exaggerate.

Clearly the retail value has changed, but like said above, this isnt real deprecation, its coming back to where it normally sits compared to crazy off their rocker high numbers. Anyone who didnt see that coming want too sharp.

I worked for Manheim for 12 years, and these numbers are an aggregate of the last 13 weeks of physical sales. the averages also include ALL units sold, no telling what the condition was, what options it was missing, accidents, etc. So it's very difficult to take a high level average that is fed by a lot of different things, to then make a very direct statement about the now plummeting values.

MMR actuality stands for Manheim Market Report. Updated daily, revolving data. Based on real transactions.

 

Almost every car depreciates, I certainly understand that. I love my E63 wagon. It has held its value fairly well. My point was at their current values, are we still seeing historic depreciation? Is there still a further large down swing until we get back the historic 23% depreciation for 5 years.

https://caredge.com/mercedes-benz/g-class/depreciation

 

here is a live view of a 2019 g63 with 30k miles, and all the actual transactions dealers made. Meaning dealers purchasing these vehicles from Manheim.

 

In my opinion, the decline from the massive up swing has pretty much reached the bottom on the G63. This has been happening for the last 12-18 months. The last 4-6 months I feel like the values of the used 2019-2020-2021 Gs have sort of stabilized. Which is why comparing data from today or the last 3 months to data at the peak of when the cars were bringing ridiculous numbers over MSRP is silly. Everyone saw that coming. Which is why I bought when I did. Because the values have started to level off. But the declines have been happening for over a year.

But I can tell you in the estimated retail value of a 2019 G63 of 136-159K, that would tell you right there his analysis is wrong. because a 2019 is a 4 year old car now. and had MSRP of around 165-180? depending on options?

even at the lower end of 136,000 if you take 175k msrp thats only about 20% in 4 years. not 20% PER year. But you'd be hard pressed to find a clean low mile 2019 g63 for 136K, theyre more 150-160k right now, which is actually only a 10% depreciation in 4 years. Not many cars out there that can say that.

I bought mine a year ago for @160k 25K miles at the time, and has all the options spec people want. And if MMR still showing retail at 150-160K a year later that to me indicates a flattening of the depreciation, because for his story to be true you would need to be able to find a 2019 G63 right now for about 115-120k to come down 20-25% YOY. And we all know there is no 2019 clean g63 for 115-120k, unless rebuilt or a ton of miles.

If my g63 I purchased for @ 160 a year ago, and I could sell it now for say 153-157k, it had MSRP in 2019 around 175k-180k, the 23% over 5 years is already back on track for the historical averages, or still even better, Considering 4 years ago mine had msrp of 180k and its worth 155-160 now, the 23% average would suggest in a year (5 years from new) I should be able to sell it for around 130-135k. Because in 4 years its only lost about 15% of its value from MSRP right now. that doesnt align with what he says.

Again though, always have to compare like for like, cant compare a wholesale trade in auction value right now to a retail value of a year ago. Of course there will be a massive swing, youre comparing wholesale to retail and a large amount of time has passed as well, the cars have more miles, theyre a year older, etc.

 

historically the g wagon is one of the best cars on the market to hold its value. Not including the lat 2-3 years as anomalies. In the report you linked here, it shoes 23% loss in value in 5 years time. He's saying 20% in one year. I didnt dig deep into this link, but it appears it shows after 10 years the car is still worth 55-60% of the value 10 years earlier? That's pretty good for 10 years. Most cars after 10 years are getting thrown away, and maybe worth 5-20% of what it was 10 years earlier.

 

I think you make some great points. I appreciate you sharing your experience.

 

Do any of us have a crystal ball?

I think you'll always be able find Joe Schmoe on the internet proclaiming doom and gloom, whether crypto, Swiss watches, stock market, cars, whatever... this is not specific to the G wagon and common knowledge given the asset bubble (not G wagon specific bubble) that was at it's peak 2021-2022 to date

IMO nothing new, cars depreciate, either you can afford it or not, don't stretch yourself for a car if you're worried about a loss

 

Yes I agree, no way to know for sure. The best you can do is go off of historical averages at this point. And almost remove 2021, and 2022 from the equation completely. They massively skew data in several ways. So as long as that is known, and one can look at the data since then and before that time period youll be fine.

With that said, there is cars that historically hold their value much better than the normal scale. And the G wagon happens to be one of those vehicles, historically speaking, they hold their value better than most cars on the road. Regardless of 2021, and 2022, it's always been the case with g wagons. They do better than most. Especially against like an S class or the like. But no, no car will appreciate unless it's ultra rare, exotic, or 2021-2022 happens again,. But that was artificial appreciation due to lack of supply. As soon as supply started got back in line (stemming from hiking interest rates), so did the values.

 

We could have WW3 geopolitically which kills all markets "going forward" (cars G wagons equities economy in general etc)...

or we could have the soft landing that the fed is hoping for and another bull run in the markets with interest rates dropping "going forward"...

only God knows, otherwise if you have the inside scoop let me know so I can leverage my portfolio further in that direction

 

When in doubt, get some data.

All Gs years 2013-2022 have double digit percentage YOY price declines.

 

Where did you get the data from?

 

CarGurus desktop home page, lower left corner "price trends".

 

Doesn't matter. They're likely done raising rates. It's the "quantitative tightening" jargon you should be worried about. Unless the still-strong economy suddenly slows, which would also mean unemployment goes up and fewer people would vote for Joe Biden, the only tool the Fed has left is to reduce the size of its still enormous balance sheet. There's no way to "soft land" out of that. I think Powell is just trying to delay the inevitable at this point, until after the next election cycle.

 

Well, I see some good points brought up. I also see some fundamental flaws in thinking. Some of this just has to do with communication of the points spoken about. It’s absolutely reasonable to talk about loss to a customer being the difference between the price paid and the price they can sell it for which ultimately is the difference between the retail plus the Markup minus the wholesale value. That is not the same thing as a year over year retail depreciation. They can both be considered, but not against each other.

The g HAD lower depreciation over a very long time, think 120 down to 50 over ten years and then to 30 over another ten with the new model we will see likely 225-250 (adm price paid) to 50 over these ten years, then to 30 over the next ten. This is with the assumption they each have 100k plus miles at that time. Pandemic increased real depreciation over the time of the average new car loan, regardless of what happened during pandemic. Inflation of that formerly depreciated object also happened which is driving up future prices. Part of that driven by the realization of the cash grab at the manufacturing level. Now if we consider the parts are actually cheaper, inflation of the price for the quality will increase depreciation of that same good similar to knowing an ice car can last 200-250k miles and an ev can not. The ice car over-time depreciates to zero more slowly because the quality was better (a g wagon).

 

Soft landing occurred in April-May. Check the WEI.

The economy is on its own going forward. Back to normal.