I'm looking at Kelly Blue Book values for top business class sedans and they depreciate like crazy.
BMW 7 2010 : $82,000 - $137,000
BMW 7 2001 : $11,500 - $15,050
Merc S 2010 : $91,600 - $149,700
Merc S 2001 : $11,950 - $17,000
Audi A8 2010 : $74,550 - $78,400
Audi A8 2001 : $7,725 - $9,275
I can think of a few reasons for that but it still doesn't make sense to me:
- Parts and repair costs for 2001 model is probably just as expensive as for 2010.
But how much you can spend in repairs, 10k, 20k in worst case scenario? That looks bad, but you already saved more than 50k. I don't know what could cost over 20k in repairs even on such car unless it is totaled. Besides if you don't want to make expensive repairs you can just send it to a scrapyard - all you lost is your 10k. That's the same amount you would instantly lose on 2010 model after it leaves the dealership.
- No warranty
What's the point in warranty if you will lose over 50k in 10 years just because of depreciation? Might as well spend those on actual repairs (if you are unlucky).
- Outdated technology
I think such 2001 model is still much more advanced than current Honda. Not to mention saloon and overall quality.
I don't know, it looks like a steal to me. For 10k you can get 5 y.o. Civic. I can't believe it is better than 10 y.o. German top sedan. Lets add 20k for repair expenses. I still don't think you would be able to find better brand new car even for 30k.
Can someone explain to me why those cars lose their value so drastically and why people don't want to buy them? Is 5 y.o. Civic really better?