BMW Depreciates €16 k in one year

todolist

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

The J Stands for Jay

todolist wrote: »

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

Would you pay more than €22k for a second hand one? Sure it'd only be a few quid more for a 171 model...

Tigger

todolist wrote: »

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

dealer probably wants to make a few grand saw 3 + vat at 13.5 i think so real depreceation of 12,225 which is 33%
all not golf 1.6 tdi cars (or similar) do that thats why i'll never buy a new car

jsd1004

todolist wrote: »

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

Id say thats about right. You have to give a huge discount on a 1 year old car to win someone over from buying a new one that they can spec and have from new.

colm_mcm

They just don't want it as a trade in unless there's a lot of margin in it.

mickdw

They want to make a killing on it.
They will only discount it by 5 or 6k from new if they get it onto their forecourt.

colm_mcm

mickdw wrote: »

They want to make a killing on it.
They will only discount it by 5 or 6k from new if they get it onto their forecourt.

Or it'll end up sitting in stock forever.

todolist

But a 42% depreciation in one year.How could that be?

colm_mcm

todolist wrote: »

But a 42% depreciation in one year.How could that be?

You've seen the 3 series GT yeah?

bazz26

The 3 Series GT is a very slow seller as they are not very popular. You also have to take into account that importing from the UK has given a hammering to used values here. Then there is this so called contribution from BMW which they are trying to claw back via poor trade-in values. I've heard similar of people trying to trade up to the new 5 Series from the old model, they are looking for crazy money.

I'm not saying all that justifies their low figure but in a roundabout way they are telling your friend to keep his car longer and get some value out of it.

AmberGold

Todolist, The wife is looking for a car, pm me I might be interested.

mickdw

Your friend should go in, have a look at one of their hard to shift stock then offer 20k under asking.

gctest50

todolist wrote: »

But a 42% depreciation in one year.How could that be?

cos looks like a 2000 Corolla hatchback etc

todolist wrote: »

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

€ 16,000 ?

~ € 300 per week ? you'd lease something for half that


http://www.joeduffyleasing.ie/search/


.

vicwatson

Lesson = buy second hand

bmwguy

Very undesirable car, they are horrible. Hard to sell, say they don't want it owing them much to shift on.

MarkN

bmwguy wrote: »

Very undesirable car, they are horrible. Hard to sell, say they don't want it owing them much to shift on.

Suddenly 17k for my 9 year old 635 seems like a bargain

Mycroft H

You'll almost always lose your shirt on a new car, it lost money the day it left the forecourt.

bazz26

vicwatson wrote: »

Lesson = buy second hand

Second hand would have to been bought new at some point.

The J Stands for Jay

bazz26 wrote: »

Second hand would have to been bought new at some point.

Yeah, but leave that to people who can take the depreciation.

Truckermal

vicwatson wrote: »

Lesson = buy second hand

That don't work for some people like myself who wanted an exact specification and colour plus have the comfort knowing it wasn't clocked or crashed!

Yourmama

Truckermal wrote:

That don't work for some people like myself who wanted an exact specification and colour plus have the comfort knowing it wasn't clocked or crashed!

And you paid a lot of money for this privilege. Is it worth It? You need to answer this question yourself.

Truckermal

Yourmama wrote: »

And you paid a lot of money for this privilege. Is it worth It? You need to answer this question yourself.

No it's not worth it as my own car is 12 years old and way nicer to drive but you must keep the women happy..

davo10

I have a 5 series m sports, as it is 18 months old I had to get it serviced last week for the first time. There is a new 5 series out this month so out of curiosity I asked how much it would be to change, I would have to take a 50% hit on my car.

Delacent

When it was bought new there was probably a trade-in involved, so the real price paid would not have been 38k as they probably got good trade-in value.

Couple that with sterling issues and bmw giving about 4k off new 318 and you get to a big depreciation number.

Add to the fact that its not got a huge target market and you have a serious drop in value.

Best option would be to keep it for another couple of years. The additional depreciation will be quite small.

Special Circumstances

colm_mcm wrote: »

You've seen the 3 series GT yeah?

Hahaha hahaha burrrrrn...

How does the X4 compare I wonder?

bmwguy

MarkN wrote: »

Suddenly 17k for my 9 year old 635 seems like a bargain

Yeah like its just madness the depreciation on high end stuff. Couple this one with the guy that said an 18 month old 5 series would be 50% of the new model, it's crazy crazy money, more than your average housing costs per year to drive a new car of this type, even before fuelling and insuring.

I almost broke my rule of buying a car I couldn't afford last year, a 330e on finance but then I remembered, if I can't buy it in cash I cannot afford to buy it full stop. I will in a few years when the used one's hit the market.

I have a 5 grand a year all in car at the moment, 04 e39.
1000 tax, 1000 insurance, 1000 maintenance, 2000 fuel (28mpg)

No depreciation really to speak of , bought 4 years ago for 2450 and people still tell me I'm mad driving it because of the tax and fuel bill.

Now folks if you do want to buy new, go for it but don't go for something quirky or a bit of a fad like the 3GT, legitimately one of the ugliest things to hit our roads ever.

As a self confessed fanboy, I even say BMW have released some of my least favourite cars over last few years, 3GT, 5GT, X6, 1 series coupe, X1, X3 from the 2000s which all depreciated like a stone.

bmwguy

As an accountant we depreciate our work vehicles 20% reducing balance, it's close enough in reality to your average car with average second hand demand. When someone buys something nobody else wants, you get what happens in this thread with the 3GT.

Example:

Purchase price 50k
year 1 depreciation @ 20% is 10k
Year 2 @ 20% of 40k is 8k
Year 3 @ 20% of 32k is 6.4k
Year 4 @ 20% of 25.6k is 5.12k
Year 5 @ 20% of 20.48k is 4.1k

5 year depreciation is 33.5 k or close to 70% on a normal, desirable car.

I'd tell the poster with the 5 series to get some more quotes about changing to be honest

Muppet Man

I was told 50% depreciation on a new golf GTI after 18 months from the same vw dealer I bought it from. I was expecting a lot, but that sorta pi$$ed me off. Didn't do it.

bmwguy

Muppet Man wrote: »

I was told 50% depreciation on a new golf GTI after 18 months from the same vw dealer I bought it from. I was expecting a lot, but that sorta pi$$ed me off. Didn't do it.

Yeah a golf gti is a bit out of the ordinary so that's what happens. Nice cars though but that would turn me off too

carsfan2

Up until relatively recently we had very low depreciation on relatively new cars here because of the low supply of stock and small numbers being sold as new over the last few years.
Now with higher new car sales bringing in more stock and the drop in sterling making imports much cheaper values seem to have taken a tumble.

I think the car in question is also part of the issue here. The 3gt is a small seller here and would be among the higher depreciating cars in the BMW range.
Whoever bought it a year ago should have done more homework on the model before purchase.

SBPhoto

McGaggs wrote: »

Yeah, but leave that to people who can take the depreciation.

If you can't take the depreciation don't buy new so. Also you can't bring it with you beyond the grave, live and enjoy.

carsfan2

Muppet Man wrote: »

I was told 50% depreciation on a new golf GTI after 18 months from the same vw dealer I bought it from. I was expecting a lot, but that sorta pi$$ed me off. Didn't do it.

That's taking the piss.
I traded in a 151 gti last year at 18 months old and got 7.5k less than I paid for it on paper against a BMW.
Obviously this figure represents the dealer giving me discount on the new car to inflate my trade in but 50% depreciation is ridiculous.
The gti is a desirable car and sells easy enough but the problem is the cheap finance vw offers on new ones.

dunnerc

trading in my 2 year old civic that cost me 27500 euro , against new model civic costing around the same.
cost to change 7500 euro , quiet happy with that .

mickdw

I think everyone should remember that these trade in figures from bmw are not any indication of the true values or depreciation. They are basically saying we don't want your car and if we do take it, we will take it at a price that guarantees a great profit.
You cannot buy a 5 series at 18 months old for 50 percent of new coat even if it's an old model.

GERARD123

Something strange has happened to BMW trade-in values over the last 2-3 months - ever since the new 5-Series was showcased around BMW dealers last Sept/Oct.

With most BMW dealers heavily stocked up in October/November (effectively 2017 prices), I was offered about €28-29k on my metallic 141 reg 520d SE Auto with only 30k miles (2.5 yrs old) against a €10k discounted 418d SE .....roughly €18k to change....I chose not to go ahead with that deal....

Now in Jan/Feb'17 I find that trade-ins have plummeted to a range of €19-€22k....in other words the BMW €4k credit off the new 5-Series has been taken 100% by dealers and trade-ins reduced - hence no change to the punter.....this for a very popular/saleable car that returns up to 53/54 mpg and is road taxed at €200!

Maybe that's commercial reality but try to get a BMW dealer to sell you a 141 520d Auto with 30k miles for near enough to that trade-in value (allowing him a reasonable profit) and you won't find too many.

They all blame Brexit but the difference in pre and post-Brexit Stg.exchange rates if you buy a 2014 5 Series in the UK is roughly €2k and getting narrower by the day.

This all reminds me of our friends in the Motor Insurance industry....blame the bad guys (legal profession etc) and lets double the motor renewal premiums and get away with it for as long as we can !

To put this in perspective, I changed in 2014 from a 2011 5-Series with similiar spec/miles etc for €18k...with Brexit issues I expected €20/21k....now they are looking for €30k.

Lesson to be learned? Hold on to my loan/debt-free car for another 2 years and pick up a current 171-spec 520d SE (now priced at €54k when "offer" ends soon)...and buy it in late 2018 or early 2019 for 50% less than new price!
Sad....but Happy Days!

R.O.R

Why would anyone buy a 1 years old car rather than a brand new one on cheap pcp?

Because it's a lot cheaper than a new one, that's the reason and it's the same across all makes and models. There isn't much difference between a 1 year old and a 2 year old car at the moment.

Mooooo

Saw a 430d msport gc advertised at 37k I think it was a 151 it was gone the day after I saw it but only had 20k miles on it. Dunno what they'd be new but I imagine it's close on half the price? Every car will depreciate but the first year or two will always be the biggest hit

54and56

todolist wrote: »

Could a BMW 318GT depreciate by €16 thousand in one year? A friend of mine went to trade in his BMW 318GT that he paid 38K for.One year later a couple of dealers will only offer 22k in a trade in.The car is in perfect condition.Normal mileage.How could this be?

This is more a reflection of how over priced the car was new than the trade in price after 12 months. Dealers buy at a price which allows them to make a decent margin. If your friend thinks he can sell his 1 year old 318GT on Adverts/CBG/Carzone/DoneDeal for a lot more than the €22k he's being offered by a dealer why doesn't he go ahead and do that?

bmwguy

Mooooo wrote: »

Saw a 430d msport gc advertised at 37k I think it was a 151 it was gone the day after I saw it but only had 20k miles on it. Dunno what they'd be new but I imagine it's close on half the price? Every car will depreciate but the first year or two will always be the biggest hit

They are about 57/58k new before extras.

PCP has the whole thing messed up, but changing expensive cars like these every year or even every 3 years was always a foolhardy thing to do.

carsfan2

GERARD123 wrote: »

Something strange has happened to BMW trade-in values over the last 2-3 months - ever since the new 5-Series was showcased around BMW dealers last Sept/Oct.

With most BMW dealers heavily stocked up in October/November (effectively 2017 prices), I was offered about €28-29k on my metallic 141 reg 520d SE Auto with only 30k miles (2.5 yrs old) against a €10k discounted 418d SE .....roughly €18k to change....I chose not to go ahead with that deal....

Now in Jan/Feb'17 I find that trade-ins have plummeted to a range of €19-€22k....in other words the BMW €4k credit off the new 5-Series has been taken 100% by dealers and trade-ins reduced - hence no change to the punter.....this for a very popular/saleable car that returns up to 53/54 mpg and is road taxed at €200!

Maybe that's commercial reality but try to get a BMW dealer to sell you a 141 520d Auto with 30k miles for near enough to that trade-in value (allowing him a reasonable profit) and you won't find too many.

They all blame Brexit but the difference in pre and post-Brexit Stg.exchange rates if you buy a 2014 5 Series in the UK is roughly €2k and getting narrower by the day.

This all reminds me of our friends in the Motor Insurance industry....blame the bad guys (legal profession etc) and lets double the motor renewal premiums and get away with it for as long as we can !

To put this in perspective, I changed in 2014 from a 2011 5-Series with similiar spec/miles etc for €18k...with Brexit issues I expected €20/21k....now they are looking for €30k.

Lesson to be learned? Hold on to my loan/debt-free car for another 2 years and pick up a current 171-spec 520d SE (now priced at €54k when "offer" ends soon)...and buy it in late 2018 or early 2019 for 50% less than new price!
Sad....but Happy Days!

I was at the launch in October of the 5 and the sales guy I know told me there were going to be a lot of disappointed existing 5 series owners as the trade in offers they were going to be getting would be substantially less than heretofore.
At the time I didn't think anything more but have heard anecdotes of lots of people getting very poor offers to upgrade their bmw recently.
I wonder if there is a policy from higher up the food chain to do this?

bazz26

Well that's a very foolish game to play if true especially when it's obvious they are losing market share to the likes of Mercedes judging by first month of sales. I guess March/April sales figures will be more of an accurate indication with registration of the G30 in full flow but putting all your eggs in one basket is hardly genius either.

Personally I think you would want to have more money than brains to be trading of at some of the figures being mentions here. It's not as if dealers are reflecting low trade in values when it comes to selling these trade-ins on. The old Brexit excuse only seems to work when trading in rather than when buying the same car from them. Looking back I paid what I know see as silly money to trade up this time last year which was alot less than some of the figures being mentioned in this thread, I won't be doing that again. I love my cars but it's become a mugs game now.

mickdw

With bmw now appearing to have gfv at 50 percent on the new 5 series, it would appear that we are heading towards deals with no equity remaining in car at end of term.
That being the case, they will have to come up with lower deposit deals via bigger discounts or zero interest to make sales possible.
The current offer on the 5 is at 484 per month with 4k contribution and 11k customer deposit and about 7k interest.
Into the future, if they set it up with zero percent interest and no contribution, you could be driving a new 5 series for 583 with 5k deposit. You would then likely need to come up with 5k each time you trade.
A better deal than throwing 11k at one, most being lost in interest and having zero equity at end.

carsfan2

Mick
If sales continue to struggle for new Bmw's then the new 5 will be on low interest rates before the end of the year I predict.
On the uk forums they are already talking about getting big discounts and 2.9% Apr deals.

gctest50

mickdw wrote: »

......... it would appear that we are heading towards deals with no equity remaining in car at end of term..............

there'll be a recycling fee in the cost of your new car - like a fridge

it'll be something like this :

colm_mcm

mickdw wrote: »

With bmw now appearing to have gfv at 50 percent on the new 5 series, it would appear that we are heading towards deals with no equity remaining in car at end of term.
That being the case, they will have to come up with lower deposit deals via bigger discounts or zero interest to make sales possible.
The current offer on the 5 is at 484 per month with 4k contribution and 11k customer deposit and about 7k interest.
Into the future, if they set it up with zero percent interest and no contribution, you could be driving a new 5 series for 583 with 5k deposit. You would then likely need to come up with 5k each time you trade.
A better deal than throwing 11k at one, most being lost in interest and having zero equity at end.

50% GMFV can't be that bad a thing for the consumer though. How is it different than 30% GMFV with 20% equity on top? If the car is worth less it's their problem.

mickdw

Bad thing because it will give lower repayments, people who cannot afford the car might scrape into it and will have zero at end of deal after coming up with 11k day one.
It's also a high interest deal - 7k in interest although there is 4k contribution.
For a sensible buyer who can truly afford the car, the 50 percent gfv is a good thing, at least it protects against piss poor trade in valuations at end of term.
A sensible buyer on such a deal might put 200 quid per month aside for deposit on next one.
Considering alot of their own customers are being very disappointed with trade in values on 2014 cars, they will have to rethink the financing to suit people with smaller deposits or else sales will collapse.

Cee-Jay-Cee

gctest50 wrote: »

cos looks like a 2000 Corolla hatchback etc

That's really unfair! The 2000 Corolla fastback/hatchback is a much nicer looking car.

Casati

Its looks to my eyes that dealers are protecting themselves from sitting on a field of overvalued cars - i.e. similar when the VRT changed and loads of dealers were wiped out

Simply put, they are pricing all trade-in's at the lowest price they can buy a similar car from the trade in the U.K., import and make a margin on it. As such the trade-in's offered are at a level that dealers are taking zero risk

I'd say its well calculated on their behalf. They might lose sales, but the average profit per car must be massive because they will hold out of top dollar on all second-hands regardless how cheap they have bought them. By discounting new model's (even if these discounts aren't to be believed - i.e. spec reducing/ base price increasing) they will attract new buyers to help replace disgruntled owners of three year old trade-in's.

For the premium brands its critical to remember that most of these cars are bought as company cars where the exact cost to change isn't generally of the same importance as it is to private individuals - i.e. they are unlikely not to sell new 520d's to business customers by reducing value of second-hands or increasing lease costs slightly

For non premium brands the focus is on attracting customers who haven't bought new cars in 10 years as there are a lot more potential new customers than there are customers who have bought new cars through the recession. As such its all about the scrappage deals and low PCP which are really targeted at (and in fairness benefit) the lads getting rid of old bangers

54and56

Casati wrote: »

Simply put, they are pricing all trade-in's at the lowest price they can buy a similar car from the trade in the U.K., import and make a margin on it.

This isn't aimed at you Casati so is just a general question but why would any car dealer pay more for a trade in than they can purchase the same car for elsewhere regardless of whether elsewhere happens to be the UK or why would they pay more than the amount they believe they can make a decent margin on? I can't think of any industries where someone would willingly pay more for their stock than their competitors.

MarkN

The 7.7% on the 5 series is absolute madness in terms of trying to recruit sales (not including fleets) considering the competition.

You can go into Audi and get a much lower rate on a car competing directly for 5 series business. That said, I bought a 3 month old 5 series in 2012 and the rate was pretty similar at 7%.

For me, it's a shame as I think anyone who throws 11k into a car with it potentially being wiped out in 3 years (just to get a monthly repayment you can afford) is mad. I've been very loyal to the BMW brand for the last 10 years but if I want a new car again I'll be getting a Golf GTI or something as BMWs on PCP have become unaffordable for people without hefty deposits. I'm at a time in life where a big deposit like that would be going on a mortgage lump payment or pension not a heavily depreciating asset. Can't believe I've even typed that, I've changed

Casati

Je_suis_Jean wrote: »

This isn't aimed at you Casati so is just a general question but why would any car dealer pay more for a trade in than they can purchase the same car for elsewhere regardless of whether elsewhere happens to be the UK or why would they pay more than the amount they believe they can make a decent margin on? I can't think of any industries where someone would willingly pay more for their stock than their competitors.

Good question but thats global trade for you for products are sold at different prices in different markets, one example is electrical switches where they can be much cheaper in Ireland versus U.K.

Regardless, dealers in Ireland traditionally valued trade-in's on what they could sell them for less a reasonable mark up and stocking cost. The sale price was/ is based not on the cheapest specific car available from a dealer in the U.K. but the typical price a similar model is selling for.

By comparison with U.K. market, you could rightly say they over-valued used cars and paid too much for trade-in's, but by knowing their local customers and market they were still able to make money and look after those customers not just for a single transaction but possibly for their working/ driving life