How to cut new car depreciation in half (dead easy) | Auto Expert John Cadogan
Вставка
- Опубліковано 11 вер 2024
- How to cut new car depreciation in half. (Dead easy.) Three easy tips in this report are all it takes.
Save thousands on any new car (Australia-only): autoexpert.com...
AutoExpert discount roadside assistance package:
247roadservice...
Did you like this report? You can help support the channel, securely via PayPal: www.paypal.com...
You buy a new car. It depreciates. It’s like throwing a $50 bill out the window every few days.
The truly insidious thing about depreciation is the way it attacks covertly. You don’t pay it to the end, when your knuckles are white and you’re waiting for the sales dude to come back with his trade-in offer. You know you’re about to get bent over, and the question is: ‘How hard?
If you had to pay your depreciation once a week, perhaps in cash, at the post office (like, if that was a law) new car sales would plummet over the perceived injustice.
So, I’ve got three tips for you that will cut the depreciation you pay in half - inspired by a somewhat disappointed dude named Laurie Howell, who’s one of us. One of you - whatever.
"In 2017, partly on the strength of your reviews, we bought a Kia Sorento. It is a wonderful car - silent, economical, packed with features, comfortable and with enough power to do what you want. However, I recently saw an ad for a second-hand Sorento of the same spec and similar kilometres to ours and noted that it was selling at approximately 60% of what ours cost new. A quick check of other ads, and some Googling has revealed that the Sorento has one of the highest depreciation rates around - interestingly exceeded only by the CX-9.
"What is behind this high depreciation rate? Has the 7 seater SUV bubble burst? It certainly doesn't seem to be anything about the car itself - in fact if you want a roomy, comfortable SUV, a second hand Sorento or CX9 would have to be a good buy I would think. Also, with such a high depreciation rate ($130 per week by my estimation) would we have been better off leasing the vehicle?" - Laurie Howell
We’ll look at the data in detail, but no - no bubble bursting there, with seven-seat SUVs. Used car values are underpinned by supply and demand. In fact there’s a bubble in used cars generally at the moment - COVID-19 has caused many new car supply shortages, and that’s reduced the supply of late-model used cars in the market, because trade-ins are delayed, which has ramped up the value of whatever used cars are available.
Also, leasing is not a hedge against depreciation - unless you jump into one of those ‘guaranteed future value’ deals with a manufacturer, and those are often completely extortionate in terms of the other aspects of the finance contract. There’s no free lunch on depreciation, and you cannot beat it with finance.
Let’s crunch the numbers in this report.
23:35 For the time-poor among us, John's tips for minimising depreciation include negotiating a discount at time of purchase (eg 10% off RRP), extending ownership by an extra two years (eg upgrade every five years rather than three years), and selling privately rather than trading through a dealer to maximise re-sale value. Thanks John, great advice! #grammarmatters
Cheers mate 👍
John- Well done ✅ presentation.
I've always thought that resale value is only important if you "intend to sell".
And, we typically hold our cars for 10-15 years, which we can easily do in our climate. Cars don't rust where we live and service and use is really the name of the game when you own a vehicle.
I've also found that the more utilitarian the vehicle, station wagon, truck or van, the more likely the vehicle will hold it's value, and as long as it's serving your needs it's generally worth keeping and fixing. Vehicles are so expensive these days, it's almost always less expensive to maintain and repair your own vehicle. Personally, I think the only compelling reason for turning around and getting a replacement is for upgraded safety. We have 3 vehicles, a Toyota Prius for city driving and mileage, a Subaru Outback for longer range trips and hauling cargo, and a Mercedes Benz Sprinter Class B RV for overnight and extended long trips where we can sleep in the van, social distance and still get 19 to 20 MPG....
All of them are between 9 and 12 years old...the thought of just selling them for a newer model sounds financially unappealing to me....it would cost a small fortune to replace and for what? Status?? No thanks. My two cents...
----Mark
got a 02 civic 5 door base model 1.4 non vteh and i have the same thoughts. it's rust free, just a little bit aesthetic, gets 47-48mpg on the motorway, will go in ulez zones and is dirt cheap to insure £270/year. the engine goes forever and you can drop the seats into a flat floor. loads of space inside, more than into a mid sized suv and good tow capacity as well. i can put a 6 pack of 2L water bottles lenghtwise behind my seat and the floor is flat. how nice is that? i don't really get anything other than some fancier tablet inside that can and i did fix with some chinese unit and i could put myself in debt to impress the neighbours for 2 fading seconds. why change?
Agree. It’s also more convenient to own several vehicles in case one of them breaks down and have to be in the workshop, or God forbids one of them gets wrecked and have to be in the body shop for an extended period or written off by the insurance. At least you don’t stress about having to buy another vehicle right away.
John I know this doesn't help your business model but the best way to beat depreciation is to buy a 2 year old car and use it for 3-4 years. On top of this if you haggle upfront like you say in the video it's pretty good and furthermore if you buy a Kia you're covered by manufacturer warranty for the duration of ownership.
Haha !! It’s very rare that I watch a 30mn Vid from beginning to end, but I did with this one.
This Ozzie, sori, this Australian, has such a charming manner and such a range of almost-decent idioms that I found myself completely enthralled.
His in-depth knowledge and the extraordinarily generous amount of ‘homework’ (prep) he did to demonstrate his hypothesis was really heart-warming. And, I have to say, the explanation of his theory was both comprehensive and completely convincing.
Good ‘un, Cobber !!!
Buy a good car and drive it until you wear it out ( 10 ,12 ,15 years ) . The important factor here is knowing what you really want.
Oh yeah, take good care of it , that helps keep it going !
True. If you buy a new car and own it for 15 years, what the notional value was three years into your ownership is irrelevant. Having said that, like many people commenting here, I prefer to buy low km older vehicles that someone else has taken the depreciation beating on. You just have to patiently wait until the right vehicle comes along. You clearly don’t have the range of choice if you are looking for a specific make and model of second hand vehicle, compared to buying a new one. If, however, you are just looking for reliable transport you can broaden your search and increase your choices.
@@bruiser6479 So true. If you research for durable models this can work out well. (UK)
Yep, mine’s cost me $35 per week in depreciation over the 11 years I’ve owned it. And I’ve covered 330000km in that time. And when it’s time for a newie there will be no need for any trade in or private selling angst! The scrappies will even pick it up from my place lol!😂
@@bruiser6479 Yeap, unless there is just some really specifically special new car you just have to have, buy 3 year trade old ins or lease returns!
Yup. I've got two vehicles much older than John is talking about here. The first is a motorcycle I paid NZ$30k for brand new in October 1995. Sadly I couldn't negotiate anything off the top as I pre-ordered one from the first shipment of five to hit NZ. Now 25 years old and still using it. I just did a very pleasurable 920 km in a day trip on it two weeks ago. That makes the depreciation no more than $23/wk if it's worth $0 now. Pic two weeks ago pbs.twimg.com/media/EjblSJDUYAAsIFf.jpg
The other is a 2008 Subaru Outback 2.5XT (265 HP turbo) bought with 87k km for NZ$10.3k privately back in May. It's got such modern features as "EysSight" dynamic cruise control, lane departure warning (I turn that one off), pre-collision warning, lead vehicle start warning. Yes -- in 2008. It used a very reasonable 8.34 l/100km over a 716 km tank on an open road trip recently. Assuming I keep that 10 years (and why not? My last Outback was 22 years old and trouble-free when I sold it) that makes depreciation a maximum of $20/wk if it's worth nothing then. Still a very comfortable, fast, and safe car. pbs.twimg.com/media/EchyAkYU0AIvq_P.jpg
The one other very important thing to do to limit depreciation (that John didn't mention) is to look after your car (service on time, don't abuse it) and keep it in good condition, because it is almost impossible to sell a tatty used car privately (unless very cheap), and the dealer will gut you on trade in price for any defects your car has.
Much easier to double the depreciation, go to a mercedes or a BMW dealer, show you have money, accept any offer, Buy a too expensive car you cannot possibly afford. Sell it in panic. Make sure the buyer notice you are in panic. Works everytime.
Another one (which kind of goes along with #1) is buying a newer used vehicle instead of a brand new vehicle.
That way, someone else has already fronted the giant 'off the lot' depreciation dive and you only have to deal with the steady year-by-year depreciation. Then if you combine that with all three of the points you suggested, you can potentially have a best case scenario for minimal depreciation.
Thank you. This video on car depreciation is so important for public Greater Good. Out of sight is out of mind. You provide a great independent position. I appreciate your work.
Thanks very much, John.
@@Matthias_Fischer My experience of car buying with John is that he has old fashioned integrity. I bought a new car a month ago for a lady friend via John's recommendation. There were problems and John responded quickly. Please understand my father was a 2nd hand car salesman after being a mechanic, so I was expecting endless bullshit but got hard nosed comment from John. Thank you again John.
@@Matthias_Fischer I am an independent consulting engineer in.my own practice for 35 years and paid by clients. The fact that money is paid to me does not change my independence as I have walked away from large paying clients wanting me to compromise on Australian Standards. People are not perfect and makes mistakes, but someone with personal integrity cannot be bought, only paid for services.
@chris younts Is that sarcasm or irony!
The best way to handle depreciation is to take advantage of it instead of fighting it. Buy a car that’s one or two years old and let someone else absorb that initial hit of depreciation. You still have an essentially new car, but you’ll save thousands.
This is true. At least it was true pre-pandemic before the supply chain clusterfuck. I'm in the new car market now purely because 2 or 3 yr old cars are essentially the same price as new ones, without the warranty and latest tech. Even with the rising price of new cars, they perversely represent good value now relative to 2 yr old used cars.
@@guymp right you are! Funnily enough I found the exact same thing when I was in the market so I ended up buying a brand new outback, very pleased with it.
Thanks John for the entertainment and the education. 👍👌
Buy new... look after it like you care... drive until it dies...not an issue.
Only if it's a Toyota ! Or maybe a Mazda or an Isuzu
I took this slightly further. Bought well-maintained cars in the 2 to 4 year age range and kept them till they were scrap. Excluding the toy (a Caterham, bought as a kit) I'm only on my 3rd car since 1982 and the inflation-adjusted depreciation is about £1000/year. Buying an E34 BMW shortly after the E39 came out was a help as was buying the current car (Outback) in the unpopular metallic beige that the dealer couldn't shift.
@chris younts Well, I might still be driving my 1978 Jaguar but for it being T-boned and written off. I do have a 1963 Massey Ferguson 35x that is worth significantly more than I paid for it 20 years ago even allowing for inflation and I'm quite sure it will still be doing a day's work long after I'm gone. There is something very appealing about basic "square-nut" engineering and the ease of maintenance it provides. The Caterham, of course, has some of that having changed little in design since the 1950s with only minor items of modernity (such as an ECU) on my '06 car.
Given that I would not touch anything with an electronic handbrake or an auto box I may well be running increasingly old iron from now on.
I keep my cars for ten years plus.
@@ColinMill1 Agreed, Last car I bought was at the start of the GFC (2008) I bought a 2004 Jaguar X-type 3.0 AWD for roughly 1/3 of it's new price. Still have it today, still use it as a daily car. has never given any significant problems. Just runs and runs.
As someone who modelled car values for a fleet company this is bang on...Also for the average person leases aren't good value.
Thanks very much, Joel.
@chris younts Exactly. Lease a Jaguar, and drive the shit out of it!
@@countdamoney8128 pretty much.
@chris younts there is no free lunch. We used to make a lot of money of leasing charges that accounted for repairs. If the car was a lemon we took a hit on 1 car maybe but in the end we factored all those numbers in and just billed everyone a generous allowance for their car to go wrong. You may hit the jackpot and get a massive repair bill cheaply but really are you winning if you are driving an unreliable poobox that breaks down
@chris younts and it also depends on the type of lease a series of videos on which lease is best
Another informative, well considered piece! With the only (understandable) option missing of don't buy new. Let some other poor sucker wear the first year or so depreciation and then see how much you need to take to the post office each week, for 3 years...
1950. In less than 50 years we will have flying cars! 2020 this is how you wash your hands.
Bet we still have some petrol and diesel vehicles for another 50years. When they ban the new sales just make them all pre registered it will be pre reg or nothing at that stage
@chris younts hopefully they keep a petrol supply going for classic vehicles
@chris younts I might be dead by then if not I probably won't be using anything with an engine by then due too old age.
@chris younts I suspect synthetic liquid fuels will be produced as electrifying medium and long haul aviation is a huge way off. Last I did the sums and sprinkling a lot of optimism on the efficiency & weight of electric propulsion for say an electric A320 with batteries weighing the same as max fuel load you get about 45 minutes flight duration. And that takes no account of the payload issues of landing something with the equivalent of full fuel, etc.
@chris younts Absolutely no problem for my Mercedes W110 which is perfectly happy to run on cooking oil or melted butter :)
well, my thoughts on depreciation.
first, nice to see you with your drill in your hand for the most part of the video......
second. really, the whole part about depreciation i don't understand when trying to find the cost to own is basically how long you keep your purchase. if you are like me or my hillbilly friends, you keep you cars forever.
driving around my area, you would love, john, to see the incredibly beautiful, creative ways they keep cars alive here in the hill. i saw one car last week where NOT ONE fender was the same color, having been replaced from many different junk-yard replacement parts.
spectacular.
i think THE most creative work was a small ford escort with around 7 bleach bottles, all roped together along the front, replacing a lost bumper with water pressure!!!
i think, in all the cars i have owned, i only sold one to another person.
the remainder are still with me or in the hands of some family member, kids, nephews, nieces or whoever needed a cat in school and i had no more use or need of it.
so, in my life, depreciation is really a useless tool when deciding on a vehicle's value or coist to own.
keep with the repairs, fuel and such when looking at cost to own.
Great analysis, and different way to think of car ownership. Many people think leasing is a free lunch because of the low payments, but you don't get a car at the end of the deal. Buying low and keeping is the best way to go, financially anyway.
Excellent tips. In my country (Pakistan) due to prolonged delivery times, if you sell a car within a year, you can easily get more money than what you actually paid! This is because car dealers charge (extort) extra money, over and above the “on road price” for urgent deliveries. Buyers prefer buying a several months used car instead of waiting for 6 month.
I have never ever owned a car that has depreciated. I only buy second hand cars that will become classics in a mere twenty or thirty years.
Always love the analytical approach you take with every video you do.
By a nice one that you really really like and keep it well maintained, drive it till it drops instead of selling it every 3 years.
My first car was a very old Datsun 120Y. It was a block of rust on wheels. I gave it a name which I used to call out every morning. It was "Start you bastard!"
Hahahaha
Another great watch John, some good financial advise for those who get a new car every three years.
I’ve played the depression game, figured 3k per year (cdn) if one was watching the money fly. Played it by keeping the same Pathfinder for 17 years. While it has the typical rust spots on all four corners, I figure it’s paying me to drive it now. Still hasn’t shit all over me. 40k new / 3 k per year paid off in 13.3 yrs. (ugg such a pig...NOT... thanks consumer report for showing it as a recommend pick). Now for the past 6.6667 yrs at 3k per year it’s given back almost 20k. I’d say not too bad, it was a keeper. While today I’m getting ready for another cdn winter (filled full of -10 average down to -30 coldest) figure it’s still a good ride enough to take me on ski or beach adventures in the good old frozen North. Still looking for a replacement. Figured a couple years ago a Subaru might be in my future, however with the issues noted regarding their shit box motor problems, and how the mother ship isn’t responding well to it royal loyal customers I’m not sure where to look. Thanks for saying no to Nissan, in 2020, I think I’ll look at a Tacoma as my next ride.
Couldn’t agree with you more in regards to your commentary on spelling and grammar.
I know which job applicants get interviewed...
Did you use Google Translate for that email?
I agree, it jumps off the page/screen, and employers make an immediate note and make decisions accordingly. Employers want the best they can get for what they are willing to pay. Do not make comments in capitals, and shout "FACT".
Yes do your best at School, it really pays off in the long run.
Just checked to make sure no spelling mistakes.
@chris younts Irony?
Well, not everyone finds the easy way up, At least the guy put himself out there. I believe encouragement would be the better course.
For me, the best strategy has been to find a one or two year old model that has a CPO warranty from the manufacturer. You can get a nearly new, typically low mileage car, with a warranty that in come cases is better than the original, depending on the brand. AND negotiate the price. You might not be able to get 15%, but you should be able to approach 10%. Lastly, and this is highly personal... depending on your particular needs and tastes in cars, you might want to research what models are NOT selling well. Dealers are willing to offer a larger concession to rid themselves of lot queens. If you can find an oddball model that fits your needs and tastes, you might be able to get 15% or even more off their asking price.
I just got my6 rego bill, I don't feel quite do bad now, thank you.
Thanks John. This is something I bang on about all the time because I was taught young. As a young guy I bought a Corolla new and kept it for 12 years...21k to 6.5k... Not bad. I personally really hit the nail on the head when, last year, I bought a second hand FJ Cruiser. They have incredible value holding capability.
I purchased my Forester XT at the end of year sale, negotiated 7K off the price with a bonus 5 years factory warranty, as I wanted the 5 year turnaround for simply the reason of depreciation. The Forester has good resale and I am currently looking at a loss of around 15K over 5 years which I think is pretty darn good. I also buy all of my phones/tech gear one generation behind current and this over the years has saved me thousand upon thousands of dollars.
Great video Johnny Cadz. Well researched and based on statistical data which doesn’t care about our feelings.
I bought a new Sorrento via John's company in 2015 - I think I got a 7k discount from memory. The local KIA dealer said as its a new model, there was absolutely no way to get anything off the price.
Greetings from Retardistan (Khali-FOR-nya as Arnie would say) from a recently retired fellow engineer (Aerospace in this case). Love your channel.
18 year old Toyota Highlander FWD with 253,000 miles (that's ~407,000 km in Shitsville) and still going strong.
Thank you very much, B. I hope you endure the fires (I feel what you're going through - we had that 6mths or so ago...)
Really appreciate the social commentary around the 9 minute mark. Normalisation around punching below where any full-faculty person in a developed nation should be is getting tiring...
That last sentence could be your Rock Anthem, John. “And Baby, that’s how you beat depreciation”. Mind you, I’m struggling to rhyme with “depreciation”. Hang on, Appreciation! Yessss.
3 years is too early to sell a car, imho. If you're someone who takes care of the car you have and don't drive too much, you're selling an almost new car for the price of an old one at the point. And what are you getting in exchange? Pretty much the same car, with some fresh chemical smell in it.
4-5 years is what looks more reasonable to me. The car is just starting to get old at that point, there's probably a new model out there, some new tech has come to the market, and you feel like you're buying something new, something better.
And even if technically you're selling the car at a much lower price, like John showed, your weekly cost is in fact better.
True. Sometimes there are step changes in design. Other times it's much the same with new styling. Worse still, they occasionally spoil a good model.
I very much enjoy your serious reports without too many jokes
IF John had used the MY17 Sorrento from Redbook the numbers are significantly different
New $58490 T $32,850 56% P $38750 66%
One thing to keep in mind for folks from the US, at least in my state, is that a trade-in reduces the price of the purchase with regard to sales tax. This closes the gap a bit between private sale and trade-in. You will still get more selling privately, but maybe not enough to justify the hassel.
John I do find your videos are excellent. When you get into the weeds of it it's even better. Any chance you might do some reviews on pickups. Just a suggestion. I know your time is valuable just a suggestion.
Keep up the great work. Great video.
Good call on basic grammar and the inability to speak, read or write like a functional human.
It is very important.
@@AutoExpertJC Have you seen who people vote for?
Also, there are some people who should never turn spell check off.
Trouble is a lot of (particularly older) people are semi-literate whether they like it or not, and pointing out their shortcomings in this way is likely to put them off communicating online which is a real shame. Also, glass houses and all that -- "data" is plural.
@@TheSpoovy Re "data"; it is now common to treat it as a collective noun -- like" heap." E.G. That IS a heap of crap.
Really enjoy the Scotty-esque corner graphic with Shattner during the Pathfinder digression.
'Shat Verified' - yesssssssssssss! MALS!
Hi John, here is my way in a nutshell:
Buy 3 or 4 years model - most money car loosing that time
Spend some time on studing reability reports - if car have known issues price will drop rapidly
Buy car for longer period of time (at least 7 years) because you will always loosing money during ownership (except you bought Bugatti Chiron or McLaren Senna...)
Buy car that fits your needs (size)
Buy highier standard quality in interior and usefull things (eg. towbar) not super flashy in advertisment "I use it once" stuff (autonomous parking).
Do not go for a leasing
Do not go for big debt credit
In other words, be disagreeable (in relation to hack #1).
As always, great advices, Mr. John! Thank you for sharing your insights on this matter!
Or just buy 2 year old cars and save a shitload 😂😂😂
It's an option. But new cars are nice.
Yeah you can buy 2nd hand, did that for most of my motoring “life,” but I found that you usually end up with somebody else’s problems. When I finally switched to a new car I had 5 years with only one problem, that was fixed for free without any problems at all - thanks Hyundai. Sure you pay a premium for a new vehicle but it’s so much better than 2nd hand. I liked it so much I bought another new car, with John’s help - thanks JC, and sold my Hyundai privately. Btw, I know the person that bought my old car and 2 years on it’s starting to have a couple of minor problems. I’m gonna stick with new.
This is where the market drifts to in Europe. Cars became so hilariously expensive in the last decades that you need an above average income to actually waste some of it on a new car. So the majority of new car business is rental and leasing car companies which provide fleet services to businesses, which in turn give these cars to their employees in place of a wage raise. After 2 to 3 years the leasing deal is over and the unwashed masses can get their hands on a (ususally well maintained and accident free) premium second hand car.
Since the organsiational buyers do have big discounts on the unrealistic list prices the gap between new cars and the leasing returns becomes so big that buying a new car here (Germany) is just economic nonsense, even with 20% discount or more on the list price.
Like John said. I traded off two used cars for my 2020 Kia Cadenza (Technology). I paid a premium price of course because in my region of Pennsylvania they are rare as this one is equipped. When you are doing your own mechanical work, and it is quite frequent on older vehicles, you get tired of it. It is good to have a car with warranty on everything for three years and the most important parts for ten.
I also have a 2001 Dodge Ram 2500 w/Cummins so I still get to play mechanic regularly and I use it as a truck, for picking up all manner of materials and save the delivery fees.
@@AutoExpertJC Yes, they are, but it's an expensive game to play. I tend to let Businesses, Car Rental companies and lease purchase people buy the new cars. Then I pick them up later when the biggest drop in depreciation has already occurred. Unless there's some specific feature I'm after that is only available in a late/new car, I tend to avoid them. Good video, thanks for making it.
Never have never will give my car a name ,expletives definitely
Or Carry Mac Car?
Nipple Grinder?
Something I always found interesting about how people react to new car depreciation. They buy a new car; fork over all that money, and then are somehow hurt and offended that several years later they don't get 100% of their money back.
Hi John,
I see that you suggest that when buying a new car through a car dealership that we should be able to get a 10% discount of RRP but I used your service to broker a deal for me and this figure wasn’t achieved . Our consultant worked hard and exhausted all avenues ( dealerships) but only saved us approximately 4%. We were happy with the price but am surprised to hear that you think it should be a lot better .
I'm talking generally, Terry - there are a lot of variables.
I understand; 10-15% is a pretty big discount in any scenario and I wish we could have been able to achieve that much - if a broker can’t get close to that then it’s pretty tough for the average punter to achieve .
I realise that you are just showing general examples but it’s hard to imagine getting such a good deal .
Love listening to your advise and recommendations ; plus the great entertainment as you do so
55% retained value after 3 years based on MRSP and trade in is amazingly good. New cars depreciate exponentially, if you can't stomach that buy a car 3 years old. New cars are also sometimes less reliable than a well looked after used car.
Hi John,
Great explanation and clarification of an 'Elephant in the room' scenario when buying a key item of great cost - including vehicles. Another area that someone could get caught in is via finance. I purchased a car that's on your list in Jan 2019, after 13 months of ownership it was involved in a crash - rear ended. I was paying 'extra' payments on the small loan I had - took advice from financial advisor to finance the car. Anyway, I could have been $20k out of pocket if the car was written off.... The insurer would have paid out the finance company - however I would not have been given back any 'additional' payment amounts over the period - the insurer would have just said 'thanks' for helping us out. Now what I should have done was keep paying the minimum I had to whilst I have a new replacement up to 2 yr clause, in the policy, then possibly paid out the vehicle after this expired. Which then becomes agreed or Redbook or whichever it will be named on the policy.
Thankfully the repairer was terrific to work with and did a truly excellent job of the repair and paint match ($16k) repair on a $68k vehicle (13 months old 8k km).. that I rang the finance company and paid out the $32k owing. 4 years early, I then renegotiated the 'agreed' value with the insurer and had an additional 12 months added to the 'new' car clause, plus reduced the insurance premium because of there being no finance.
A lesson learned that could have been costly. Could be worth a video...
Thanks again for the great content John.
Finance doesn't affect depreciation. The video is about depreciation.
I have found a way to have all my cars NOT depreciate at all. I never sell them and appreciate them every time I drive...
Excellent vid John, very informative, keep safe and keep up the great work of informing us muppets.
John, I was looking around an Aussie car auction site the other day, a Maybach that sold new for $1.1 million in 2007 was at the current bid of $92 k that’s not to bad depreciation in 13 years $1 mill, oh dear!
Also don’t spend money on fixing cosmetic blemishes that don’t really bother you because you think it’ll give you a better trade in price. The dealers have professionals that will fix up the body and interior for next to nothing and in no time. Similar with private buyers, just be honest that you’re selling the car as is and have taken X amount of money for the damages. For calculating X I recommend taking the actual quote from a repair shop and dividing it by 3.
Also show the buyer the appropriate ChrisFix videos to convince them it’s super cheap and easy to fix it yourself. 😉
just dont buy a German car, that would be a good start😉
As someone that bought an A3 some years ago, i completely agree.
They say, you buy a japanese car and sell it before the warranty runs out. You lease a german car. and you sell the car before you bought it if it is italian.
Number 1b John.
Always pay cash if you can! Cost of ownership goes up considerably when you finance. Hard to bargain with the dealer on discounts.
You pay higher insurance premiums if the vehicle is financed.
@chris younts 🇦🇺 Our son got a $200 pa reduction on his premium this year when he paid off his car loan.
@chris younts they consider the insured vehicle as having two owners, ie. Higher risk. Australia is an expensive place to live. There are hidden charges and taxes on most things.
When you buy a new car in Australia.
1/ GST and sales tax
2/ Luxury car tax (if purchase is >$46,000)
3/ Dealer fees and charges
4/ Pre-delivery fees
5/ Ming Mole extras like special paint protection.
6/ Extended dealer Warranty.
7/ etcetera, etcetera.
Adds up to many Thousands of dollars.
9:30 Subscribed at this point. Not only learning about cars, you'd be learning about life here.
I try to keep cars 10-15 years if possible. But the only way I can do this is to do my own repairs and maintenance. The only major repair I did not do was the rear main seal. I figured on my wife's 2005 Sienna, I saved about $10,000 USD on repairs compared to dealer cost , between the last 150,000 to 210,000 mile leg of her life. The recent repair was estimated at $6000 USD and required a new Cat / Head Gasket and other repairs to the Flux Capacitor. So we decided to bite the bullet and trade it for $1000 to buy a 2 year old Forester, for about 30% less than retail for a new 2020.
Overall I can't complain 8 times around the world in comfort with 3 kids as far apart as possible with 3 row seating. Our car was named Sandy, in car years she was 15x6=90 years old...may she rest in peace.
BTW...Great Video
Excellent explanation of common sense.
Best buy is probably to purchase a second hand three year old car that was leased before as probably well maintained and in good condition and might still have two years manufacturer warranty on it.
Don't worry about me. I named my car Luseall (luse all over) She hasn't depreciated in the last 10 or 20 years. Every once in a great while I still have to make a payment at the auto parts store but it is never over a couple hundred dollars and not very often.
New EV's don't seem to depreciate as much as other ICE cars. EV's just don't have the long term costs of upkeep or running costs. If you don't need to travel in remote areas it's probably better to wait to get a used EV. Check charging networks and service locations before getting the EV though.
David Phillips For a different opinion check Autoexpert’s pieces on Nissan’s Leaf.
I bought a 2004 Honda DX new. It still runs great. 200,000 miles.
The 25g Parthfinder got me... 😂
Excellent fuel consumption.
This is why I never buy brand new cars. Always buy second hand and save yourself the misery.
What a wonderful exceptional video! Very helpful!
Hi John, An idea for a future show could be 'Selling Privately'. You could cover in more detail things you mentioned today on the subject. For example, the best way to handle the "can I drive it" request which could be a minefield for the uninitiated. Personally, I've always said you will drive it when you hand the cash over (or similar). In other words, buy it and if it doesn't drive as well as I say it will oir as good as it looks I will hand your money straight back. This is because if they crash it then a world of pain and inconvenience ensues. Other aspects include: how to handle the funds exchange. WHERE to meet and why. What should and what should not be SAID by you, the seller. best way to present the car. How to combat any objections the buyer may have. Of course, we are all sellers and/or and buyers at some point so the whole process has to be fair all 'round. I'm not suggesting you do a video on advanced selling strategies but maybe just a 'Private Sales For Dummies' vid. Just my 2c. Thanks for another great vid today - very interesting content! Love your clear and concise layout on the white paper board - very well displayed/laid out.
Good advice. Buy the current model year just after the new models come out and get a handsome discount. And avoid luxury cars as their values drop like stones. You quickly learn this when the insurance company writes off your reasonably new car and gives you diddly squat for it.
buying low mileage 12 months old and keeping it longer usually works out better. in 2005 I bought a 1.9tdi fabia 12 months old for 6.5k....ran it until 2018 and got 1.5k with 70k miles on it....think it was a 9k list car when new
Here in Neverland, private sales are not as much of an advantage because of taxes. When trading old for new with the dealer, sales tax is based upon the difference between the value of the old car vs. that of the new. If I trade the old at 30,000 for the new at 60,000, I save 2400 in taxes (at 8%). That may well equal the difference I would receive from a private sale and without all of the hassle. Of course, government prefers the private sale since it receives tax on the sale price of the old car from the old car buyer and also tax on the full value of the new car from me.
Or, how about buy a used 3 year old car that has a 7 year warranty? Hands down the best option John.
You'll need to get it serviced at the dealer or you will probably have issues with the dealer for warranty. Even better is a 3 year old vehicle which has proven reliability and service it yourself or a good local independent mechanic, car servicing my most dealers is a big rip-off too.
@@billybob1511 No. You can get a car serviced anywhere . Just do the logbook servives and get the mechanic to sign off on them.
@@hellopolly2691 You can but Kia and Hyundai in particular will want to see full details on the invoice for each service what has been done. If its not itemised and you have a warranty claim it might be rejected. If your invoice simply says e.g. '40,000klm service' you're potentially affecting your warranty.
Love the way you read those emails 🤣🤣🤣🤣
Outstanding !!!!! Learned so much .....
John, another exception to naming your car..... Meet Christine 🔥🔥🔥
Good data...thanks over my many years of buying and selling cars I have a general rule of thumb.....around $100,000 car dep $15,000yr $60,000 about $10,000 yr sale after 5 yrs
The missus had a 2008 4x4 Pathfinder and it randomly went into limp mode when going from 2nd to 3rd gear. No fix, no warranty, lucky she was able to trade it in.
Thanks John, Such a useful breakdown, purchase price can really make a difference here.
Thanks John, another quality video! 👍😉
Thanks for the research ideas. A conclusion I've arrived at is- buy a low mileage three year old private party car and hold it for two years. Negotiate $3k off the private party price. And sell it privately. So a Sorento buy at $38800 and sell at 58% of $58,990 for $34k. cuts the cost of depreciation to $46/week.
Anything is worth what someone is willing to pay for it.🤗
John another way to reduce the depreciation rate is to take care of the car. I know it is a bit hard when you have idiots who bang into it at the Coles car park but by taking car of a vehicle can add a couple of grand at time.
In regards to selling privately, I don’t think I would do that again. It is a good idea if selling to a family member or someone who you know but the amount of time wasters that call it just isn’t worth it.
Coles Car Park ! Arrrgh! PTS returning.Kil kill kill !
Even if you park well away from the entrance you will be surrounded by uninsured beater rust buckets when you return. The scum that drive these love throwing open the door into newer cars.
Great informative vehicle John. It has given me a few things to thing about as I contemplate getting rid of my shitbox (land rover) for something different..
I’ve kept my cars over 17 years, except for my 1995 GMC Jimmy that’s been a fixture and it’s probably the last one on the road in Costa Rica! Perhaps, I should have trade them in more often and purchased more mainstream vehicles. But here in Costa Rica with two digit interest rates in US$ and 78% import duties and later in the life of my Jimmy down to 66% import duties meant a loss in book value equivalent to a head on collision. Therefore, I realized soon to be happy with what I have and to keep them as long as possible and wait for a good government to improve our fortunes. That hasn’t happened. When I turned 50 I sold my Ducati Multistrada 620 at a profit, sold my wife’s 2002 Volvo S40 2.0, put in savings, got into a variable rate loan at 9.5% APR rate in US$ and purchased a used 2012 S60 T4. Reliability of the 50 years of age self present has not been on par with other vehicles that I have owned. But that’s my story. As Milan Kundera says in his novels you can’t be blamed for your decisions because you cannot relive your life. Get something you will enjoy and listen to Mr. Cadogan expertise you might learn a thing or two!
if we had to pay depreciation week;y it would mean that the car would be significantly cheaper to buy in the first place - maybe not the worst idea John?
You are doing great favour to public mate👍👍!
Excellent video, one of the best I've seen recently. 👍🇬🇧
Good advice had my present vechile 17 years don't like putting a new suit on a salemans back
Dr Emmett Brown told Marty McFly to never ever ever...ever... take the DMC De Lorean to the year 2020.
...and now we know why.
Ooh is there a reason why we don't see 9 seater SUVs as much?
Maybe front bench seats that can seat 3. 3-4 in the back and 3 in the rear seats? Is there like a trade/manufacturing standard that limits the seats to just 7 seats?
interesting to see what affect depreciation prices will do for the pre- nissan tritan ...
Our Mitsubishi Pajero nx 2015 my16 payed 47k spent 4K on extras such as a bullbar and towing gear and we’re getting 38k back not to bad I’d say.
Auspost and TNT would have to be the automotive service equivalent of the shipping system. I am astonished of how good a service I can get from anything in Murica.
With my experience it's about 7 years before things start breaking in any decent car. Nothing major still, but for the first 7 years usually nothing breaks, and then you start replacing suspension components, belts, brakes, recharging AC or replacing the battery, etc. Also, for me, I'm willing to pay myself that $6000 to endure some assholes who came to buy my car for 20 minutes - seems worth it.
As always John, your videos are well thought out, articulate and I believe provides the most relevant context to the main stream stakeholder. Critical thinking, it’s a weapon of mass destruction isn’t it!
There's a very simple way to eliminate car depreciation entirely is to buy a new lemon car from the start. Only a genuine lemon car will ensure the manufacturer will buy back your car at the negotiated price, allowing you to enjoy the car for free perhaps even for several months! 😅
Noted that UK average yearly use is just 2000. k. less than Oz. New car depreciation appears to give one nothing, but is probably still better than shoes. You get the new car to use- that's it. My current car was bought at 13 years old, not always a good move but depreciation is maybe 500 Quid. My wifes car was a new roll out Micra (old model), bought at same price as used examples locally and has been super. If you've got it to burn, go buy a fancy new car. It's a tricky call nowadays 'cause modern car faults are horrendous.
Simple rule of thumb for depreciation is 20% pa giving roughly 80%, 64%, 50%, 40% and 32% for years 1 - 5 respectively. Indeed its one of the systems that the tax department allow for lease finance calculations.
Hi John, is that a number 2 morse taper 16mm drill in thy hand !
Another great example. I'd like to see a mini version with the bum kicking at the front of the video. Thanks for the information
You don't get nothing for the weekly cost of depreciation ... you gain the enjoyment, freedom, convenience, luxury, safety, technology, economy, reliability, performance ... of driving a new to relatively new vehicle. Hack #4 - Never borrow money for a depreciating asset. Your weekly cost figures increase significantly if interest is added. So, unless you can score one of those occasional, dealer-offered 1% finance deals (without negating other hacks) that in fact leaves you ahead in terms of inflation and potential bank interest, you're far better off to save first and pay cash. Hack #1 can be easily boosted if you time your purchase for December or June ... or during any global pandemic. Hack #5 - Buy used. Let some other schmuck take the massive new car depreciation hit.
Hack #4, Yes! Unfortunately, the entitled people of society fail to realise this. Do the math and the true cost will shock you.
Hey John, Love your style, love your direct approach but what's the deal with the drill bit pointer 😘
Well researched video: you could have pointed out at the end that your service helps with #1. I was surprised that Toyota didn't have a standout result here. Perhaps because you didn't compare Prado ? I would also suggest that the premium models depreciate more. For example when a tight ass like me is looking for 2nd hand corolla with 70k on the clock the sportivo isn't worth any more to me.
Much of the KIA depreciation issues have more to do with consumers not catching up to the fact KIA’s are great cars. KIA still has a lot of PR to overcome their past reputation.
We bought a used low mileage 2016 Sorento SXL in 2017 after comparing the 2017 model to the 2016. We saved roughly 14k used vs new. I also own a KIA Stinger GT2 and people always tell us about both cars, “these are KIA’s?!”