Depreciation black hole

[Daleman]

Originally Posted by Tups74

I purchased my 06 plate XC90 in Aug 2009, I travelled to the midlands and paid a reasonable price for it from a main dealer. Last month whilst at the local dealership picking up some parts, a member of the sales team said that a customer had seen it on the forecourt (nowhere else to park) and asked if it was for sale, therefore would I be interested in selling or part-ex my XC90. Out of curiosity I asked what offer they had in mind, turned out the offer was approx £500 less than what I paid for it, so a £500 loss for 6 months and 4000 miles worth of use is not that bad.

I think, if you think about it, this was probably the standard “dealer fishing for a sale” ploy .He said he had a customer for your relatively old XC90 and offered you an advantageous price. The dealer would have made his money out of the deal on the newer car he would have sold to you if you part exchanged. Or when he supplied your car to this customer he had waiting he would have offered that customer a knock down price for his part ex. He would have had to make his money somewhere. They have got to make a profit and there is a difference (often large) between trade and retail prices.

Also in this last year used car prices have actually gone up (lessening depreciation temporarily) because of the effect of the shortage of used cars available (people are hanging on to them) due to the economic climate.

You may think you lost only £500 in six months ( on paper) but the dealer probably made £2000 on that deal to you six months ago when you bought it and he will want to make similar from someone if he turns it over again. There is approximately a £2000 spread between trade and retail prices on that type of vehicle.

[dejongj]

I think you are right in that the paper depreciation is actually much larger as secondhand cars have gone up in value...But that doesn't change the fact that in real money terms it is looking much better...

I wouldn't be so cynical about car sales people, we had exactly that happening with our Patrol...We were doing the deal for our Murano for my wife and they asked to borrow the keys for a test drive for a prospective customer....The patrol was gone that week, for only 6k less than I bought it 3 years and 55k miles ago....We still had a wait 1.5month on our Murano, but made certain we got a loan car to bridge the period as part of the deal...

[catch22]

I bought my 54 plate S40 for £5990 from a non Volvo dealer and did a deal on it 9 months later back in October 09 with a Ford dealer at £5800 in PX for a Focus priced at £6495. When it came to the paper work, the Focus was invoiced @ £6200 and the PX @ £5500.

The Focus asking price, that I checked via a Parkers subscription appeared correct. The S40 was indeed at £5500, I just wanted the extra £300 because I'd spent bits on it including DIY parking aids, which I actually was allowed to take out, and install on the Focus.

Obviously the way it is stacked up on paper gives them better profit in the deal, some where along the line. This may relate to the deal done on the car they sold me that they previously PX'ed with somebody else, besides a possible VAT saving.

Incidently I popped back the next morning because I had left my foot pump boot, and the S40 was on their car lot at £8000 which was way over book.

It takes some understanding this car pricing mularky. But second hand prices have indeed been going up, due to the financial turmoil we have been and still are going through.....funny old world

[Daleman]

Yes the Murano is a bit of a depreciation nightmare. Good that you lost little on your Patrol it will make up for the loss on the Murano. Good car Murano just those big petrol engines are killers now a days.

Crunched a few numbers on the Murano vs Volvos 2008 58 models 20 k mileage

XC 90 auto new £38537 trade now £25478
XC60 auto new£25385 trade now £20502
Murano auto new £29747 trade now£12321

[ChrisE]

For the difference in depreciation you can - if buying 2nd hand - buy an awful lot of petrol!

[dejongj]

Originally Posted by Daleman

Yes the Murano is a bit of a depreciation nightmare. Good that you lost little on your Patrol it will make up for the loss on the Murano. Good car Murano just those big petrol engines are killers now a days.

Crunched a few numbers on the Murano vs Volvos 2008 58 models 20 k mileage

XC 90 auto new £38537 trade now £25478
XC60 auto new£25385 trade now £20502
Murano auto new £29747 trade now£12321

Ah but on a 58 Reg you were able to buy a brand new Murano for £16k ;-) And then the picture looks a bit different....It all just depends on what you buy the vehicle for in the first place...And the trade know hence depreciation gets adapted...That is why I won't be buying a MY2011 XC90 unless the discount is big, no make that huge....

[dejongj]

Originally Posted by ChrisE

For the difference in depreciation you can - if buying 2nd hand - buy an awful lot of petrol!

Yes and in the real world there is only 7mpg difference between the XC90 diesel and the Murano Petrol...But people don't seem to think that like that...It is funny how it went, nobody in the UK used to like diesel and now they won't buy a car unless it is diesel even when in a lot of cases it doesn't make economical sense...

[NewVolvo]

Originally Posted by dejongj

Yes and in the real world there is only 7mpg difference between the XC90 diesel and the Murano Petrol...But people don't seem to think that like that...It is funny how it went, nobody in the UK used to like diesel and now they won't buy a car unless it is diesel even when in a lot of cases it doesn't make economical sense...

Exactly..... as a note, if you would buy a Golf 1.9Tdi compared to a Golf 1.6 (Petrol) you would have to do approx 56000 mls before you have actually reached +/-. Any further miles are on + of course for the diesel.

Same scenario with Fiat's 500...... 176000miles!!!

[Daleman]

Originally Posted by dejongj

Ah but on a 58 Reg you were able to buy a brand new Murano for £16k ;-) And then the picture looks a bit different....It all just depends on what you buy the vehicle for in the first place...And the trade know hence depreciation gets adapted...That is why I won't be buying a MY2011 XC90 unless the discount is big, no make that huge....

Yes I agree if you bought the Murano for £16K you have beaten depreciation hands down. I didn’t think they ever sold them new that cheap! I take my hat off to you

[dejongj]

Originally Posted by Daleman

Yes I agree if you bought the Murano for £16K you have beaten depreciation hands down. I didn’t think they ever sold them new that cheap! I take my hat off to you

Unfortunately we didn't...We bought the one for my wife new in 2005...No discounts available then :-( I just know as it wasn't a good time to sell when they sold them new so cheap...But then I found out I could by my company a Navara Aventura which was list £29k, also for £16.5k including VAT and VAT can be claimed back on those...So I just had to ;-)