Yes, but comparing depreciation values only makes sense if you actually start with what the product cost.
If you start with a vehicle that has an MSRP that’s 20% higher than what it actually sells for, and it depreciates 20% of its value in the first year, then the effective depreciation is $0.
For example, one of the vehicles on the list is an S90, with 40% depreciation in the first year. That sounds like a ton. I happen to have one in my driveway. I paid about 72% of MSRP on the lease. That means it depreciated from 72% of MSRP to 60% of MSRP. That means it actually depreciated 17% in the first year, not 40%.
Now, I got a better than average deal on it, so that’s not really an accurate comparison, but if you’re going to compare market value at the end, you need to compare market value at the start. To do otherwise is to conflate depreciation with initial discount, and that’s what makes this specific study useless.
I’m sure if we went down the list of the worst offenders, that’d be the case with all of them. Which makes total sense… huge discounts up front are naturally going to drive down the resale market.
What’s interesting is that from a percentage standpoint, I’d expect to see more things like the Toyota Mirai and the Fiat 500e. Poor selling vehicles that are also propped up by huge tax incentives that really drive down the resale price.
Don’t know what arms-length means, but your assessment is incorrect. One transaction does not a market make. If that were the case, we’d never be able to hack leases because the one person who paid $10k ADM would have set the market.
Houses are funny things because they are not commodities, and comparing the sale of one house to another is never apples to apples, unlike new cars, which are a lot closer.
So two people agreeing on a price on a house does make a market, for at least a short space of time. More interesting are multiple-offer scenarios, where two people make an offer and the buyer gets to choose the better offer (typically a higher price). In that case it is still just a single person setting the market.
Wish y’all would buy in my neighborhood. LOL. We had one house sell for 50% more than all others on the block. It didn’t raise the rest of the values. Houses that sold right before and right after were still the same. Is that house worth what it sold for? Not a chance. It actually sat on the market for YEARS and then suddenly it sold for 20% over asking. Very very strange. Again, though, it doesn’t set or even change the market, nor does it even affect the true value of that particular house since odds are they would have to list for 20% less than they paid and it wouldn’t sell, just like before they bought it.
That one is different, the fed credit is not from the manufacturer and is a known stable constant. You can go into a dealer and buy an i3 at msrp because the dealer didn’t give you any incentives but they can’t prevent you from getting the fed credit…it’s out of their hands.
From what I’ve seen, the better leasing a car is new, the worse is depreciates used (Not always the case).
For example, BMW and Infiniti usually lease the best, but their values tank in the used car market
Acuras and Volvos don’t lease the best, but tend to hold their value a lot better in the used car market.
I’m sure that has a big part in used car pricing (Why buy a used one when I can lease it for a lower payment, or why lease a new one when I can finance a slight used on for a lower payment)
I’m sure this might be geography dependent, but, IMHO, houses are absolutely commodities, and the point of the appraisal is to make it more of an apples to apples comparison.
But, yes, certainly comparing cars is a little easier than comparing homes.
I think this argument is clouded by Leasehakr bias. You may have bought/leased any of these cars at a significant discount from MSRP, but I don’t believe that the vast majority of the buying public does.
I’ve talked to people that have had very high cost BMW and Audi leases and purchases. Maybe not at MSRP, but not nearly as low as the ones discussed here. I’ve met a few people who have gotten good deals in real life on BMW loaners, but the majority of those that I know who have a BMW or audi are not realizing huge discounts
Leasehakrs on a BMW are really getting the best of both worlds in this sort of transaction, inflated residuals, so you’re not paying the full value of the depreciation, and working the sale price to very significant discounts.
Yes and no. Many of these cars have significant incentives applied to them, so even if John Q Public gets $0 discount from the dealer, they’re still paying way less than MSRP.
I wanted to mention that since i have one but from my observation of monitoring the used market for the past 3 years i can confidently say the RV is bs…too low. These cars are selling above that. My old eGolf had a RV of $11,600 (7500/36) and after a bad accident still sold at auction for $9999.
On the other hand, the 3 year old 500e are selling for $4-5K.
