I’m thinking of buying a car instead of leasing since leasing won’t work for me at the moment. I’m sure the knowledge and experience here in the forum could still assist me.
So I was playing with KBB’s trade-in calculator to try to estimate some cars depreciation (BMW/MB/Audi). I tried to get a sense of how much a car I’m interested in buying will be worth in 2 years. As an example, I saw a used 2020 GLC, then went to the calculator and checked the equivalent model 2018 trade-in price to get a sense of 2 years depreciation. Using this example, the 2020 dealer price was $37k, and a 2018 GLC trade-in value low bar was ~$30k. So ~$7k loss.
Would you trust that calculator as a way to gauge deprecation? or are there better tools for that? I plan to trade-in the car to a dealership after 1-2 years. I know there’s no guarantee that a dealer would pay the numbers there and that it’s just an estimation anyway.
So yes, the plan is to get a used car that is not older than 2020/2019. So a loaner/demo car that has great discounts and still in warranty. And then trading it in a year or two timeline.
So KBB should not be trusted to gauge the price that dealers around the area will pay for that car? after all they give a range, and I try to calculate the trade-in price using the lower end of the range to be extra cautious. I’m not looking for a guarantee, but access to data to make a more calculated decision.
That’s why I am trying to be cautious. Most of the Audis I saw were easily ~$15k less in 2 years. The “safer” models seem to be MBs, like C class and GLC. While a 2018 A5 is priced on KBB at ~$20k and a used 2020 costs $40k+, a 2020 GLC with good discount costs around $38k, but after 2 years, the KBB range lower end shows around $30k value for a 2018 GLC. I am okay with losing $8k in 2 years, not okay with $15k. That’s the kind of sense I’m looking to get from a trustworthy tool. KBB is the only one I know that claims to give an estimation.
KBB uses Manhiem auction data so it is pretty reliable, but the Covid shortage might the skew the data and throw a wrench in their predictive model. Fwiw, MB tends to hold value better than bmw and audi.
My simple advice is use nothing from the present market condition as an accurate reflection of anytime in the future as its data from extreme variables. If anything, again hardly accurate but more so modeling the depreciation curve, look at the edmunds tco to get an idea of how GLCs depreciate.
My long answer would be:
KBB would use data generated from the market currently one would have to assume. Your data point might come in higher if its based on the current trend of inflated used car values. The market will correct once eventually. Another point is that the current GLC would most likely be replaced in 2 years, which for mb vehicles means another drop in value.
The safest bet is to lease a fart car. No need to worry about trade in value and no worries if you get damage history. You don’t seem picky about what it is, so just go out looking for the cheapest c class or 3 series loaner (aka fart car) and lease it, with enough hunting I would think under $400/mo is still doable.
Obviously it depends on the scenario and how the numbers line up but you will likely be worse compared to leasing. Difference on sales tax alone ( full on purchase vs partial on lease) may doom your plans ( not sure how WA does sales tax on lease). Not to mention the additional risks of owning the quickly depreciating asset you are planning to resell in a few years.
I appreciate your response. If I am looking for a ballpark figure, an inflated number is not a problem, if it’s only inflated by 20-30%, right? The reason: if I’m using the tool, I’m ready to pay extra $2k, not extra $8k (as in the Audi example). I can’t trust the tool to give me 100% accuracy (nothing is certain in life but death and taxes). To me that still means the tool is reliable to gauge (not to get an actual) price. I have no clue about the market or luxury cars, that’s why I’m asking here. My goal it to know if when KBB shows an $8k deprecation, that is based on real numbers and the actual price I get will be around that number (give or take $1-2k). I want to avoid the $15-20k cars (e.g. like Audi A5) and that’s the sole purpose I am trying to use the tool for.
About the extra costs, I only focus about net car cost. I am not trying to save every penny (after all I’m looking at luxury brands, in the PNW area…), I’m trying to make a smart decision that aligns with how much I am willing to spend.
I hope I made my intentions clearer now. It seems like generally folks around would trust the tool with a deviation of 30% due to COVID. And if there weren’t COVID, the deviation would be smaller.
I wish I could lease. But it doesn’t work for me in my situation. I have family abroad and I might need to travel (and in the worst case, it might be for long periods). I know I’m giving up on the benefits of leasing but transferring out is not simple so it’s a hard constraint for me. I figured out that there are some safer models that don’t depreciate much and that’s what I am trying to put my hands on. I am not on a tight budget, losing $10k of the car value within 2 years is within my budget, $15k-20k is not (I am talking only about car value, not about tax/insurance/gas/etc.).
Is the GLC the only vehicle that will do? If all you need is a vehicle that comes closest to keeping its value is getting a used Toyota, or new Toyota tacoma/4r an option? Every other vehicle your gonna have some form of depreciation, german luxury has the highest.
The GLC is not the only vehicle. An SUV (or compact SUV) is not my first choice, I only mention it since I noticed that this specific model keeps its value the most (compared to A5, C-class, 3 series, etc.). So I am fine compromising on it now that I know that KBB is roughly around the trade-in numbers. I know Toyota, Honda. Kia, Hyundai, etc. generally keep their value. But I want an AWD with more power, and the higher trims lose value quickly.
