25% drop in second hand car prices possible

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What you say may well be true for those who buy new large petrol engined cars, especially if they load them with extras. But if you take the cheaper models in the A, B, C and E class ranges they do not end up being sold at 30% of the new price when 3 years old. Most sensibly sized diesel models achieve a residual of about 50% of the new list price.
Well all I can say is I've just bought a 4 year old turbo diesel for 17% of its original cost.

and the costs incurred in years 3 to 6, plus the heavy cost of a full extended warranty, the comparison between old and new is not so clear cut. Yes seven more years life left in a 3 year old, and more, but read the threads on some of the hefty bills some owners have had to meet on older cars, to see that none of these decisions are completely clearcut.

I fail to understand this. I've never had a new car and I've never had the need for any extended warranty, nor have I ever had any substantial repair costs for any vehicle during my ownership. Do the research, purchase wisely and you shouldn't hit any problems like this. Up until recently my combined household vehicle age was 80 years old and all are so reliable that we don't even bother with any recovery service membership.

Its the new cars that are unreliable, older ones have had the service recalls and had the problems ironed out during the ownership period of the people willing to pay top dollar to beta test for the manufacturers.

All too many people are hoodwinked into buying new, and then duped into paying premium money for main dealer servicing which nowadays is little more than oil and filter changes in order to maintain some warranty that often isn't worth the paper it was written on.

Long may people continue to give away their three year old cars for chump change. :bannana:
 
Well all I can say is I've just bought a 4 year old turbo diesel for 17% of its original cost.

.....

I fail to understand this. I've never had a new car and I've never had the need for any extended warranty, nor have I ever had any substantial repair costs for any vehicle during my ownership. Do the research, purchase wisely and you shouldn't hit any problems like this. Up until recently my combined household vehicle age was 80 years old and all are so reliable that we don't even bother with any recovery service membership.

I think that a perfectly valid scenario, and even if you did get hit with a big bill, then you can amortise it over all of the cars and all of the years you've owned them, which may or may not make you feel better.

However, and this is where online forums are dangerous, if you get a problem with a "modern" 6 or 7 year old car, then you could well be looking at an economic write off. Ford TDCi's seem to have problems after 3-4 years that are are unfixable.

Not very long ago I ran a company car for 3 years, and for the last 18mths it was in and out of the garage with engine related problems - it was soul destroying, and I wasn't even paying the bill! Some poor sod would have bought that car at 3 yrs and has probably committed suicide now!
 
Well all I can say is I've just bought a 4 year old turbo diesel for 17% of its original cost.

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Well I was referring to Mercs and I specifically quoted popular models of the A, B C and E class ranges where you would need to pay about 50% to buy a 3 year old one. Then the case for buying new is not as bad as many think.

You may have been lucky buying secondhand; many others have not.
 
You may have been lucky buying secondhand; many others have not.
Being able to spot a good car also helps.

Like Spike I'm in the never brough a new car, or extended warranty camp. Most of the cars I have owned I've owned for at least half their lifetime and (the second half;) ). Aside from wear and tear bills, in 25 years of being a 2 or 3 car family (ave mileage of about 30K), the only things we've had that could be classed as major repairs are; a head gasket on the wife's Astra (£330, including cambelt/water pump while they were at it) and a top end rebuild on an Astra (at 150K) for about £150 of parts (labour by yours truely). Oh and a condensor on the Merc a couple of weeks ago (but that was covered by the garage warranty).

Just done a quick sum and the total purchase price is about £30k - running two new cars for just three years could easily loose that in depreciation.
 
All too many people are hoodwinked into buying new, and then duped into paying premium money for main dealer servicing which nowadays is little more than oil and filter changes in order to maintain some warranty that often isn't worth the paper it was written on.

Long may people continue to give away their three year old cars for chump change. :bannana:
The MB warranty is worth pure gold. On over a dozen Mercs under warranty I have never had to pay for any problems at all.

And nobody gives a away a three year old Mercedes for chump change. Whether you check Glass's Guide or CAP or What Car you will find the residuals on most popular, sensibly engined MBs are around 50% after 3 years.
 
The MB warranty is worth pure gold. On over a dozen Mercs under warranty I have never had to pay for any problems at all.

I'm not sure whether to laugh or cry at this statement. What are you saying... that new mercedes automobiles are so unreliable that the warranty is a necessity? Or are you saying that you've had problems with each of the 12 new mercedes that you've bought and had to make warranty claims?


Whether you check Glass's Guide or CAP or What Car you will find the residuals on most popular, sensibly engined MBs are around 50% after 3 years.

Really?

I dont believe thats the case any longer. Despite what the 'guides' say, You can currently buy a 2005 W203 for under eight grand (Around 30%), a W211 for 8.5k (around 30%), and a CL500 for £20k (around 20%).

Residuals are not what they once were.
 
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I'm not sure whether to laugh or cry at this statement. What are you saying... that new mercedes automobiles are so unreliable that the warranty is a necessity? Or are you saying that you've had problems with each of the 12 new mercedes that you've bought and had to make warranty claims?

.
None of those things as you well know. Just read what I said instead of inventing what you wish I had said.
 
Sorry but if the car was built properly in the first place the warranty would be worthless since you'd never have the need to make a claim.

By saying its worth its weight in gold strongly suggests you relied heavilly on the warranty.
 
I dont believe thats the case any longer. Despite what the 'guides' say, You can currently buy a 2005 W203 for under eight grand (Around 30%), a W211 for 8.5k (around 30%), and a CL500 for £20k (around 20%).

Residuals are not what they once were.
The CL500 is not one of the models I quoted and is hardly an example of a popular model with a sensibly sized engine.

I accept that residuals are falling at the moment for larger cars and all past truths may change completely if fuel prices rise much higher. I was merely saying that buying an MB new has not been as self-evidently silly as many have assumed given that the residuals have been pretty good on popular smaller engined MBs especially diesels. Certainly until recently Glass's Guide were giving the smaller engined A, B C and E class cars residuals which most other makes can only dream of.
 
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Forget Glasses guide Hawk, you can buy a 3 year old C220CDI for 30% of its original purchase price tomorrow if you wished and thats the sticker price too with no haggling.
 
Forget Glasses guide Hawk, you can buy a 3 year old C220CDI for 30% of its original purchase price tomorrow if you wished and thats the sticker price too with no haggling.
You can't just forget Glass's Guide: it is the trade bible and the figures are based on real deals by real dealers all over the country. You may have found one 3 year old C220cdi at 30% of list but there are plenty of others at very different prices. How many miles has it done? What conditon is it in?
 
Theres plenty around that price, some with high mileages but others are well specified with very reasonable mileages. Sure your not going to get a deal of that nature by buying direct through mercedes but all I am saying is that it is possible to purchase at those prices. I happen to know whats what at the moment as I've just spent the last 4 months searching.

Glasses guide (and others) are no more than guide prices. They do not control the market so a car is only worth what someone will pay for it. If you try and sell your 3 year old Merc at 50% of cost then you're up against some really stiff competition and the likelihood is your going to struggle like hell to sell at that price.
 
The part ex price for a mid 2005 C220cdi Avantgarde is £11,200 in average condition and £12,450 in excellent condition. I have always managed to get at least the Glass's Guide figure in the past when trading in for another MB and have then haggled a discount off the new ones.

But I admit I'm glad not to be trading in now in these uncertain times. That's one of the reasons I bought my A class on a PCP with a guaranteed residual (GFV) of 50% of what I paid for the car.
 
I guess one has to be careful on what the original cost is. In my mind, £25k gets you a poverty spec C220CDI. By the time you've specified leather, an automatic transmission and a few of the other toys found as standard on other marques, you're looking more closely at £30k OTR.

In which case, £11200 is a fair way short of 50%. And thats a trade in price, how much less would it be if you were just selling rather than trading it in?
 
I guess one has to be careful on what the original cost is. In my mind, £25k gets you a poverty spec C220CDI. By the time you've specified leather, an automatic transmission and a few of the other toys found as standard on other marques, you're looking more closely at £30k OTR.

In which case, £11200 is a fair way short of 50%. And thats a trade in price, how much less would it be if you were just selling rather than trading it in?

I don't disagree that if you specify leather and COMAND and other tasty goodies, you sometimes get nothing back for the extras and rarely get more than 50% after 3 years. You have to choose the smaller engines and stay out of the toy cupboard if you want anywhere near 50%.

I had a brief look at the MB approved used search engine on the MB website. Dealers are asking around 14k for Avantgarde C220cdi's from 2005 with book miles. Maybe in the present state of the market they will have to cut prices and part ex prices will suffer some more. One of the problems is that the new model C class is now well under way and that almost always clobbers residuals of fairly young old model cars. Very difficult to minimise depreciation in current times.
http://www.mercedes-benz.motortrak....6822,14108655,14033330&vidindex=4&starthit=15
 
That's one of the reasons I bought my A class on a PCP with a guaranteed residual (GFV) of 50% of what I paid for the car.

Once again you're being disingenious with the figures - you're ignoring the deposit, never mind that residuals are not expressed as a percentage of the discounted price. On the CLC deal you posted earlier, the deposit is £3K. Pay a big enough deposit and the car could have a residual of 100% - and you'd be writing "good value". :rolleyes:


I had a brief look at the MB approved used search engine on the MB website. Dealers are asking around 14k for Avantgarde C220cdi's from 2005 with book miles.
So the dealers probably gave about £11K in p/x for those cars.

Dealers have a phrase they use when looking at Glass's Guide - they'll say a car is "over book". I experienced it when getting rid of Mrs Rory's 1.6RXE Clio a few years ago - we were being offered (and I tried dealers far and wide) around £3K for the car when the guide p/x value was £4K - a big difference.
 
Once again you're being disingenious with the figures - you're ignoring the deposit, never mind that residuals are not expressed as a percentage of the discounted price. On the CLC deal you posted earlier, the deposit is £3K. Pay a big enough deposit and the car could have a residual of 100% - and you'd be writing "good value". :rolleyes:


No I'm not ignoring the deposit. If you go to the thread I put up on PCP you'll see I suggest you divide the deposit by 3 (to get an annual cost) and add that to the payments to get the total you are paying. Still very good value IMO. I'm afraid it is you who is being disingenuous with figures. Do you know of anyone who has put down a 100% deposit on a PCP? I thought not.

With a typical deposit (or any reasonable deposit) a high GFV is beneficial: it means you pay less for depreciation and it means they take the risk on depreciation being bigger than the GFV and not you. Very nice to have that in present turbulent times -provided you get a reasonable discount, and a competitive APR.

You say: "residuals are not expressed as a percentage of the discounted price." Well they are by me and they should be by anyone interested in the real cost of owning a car. It is what you actually pay for the car that matters, not the list price.
 
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No I'm not ignoring the deposit.
You certainly did on the CLC deal - the £3K deposit means the real residual is more like 40% than the 60% you trumpted.
With a typical deposit (or any reasonable deposit) a high GFV is beneficial: it means you pay less for depreciation
A high GFV % is easily achievable as the CLC deal demonstrates, because you've effectively already paid a chunj of the depreciation in advance!! How mad is that?
 

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