Beating depreciation in this inflated market??
Discussion
Just thinking about this recently in terms of my next purchase.
Seems to me that every car at the moment nearly new to modern classic to your boggo standard shed is overly inflated price wise.
So if you are thinking of or more to the point, needing. To buy a car right now - is there a way to play the odds and minimise the amount you might lose when this crazy bubble eventually bursts (Or will it burst? Is it just now how it is?)
I've been pondering this. I made a hit on my last car - i knew it was going to happen ( had a lengthy post about it - my own fault really). Fuel crisis, big engine, etc. There was very little interest and i took a loss. I've recouped that loss in saving money from my wages since then. And i'm now within about £1-1500k of where i started (vs total of £6k down when i sold - fees, warranty, car etc).
So now i want to buy a new car. I don't necessarily need to. But i want to. I'm a petrolhead its what i spend my money on - why i work. I work to live not live to work.
And i thought, there must be lots of people out there right now probably having the same conundrum. Can you buy a car in an inflated market AND minimise the amount of money you lose during ownership should this bubble burst - and how do you do it?
Well for me, the answer feels like buy something that is a) probably at the bottom of its depreciation b) buy something that is relatively sort after/coveted (for engine/chassis/badge).
The cars i've happened on in my time scrawling the for sale adverts of every internet site going are the following and i've added reasons for why i think they are good bets -
Audi RS3 - 8p - You can get one of these for circa £20k with good mileage (70/80k) - i have been looking at these for a few years and they've not really dropped much below the 17k mark for cars with 120K + . So if you spend £20k on one with 70k and put 15k on in 3 years - the likelihood of selling it as they get rarer over the next 3 - 5 years - is minimal. You'd likely lose maybe £1-2k at most AND there is a possibility that as its rare/niche/RS badged etc. You could see numbers continue to creep up even if the bubble burst.
BMW e93 M3 - Yes not the coupe or saloon but the vert. Regardless of issues people see with it being heavier etc. A decent vert will cost about £15k currently with 80-100k on the clock. In good condition. As low as £13k if its a little leggy. I don't think you can lose money on a v8 m3 in any shape/guise at £13-15k - it just simply will never go lower. The e46 bottomed out at the same kind of place and those are now more valuable than the e93 verts.
BMW e92 - Yes the coupe is much more tempting to buy than the vert. They are more sort after. Again same principle. About £18k will get you a decent spec with ok mileage. I don't see these depreciating much in the current market over the next 3 years. You'd likely lose maybe £1-2k if you are unlucky - but same as the Audi - i can see prices starting to creep up even if you don't take the bubble into account.
Audi RS4 (B7) - these seem to have bottomed out well before the covid bubble. A decent one for £15-20k is definitely doable with under 100k on the clock. But even those with desirable spec and well over 100k in mileage still go for strong money. Again. You could live with it daily and not really lose money on selling it as i see it.
Outsider chance - C63 AMG - I haven't seen prices move on these for a while. The original cars up to 2010 albeit less desirable seem to be at their lowest point at around £18k. Can't see them going down much more over the next 3 years. If you put on circa 5-8k a year. You are likely to still make a good 70% of your money back.
There seems to be a trend that i've spotted and its cars with engines that are no longer really put in production cars and those that are high marques of well established premium brands. Also cars that are built roughly 2007 - 2010. Was this a halo period for these type of cars? What other cars built in this time frame are increasing? I'm seeing Hot Hatches of the same period going up in value slowly, again from the same period - Focus RS, Civic Type R, Renaultsports. So are these halo years/halo cars?
There are others out there doing ok but for the most part these seem to have now hit bottom. Do you agree/disagree? What cars would you wager your hard earnt cash against in the hope of minimising (not completely i realise and only a chance - you can never know for sure) the amount of money you may lose when you sell?
As for what i buy next. I'm torn to something modern and more comfy and knowing i'll likely lose money again OR something like one of the above which are more than enough to live with every day and ultimately much more lively/enjoyable than a lot of the sterile modern offerings.
My ultimate plan is i'm trying to trade up.
OR sell my weekender as well and just move to one car like an a45s, M2 comp or C43 coupe - much more desirable things to drive now than what i've had before but i know i'd lose money on them in the long run being newer and far from the bottom of their depreciation.
Anyway. Interesting thoughts over the weekend, interested to hear others opinions. You may think i'm nuts, won't be the first time i've heard it LOL. Just interesting to see what you all think.
Seems to me that every car at the moment nearly new to modern classic to your boggo standard shed is overly inflated price wise.
So if you are thinking of or more to the point, needing. To buy a car right now - is there a way to play the odds and minimise the amount you might lose when this crazy bubble eventually bursts (Or will it burst? Is it just now how it is?)
I've been pondering this. I made a hit on my last car - i knew it was going to happen ( had a lengthy post about it - my own fault really). Fuel crisis, big engine, etc. There was very little interest and i took a loss. I've recouped that loss in saving money from my wages since then. And i'm now within about £1-1500k of where i started (vs total of £6k down when i sold - fees, warranty, car etc).
So now i want to buy a new car. I don't necessarily need to. But i want to. I'm a petrolhead its what i spend my money on - why i work. I work to live not live to work.
And i thought, there must be lots of people out there right now probably having the same conundrum. Can you buy a car in an inflated market AND minimise the amount of money you lose during ownership should this bubble burst - and how do you do it?
Well for me, the answer feels like buy something that is a) probably at the bottom of its depreciation b) buy something that is relatively sort after/coveted (for engine/chassis/badge).
The cars i've happened on in my time scrawling the for sale adverts of every internet site going are the following and i've added reasons for why i think they are good bets -
Audi RS3 - 8p - You can get one of these for circa £20k with good mileage (70/80k) - i have been looking at these for a few years and they've not really dropped much below the 17k mark for cars with 120K + . So if you spend £20k on one with 70k and put 15k on in 3 years - the likelihood of selling it as they get rarer over the next 3 - 5 years - is minimal. You'd likely lose maybe £1-2k at most AND there is a possibility that as its rare/niche/RS badged etc. You could see numbers continue to creep up even if the bubble burst.
BMW e93 M3 - Yes not the coupe or saloon but the vert. Regardless of issues people see with it being heavier etc. A decent vert will cost about £15k currently with 80-100k on the clock. In good condition. As low as £13k if its a little leggy. I don't think you can lose money on a v8 m3 in any shape/guise at £13-15k - it just simply will never go lower. The e46 bottomed out at the same kind of place and those are now more valuable than the e93 verts.
BMW e92 - Yes the coupe is much more tempting to buy than the vert. They are more sort after. Again same principle. About £18k will get you a decent spec with ok mileage. I don't see these depreciating much in the current market over the next 3 years. You'd likely lose maybe £1-2k if you are unlucky - but same as the Audi - i can see prices starting to creep up even if you don't take the bubble into account.
Audi RS4 (B7) - these seem to have bottomed out well before the covid bubble. A decent one for £15-20k is definitely doable with under 100k on the clock. But even those with desirable spec and well over 100k in mileage still go for strong money. Again. You could live with it daily and not really lose money on selling it as i see it.
Outsider chance - C63 AMG - I haven't seen prices move on these for a while. The original cars up to 2010 albeit less desirable seem to be at their lowest point at around £18k. Can't see them going down much more over the next 3 years. If you put on circa 5-8k a year. You are likely to still make a good 70% of your money back.
There seems to be a trend that i've spotted and its cars with engines that are no longer really put in production cars and those that are high marques of well established premium brands. Also cars that are built roughly 2007 - 2010. Was this a halo period for these type of cars? What other cars built in this time frame are increasing? I'm seeing Hot Hatches of the same period going up in value slowly, again from the same period - Focus RS, Civic Type R, Renaultsports. So are these halo years/halo cars?
There are others out there doing ok but for the most part these seem to have now hit bottom. Do you agree/disagree? What cars would you wager your hard earnt cash against in the hope of minimising (not completely i realise and only a chance - you can never know for sure) the amount of money you may lose when you sell?
As for what i buy next. I'm torn to something modern and more comfy and knowing i'll likely lose money again OR something like one of the above which are more than enough to live with every day and ultimately much more lively/enjoyable than a lot of the sterile modern offerings.
My ultimate plan is i'm trying to trade up.
OR sell my weekender as well and just move to one car like an a45s, M2 comp or C43 coupe - much more desirable things to drive now than what i've had before but i know i'd lose money on them in the long run being newer and far from the bottom of their depreciation.
Anyway. Interesting thoughts over the weekend, interested to hear others opinions. You may think i'm nuts, won't be the first time i've heard it LOL. Just interesting to see what you all think.
Seems to me that the idea of beating depreciation is a relatively new concept. Only a few years ago (before covid) it was generally accepted that pretty much all cars will lose money except maybe the really rare and exotic stuff. Nowadays it’s like people expect to make money on a Vauxhall Corsa!
There’s always been a trade off between depreciation and running/maintenance costs. Yes of course you could buy an old BMW M car at the bottom of its depreciation curve but it will cost you a lot to keep it on the road and in good condition so you might not necessarily be any better off in the long run. This also depends on how much maintenance you are able to do yourself in order to save some money and how much you’ll use the car.
I would expect any modern car to lose money over the coming months and years. Some will fare better than others but which ones will be anybody's guess. Personally I wouldn’t worry about it too much. Buy the car you want and enjoy it. If depreciation is a real concern then spending less on the purchase price is usually the best way to avoid losses. A cheap car can’t lose that much after all.
I quite like the idea of a roadster next. Long term I think they may continue to be desirable as there doesn’t seem to be much EV progress with that type of car. So far I’ve never seen an attempt at an electric MX5 equivalent, at least not anything which is remotely affordable.
There’s always been a trade off between depreciation and running/maintenance costs. Yes of course you could buy an old BMW M car at the bottom of its depreciation curve but it will cost you a lot to keep it on the road and in good condition so you might not necessarily be any better off in the long run. This also depends on how much maintenance you are able to do yourself in order to save some money and how much you’ll use the car.
I would expect any modern car to lose money over the coming months and years. Some will fare better than others but which ones will be anybody's guess. Personally I wouldn’t worry about it too much. Buy the car you want and enjoy it. If depreciation is a real concern then spending less on the purchase price is usually the best way to avoid losses. A cheap car can’t lose that much after all.
I quite like the idea of a roadster next. Long term I think they may continue to be desirable as there doesn’t seem to be much EV progress with that type of car. So far I’ve never seen an attempt at an electric MX5 equivalent, at least not anything which is remotely affordable.
All the above sounds reasonable to me.
For age, I think 10-15 years is a sort of 'sweet spot' where cars aren't too old, yet are likely approaching their value floor.
Finding a car with few expensive failures in that age range can help minimise the sum of depreciation and maintenance costs.
In terms of car type, the car that was depreciation-proof even in the old days would be a Caterham; I think this represents the general trend where the more 'extreme' / 'exciting' a car is, the better its depreciation prospects are. I think this is because people tend to want a brand new car to offer a level of comfort and utility, whereas buying an old car as a classic/toy, they're not expecting it to be a daily driver, so being noisy, cramped or without luggage space is less of a concern than being exciting to drive.
For some examples, the 350Z has been moving up lately, I think it's passed its minimum. The A110 has held value fairly well (£52k Premiere Editions asking ~£45k four years later), with limited new RHD sales and reasonable enthusiast demand. I think the GT86 may stabilise once the GR86 situation shakes out.
Too many factors outside of your control and the future seems unpredictable.
I would just buy the next car that you really want, that truly brings you joy with every drive, without getting too worked up over how much it "might" depreciate during your ownership, unless of course, you want to treat your next car purchase as some kind of investment.
I would just buy the next car that you really want, that truly brings you joy with every drive, without getting too worked up over how much it "might" depreciate during your ownership, unless of course, you want to treat your next car purchase as some kind of investment.
raspy said:
Too many factors outside of your control and the future seems unpredictable.
I would just buy the next car that you really want, that truly brings you joy with every drive, without getting too worked up over how much it "might" depreciate during your ownership, unless of course, you want to treat your next car purchase as some kind of investment.
This. I think you’re over thinking about it. I’m not made of money but I get what I enjoy and if after my ownership the price is higher than expected then it’s a nice surprise.I would just buy the next car that you really want, that truly brings you joy with every drive, without getting too worked up over how much it "might" depreciate during your ownership, unless of course, you want to treat your next car purchase as some kind of investment.
From what you’ve said in your first post I’d guess you’re looking for the following?…
Budget up to 20k
Sporty and quick but comfortable and practical enough for daily driving.
Preferably German so Audi, Merc or BMW
A bit on the special side to keep the value up.
The V8 options are worth a go if you’re up to it and they appeal to you. Might be a bit heavy on the running costs, especially as fuel prices increase. But they are a dying breed and I think there will be people who want them for the next few years before we are all forced into an EV.
Other than that you could compromise with a couple less cylinders.
M235i manual can be had for around 15k now. They were very well received when the came out. Not too old and should be quite reliable with sensible running costs.
Audi TTRS could be worth a look if it has enough room. Special engine and fairly rare. Again 15k should be enough for a nice example.
I don’t think either of those will lose big money in the near future.
Budget up to 20k
Sporty and quick but comfortable and practical enough for daily driving.
Preferably German so Audi, Merc or BMW
A bit on the special side to keep the value up.
The V8 options are worth a go if you’re up to it and they appeal to you. Might be a bit heavy on the running costs, especially as fuel prices increase. But they are a dying breed and I think there will be people who want them for the next few years before we are all forced into an EV.
Other than that you could compromise with a couple less cylinders.
M235i manual can be had for around 15k now. They were very well received when the came out. Not too old and should be quite reliable with sensible running costs.
Audi TTRS could be worth a look if it has enough room. Special engine and fairly rare. Again 15k should be enough for a nice example.
I don’t think either of those will lose big money in the near future.
ChrisH72 said:
From what you’ve said in your first post I’d guess you’re looking for the following?…
Budget up to 20k
Sporty and quick but comfortable and practical enough for daily driving.
Preferably German so Audi, Merc or BMW
A bit on the special side to keep the value up.
I guess you aren't far off. But from my buying perspective, i'm looking to buy and sell the same car in the next 6-8 months putting on roughly 3-5k (at the very max!) in that time frame. Budget up to 20k
Sporty and quick but comfortable and practical enough for daily driving.
Preferably German so Audi, Merc or BMW
A bit on the special side to keep the value up.
The reason for this? Well i'm looking to use the next purchase as a stepping stone to buying the 997 i want, come the end of the year. While i save the balance in cash. Now, i cannot afford the 997 i want till then (997 turbo or 997 Carrera 4 GTS). But i need a car and I don't want to put the miles on my current weekend car, why? Well it will form part of the purchase for the Porsche and the more miles i do in that, the less that will be worth too. I currently have 20k cash, 12-15k in a weekend car that i'm using as a daily - the balance of about £40k i'll have saved by the end of the year from working. I never finance a car - i buy outright, 1k, 10k or 100k. Just been brought up to work hard for what i want. I know i could go PCP it right now and not have the worry.
Therefore i'd like to, as you've put above, put something in use for the next 6 - 8 months, that is as you say "Sporty and quick but comfortable and practical enough for daily driving.". Life is too short for driving 2k wrecks that i have to spend several hundred quid per week on fixing bits and bobs. I want to just turn the key and go every time. All be, go quickly and comfortably and practically enough in something that is nice to be in.
The issue for me, which is kind of part of why i was thinking this way, is i didn't think id lose the 6k on the car i had last. On paper/research, it should have been a solid buy. Simply, it wasn't. But to lose 6k in 6 months was a bit of a blow to my plan.
So with wanting to stick to my plan of buying the 997, i want to "invest" my 20k for 6-8 months in the aforementioned Sporty and quick but comfortable and practical enough daily driver - so that when i come to sell it Oct - Dec - I have lost as little as possible, so it can be put towards the purchase of the 997 i want. Without scuppering the plans till the spring of the following year. Which is when i want to be driving it, not still saving and looking for it - I've noted Porsche/Sport car prices tend to climb in spring months (good weather = more likely to buy a sports car i guess).
I know i'm mad, but just the plan i've got in my head and hard to shake it. I know many will say
"put the 18k in the bank and buy a shed"
"You'll always lose money on a car" etc. etc.
Not going to refute that one bit. I am sure i am nuts. But that is my feelings.
Now. All that said, it was not the entire reason for my post - i kind of know what i'll buy, some of the ones i listed, are on that list. BUT, i still wondered generally, even if i weren't in this position. Could you avoid that balloon loss when the bubble bursts? I dunno, like i said it was food for thought over a bottle of wine at the weekend and wondering what fellow Pistonheaders thought.
Interesting to hear the opinions.
stevekoz said:
But from my buying perspective, i'm looking to buy and sell the same car in the next 6-8 months putting on roughly 3-5k (at the very max!) in that time frame.
Therefore i'd like to, as you've put above, put something in use for the next 6 - 8 months, that is as you say "Sporty and quick but comfortable and practical enough for daily driving.". Life is too short for driving 2k wrecks that i have to spend several hundred quid per week on fixing bits and bobs. I want to just turn the key and go every time. All be, go quickly and comfortably and practically enough in something that is nice to be in.
The issue for me, which is kind of part of why i was thinking this way, is i didn't think id lose the 6k on the car i had last. On paper/research, it should have been a solid buy. Simply, it wasn't. But to lose 6k in 6 months was a bit of a blow to my plan.
So with wanting to stick to my plan of buying the 997, i want to "invest" my 20k for 6-8 months in the aforementioned Sporty and quick but comfortable and practical enough daily driver - so that when i come to sell it Oct - Dec - I have lost as little as possible, so it can be put towards the purchase of the 997 i want.
Interesting to hear the opinions.
I bought a highly specced V8 estate for less than the amount you lost on your last car in October and sold it for £1,450 more in April. It was “sporty and quick but comfortable and practical enough for daily driving." Therefore i'd like to, as you've put above, put something in use for the next 6 - 8 months, that is as you say "Sporty and quick but comfortable and practical enough for daily driving.". Life is too short for driving 2k wrecks that i have to spend several hundred quid per week on fixing bits and bobs. I want to just turn the key and go every time. All be, go quickly and comfortably and practically enough in something that is nice to be in.
The issue for me, which is kind of part of why i was thinking this way, is i didn't think id lose the 6k on the car i had last. On paper/research, it should have been a solid buy. Simply, it wasn't. But to lose 6k in 6 months was a bit of a blow to my plan.
So with wanting to stick to my plan of buying the 997, i want to "invest" my 20k for 6-8 months in the aforementioned Sporty and quick but comfortable and practical enough daily driver - so that when i come to sell it Oct - Dec - I have lost as little as possible, so it can be put towards the purchase of the 997 i want.
Interesting to hear the opinions.
Risk £20k and you have much more to lose, escpecially as more expensive cars are likely to be the ones falling in value most if the economy tanks as badly as expected.
I really think it’s worth buying the best car you can find at the time rather than necessarily the specific one that works best on paper. I sold my A6 a month back at asking price, though the two other identical models that were advertised before mine at the same price are still for sale. Picking a good car and putting together a decent ad can make all the difference.
stevekoz said:
From my buying perspective, I'm looking to buy and sell the same car in the next 6-8 months putting on roughly 3-5k (at the very max!) in that time frame.
...
I want to "invest" my 20k for 6-8 months in the aforementioned Sporty and quick but comfortable and practical enough daily driver - so that when I come to sell it Oct - Dec - I have lost as little as possible,
I think a problem with your plan is that if you buy a car from a dealer and sell it back to a dealer, you'll lose their profit margins. E.g. even if you bought a £20k car and sold it elsewhere the next day, you'd lose what, £3k? £4k? on their spread....
I want to "invest" my 20k for 6-8 months in the aforementioned Sporty and quick but comfortable and practical enough daily driver - so that when I come to sell it Oct - Dec - I have lost as little as possible,
And that's on top of the normal depreciation from being half a year plus older and with more miles.
Then you have the risks - the potential slide in market values from their current historically high level, and the risk of buying a lemon that promptly grenades its drivetrain.
So your money is multiply at risk from dealer margins, depreciation, market shifts, and breakdowns.
Honestly I think it would be more financially prudent to borrow the remaining money you need to get the 997 you really want, and buy that now, than to aim to buy and sell a £20k car over this sort of timeframe. Interest charges will be lower than dealer margins, basically - each transaction carries a cost and risk, so doing fewer transactions is more economical.
Otherwise, just keep using the weekend car - I really don't imagine an extra 4k miles will depress the value as much as the above risks of buying another car for a short period.
If you're determined to buy a second car now, you really want to be buying and selling privately I think. Find a good cared for example for a reasonable price and you'll likely be able to make most of that back privately 9mo later.
Also, I'd be looking to spend £10k rather than £20k; plenty of decent cars that will be fine for a few months, and you cut your exposure to the market/losses in proportion. This also makes it easier to buy and sell privately.
Ah sorry, I hadn’t realised that you were only intending to keep the car for around 6 months.
In that case I wonder if the Audi RS3 might work because of the 4WD? You’d be selling up just before the winter so a RWD V8 might not be on many peoples wish list. Also the cost of living crisis will be getting worse as energy bills rise further so cars with very poor fuel economy might suffer a bit more.
In that case I wonder if the Audi RS3 might work because of the 4WD? You’d be selling up just before the winter so a RWD V8 might not be on many peoples wish list. Also the cost of living crisis will be getting worse as energy bills rise further so cars with very poor fuel economy might suffer a bit more.
I think you’re far more likely to do unexpectedly badly than unexpectedly well, through eg mechanical failure or major service, brakes and tyres or something. Even taking that and the dealer spread out of the equation, to minimise depreciation, in my view, you have to be prepared to move quickly on something well priced. If you can then add value over the six months (return to stock components, paint correction and detail - that sort of thing) you stand a chance.
I like to buy down at heel but fundamentally good cars and get them as good as I can. That and buying and selling privately can make a big difference over even a short time frame.
I like to buy down at heel but fundamentally good cars and get them as good as I can. That and buying and selling privately can make a big difference over even a short time frame.
In my experience, the best balance of all the above is to buy a vehicle that you - and, ideally, other people - really like... and then to keep it for a long time. In that way, you benefit from maintaining it to a high standard including any hiccups or unexpected costs along the way. This approach might cost more upfront, but it generally costs the least in the long run.
Most of the cars mentioned above are popular for a reason and, other than some general ups and downs in the market, will return a relatively high proportion of your upfront investment - even in the short to medium term. But, as I say above, the running and repair costs may be higher initially.
So, I recommend holding for a bit longer than you originally propose.
Most of the cars mentioned above are popular for a reason and, other than some general ups and downs in the market, will return a relatively high proportion of your upfront investment - even in the short to medium term. But, as I say above, the running and repair costs may be higher initially.
So, I recommend holding for a bit longer than you originally propose.
PositronicRay said:
mat205125 said:
Your suggestions might best depreciation, but will cost you in tax, fuel and maintenance
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