I Bet You Didn't See This Coming, These Depreciation Dodgers Are Not What You'd Expect

Depreciation is a crappy word. Especially when you finance and are stuck in the car cause you can't get anything for it.

Many people go upside down, meaning they owe more than what the car is worth. All to often dealers are horrid and low-ball like crazy, to points that are almost unheard of.

When I tried to trade in my 02 Civic EX Coupe 5spd. to Honda, they appraised it at $5,000 with only 50,000 on it. This was a few years back and the car was worth more than that by a lot. I ended up selling it for $7,500.

Places like Kelly Blue Book need to really update their numbers as many times people will actually bring in the sheet from the website and the dealer says "we don't go by that number" and pull out their ADA (Automotive Dealer Association) yellow book and get a number that is insanely low.

This squeeze is forced on car owners as many people don't have the thousands available to payoff the car prior to selling it, since private buyers want the title at the time of sale. You have to pay the car off, get the title, and hope the person still wants to buy it. And people are very content for some reason tacking money onto a new car from an old.

Depreciation sucks, it's something we deal with.

If you really think about it. Without the high depreciation rates, not many people would buy new or off-lease/pre-owned cars. Consumers would look to much older vehicles that were more than 4-5 years old before buying new. The current depreciation rates ensure that consumers will cyclically buy new cars once their current vehicle gets to be 4-6 years old, if that.

If your brand new Lexus (or Pinto) retained 90-95% of its original value after 3-4 years, it would upset the new/used car balance within the auto industry. Initially, consumers would hold on to their vehicles longer...until their value started to increasingly drop(say after year 10). That means more money has to go into maintaining it for that long. Imagine trying to sell a 10 year old Lexus today for about what the owner originally paid? Many of kids on this site can't even remember what a 1999 Lexus was like....a hint...not as good as todays Lexus. That car would sit on the used car lot for years

Whelan, everybody is free, just like you, to walk away from an offer by a dealer. They can't make you sell your car to them! It is a market of buyers and sellers freely selling and buying cars. The dealer is right about Kelley; Kelley Doesn't Buy or Sell Anything. They make up numbers and sell them but they don't stand behind their figures with a check to purchase for the values they claim. They have no motivation to be accurate because they have no skin in the game.

I appreciate the props Agent00R!

That's why I lease. I get a new car every 3-4 years, so it makes sense for me.

buy things that you only buy it once.
that's why rich people are rich while poor guys keep spending money on the same thing over and over.

the depreciation mean nothing to you if you hold down to your vehicle. if i like the car i buy, i will keep it longer and in term, i save money.

I agree too ghosthunter, now if only I could get my wife to understand that. Spend a little more now to save a lot later.

Goods are only worth what someone is willing to pay for them. Used car prices are not the result of some conspiracy by KBB and Auto manufacturers. If KBB's numbers are grossly inaccurate they will lose credibility, become irrelevant and cease to exist as a company. It's what makes the free market the most efficient economic system yet conceived. Like water, the free market constantly seeks equilibrium.

Leasing is good if you decide you always want to have the newest vehicle. If you keep purchasing brand new and trading in within a few years you could save a bundle by accepting that you will always have car payments to make.

Don't take my comments the wrong way I was talkin about people's thoughts in general. In regards to KBB, I think they need to be fixed or removed. Their numbers are never on par, ADA books are way lower by thousands, and Edmunds is typically higher. I guess the best is to use it as a bargaining tool.

For me buying a car is simple, I go to test drive the cars I'm interested in and do not speak about purchasing nor any deals. When I'm ready I call the dealer or deal through email. I refuse to be put into a room or sat at a desk and badgered. This gives me the upper hand in basically being able to hang up.

Case in point, when I got my Matrix I test drove the one I wanted in CT, and took me a month to find the CPO one I wanted (options and colors), in Massachusetts 2.5 hours away. A few emails and phone calls and I had a deposit to hold the car. But with no progress from the rep resulted in the manager calling me. I made it simple to him, these were my terms and if they cannot be met reasonably I would simply remove my hold (of which I always put the minimum down). He responded with the actual numbers and we worked out a deal where everyone was happy. I got $2,500 off the asking price and all documents had been faxed back and forth. I also had them throw in a statement of release if the car did not meet standards once shown. I went there one Saturday, drove the car, looked it over, signed the papers and left with my car.

Way off topic I know, but at least my depreciation is not bad on this car, I am actually at a balanced out situation where I could walk away from this car into a new one with no penalty. But it still runs good so I'll wait for the 2011 and 2012 cars as it seems a lot are currently in mid-model.