Study Uncovers The Top 10 Cars To Buy If You Want To Lose A Boat Load Of Cash

The write up is stupid: "Every car on this list comes from either a German or American brand. That means the reputation of Japanese vehicles having strong resale value holds up well according to this study."

That is NOT a logical assumption. It just means that given that the list was top ten, 11-20 are not listed.

Good point. Also, most of the cars on this list are quite expensive. MB, BMW Audi do not sell much in the way of inexpensive cars. I am surprised not to see any Cadillac sedans on this list. Not a criticism, I want to see Cadillac be successful. Is this reflective of list price or transaction price.

Tracking transaction prices is more complicated than tracking list. Since most of the vehicles on the list have steep discounts and/or money on the hood to effect the transaction, the depreciation for the customer may not be as steep.

Lease

Moral of the story is to buy the car YOU want to buy - based on what criteria YOU set up - and enjoy the car until it falls apart. YOu will never loose much in depreciation if you keep the car for Decades rather than Months.

Yes - I have had two distinct times in my life - when I struggled to put my kis through Med School - and now where the cost of a Mercedes Maybach is not the consideration. And not everyone has this ability - but if YOU buy the car you want - at least you will not regret the choice for that reason making you one up on the field.

No surprises here.

If you prefer to have a new car, lease. if not, buy a 1 or 2 year old CPO.

I blame leasing the lower the new lease payment the further the depreciation.

Bingo. That and the CPO game.

A 50% depreciation over 3 years is horrible. So if you want a new car every 3 years, plan accordingly.

But as a business owner, I've tracked my vehicles' costs -- ALL aspects; Total Cost of Ownership (TCO) -- and I can tell you: if you want to save money, then own and maintain the car for as long as you reasonably can rather than constantly getting something else.

The *maintenance* costs of a paid-off car during year 11 through year 15 (5 years) will be lower than the TCO of a new vehicle in years 1 through 5 (5 years). This is true, even when you take the manufacturer's new-car warranty into account. It's the cost of buying/financing/depreciating/leasing that new vehicle that hammers you.

Mind you, if you want a new car, and you like a new car, and you choose a new car... well, that's just the price you pay for what you want. As long as you're okay with that, then cool!

These days, if you drive premium vehicles and want something new every few years, you are way far ahead financially to lease because the leases are subsidized so that the leasee doesn't take all the hit of depreciation.

This strategy worked if you pushed lease returns back out as CPO, but prices of CPOs have fallen because leases have become increasingly more subsidized.

With the sedan market so soft, leasing is the way to go as sellers fall all over themselves to incentivize.

Perhaps the list is an indication that these cars are overpriced. I'm somewhat surprised at BMW's showing.

It's pretty obvious really. BMW incentivized leases to keep sales propped up and was dumping lease returns to CPO, but they then incentivized new cars even more which drove the price of CPO down. Thus over time, BMW became a depreciation king when once it wasn't.

Leases are fine as long as you accept that you will always have car payments. A lease is good for the short term, but as The Steve said above, if you pay off the cat and keep it for a while you are money ahead.

Buying a car and driving it for a solid 10 years makes the most common sense, but customers wanting premium cars tend to want the latest favor. Given their financial liquidity, a lease payment is a small price to pay to have the newest, bestest (sic) thing. Given the complexity of technology and the propensity for there to be reliability issues and/or high repair costs, leasing and always having a car under warranty is a massive benefit.

Totally agree with Matt's last post.

I used to be in the buy and keep 10+ years camp, but the repairs out of warranty on a BMW come like clockwork and they are a killer. Do the math while taking those into account and leasing is a far better deal on these cars.

Not to mention the chance to get the latest safety and tech upgrades you'd otherwise do without.

@carloslassiter: Just as an FYI, as a business owner, I've actually done the various options, including buying a BMW, leasing a BMW, leasing a used BMW, etc. Least expensive option: Well-maintained car, fully paid off. Still cheaper over the long haul than leasing new every 3 years.

I wonder if the true new selling price is used or sticker. I imagine these US models could have started out with up to 25% discounts. It may be the study used average new transaction price, but I don't know if they would have access to this data.

@carloslassiter: Just as an FYI, as a business owner, I've actually done the various options, including buying a BMW, leasing a BMW, leasing a used BMW, etc. Least expensive option: Well-maintained car, fully paid off. Still cheaper over the long haul than leasing new every 3 years.
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I'm a business owner too, and I haven't had that same experience. I can imagine your buy scenario is cheaper IF you know when to cut bait. I was of the mindset that you buy new, maintain well and drive them into the ground - but at 100K miles it's $2,000 and $2,500 here, $1,500 there just to keep them running and that covers a lot of lease payments.

So, how long are you keeping yours? And at what point are you deciding to stop putting money into them?

Matt, I would be interested in your opinion on the car subscriptions? It does exactly what you said above, you are always assured the latest technology. Some phone carriers are doing the same with smartphones.

Car subscriptions are essentially leasing with even less commitment and if a person has the money to blow, blow it. Personally, I need to know a car is mine. Granted, at work, I essentially am a car subscriber given that one of my job perks is a company car that I typically keep for 3-6 months. I can pick between different brands as well. I'm not opposed to car subscriptions, but driving "someone else's car" perpetually like "new week new rental" would drive me nuts.

Thanks. I am curious what the acceptance of subscriptions will be and how it affects resale values.

In one respect, I think it will make resale even worse. Wise buyers avoid ex-rental cars like the plague because those cars are not treated well by their drivers. A subscription service is just a rent-a-car enterprise (no pun intended). I would not want an ex-subscription car.