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So I bought my SX w/Navi about 7 months about. I just hit 8000km.
I was with a friend at a dealership and she was getting a new car.. because of the ups and downs I have had thus far I thought, Hey why not just see what I can get for it..
I bought the car for $23000 after taxes and bla bla bla.
Another $1500 for winter rims and rubbers and $300 for the custom fit winter floor mats in the front back and trunk..
I was offered $15599 for the car.....Thats not including the extra set of tires and accessories... That roughly $7500 deprecation in 7 months. If it continues this way in another year I will upside down on the car. WTF.
there is nothing abnormal about the depreciation, particular the first year or even the second. This applies to any make of vehicle. You are competing against a new vehicle and price, so why would a dealer give you top dollar when he knows people are going to compare the price to new and even more so with new not increasing much from one year to the next and new discounts etc.
Also you did not state whether that is a trade value or an outright purchase (which is rare) you also did not state what dealership brand, nor if a trade, trading against what? You would get much less trade value against a low price model as opposed to a high price one.
I've heard you lose roughly 1/3 of the purchase price just by driving it off the lot. Which is almost exactly what the case seems to be for your vehicle.
Of course I'm sure you could sell it privately for a lot more than what the stealership is offering. Just checkout out www.AutoTrader.ca to see what they are selling for. Looks like, in my area, they are selling for $16k and up and with your trim level I'd bet you could do better than that.
It is the unfortunate side effect of buying new. This is why a lot of folks will research what car they want, the resale value, and wait for someone looking their relatively new car around the 1yr mark. You still end up with a decent warranty and a great savings on what is essentially a new car.
The number of people who buy new and sell/trade up within the first 2 years always amazes me. I understand if it is a lemon or your needs change. It is more the people who just like to have new all the time. In this case you are always eating that initial drop is value within the first year.
It is also commonly understood that anything you purchase after the initial sale is at your loss and cannot be counted towards overall value of the vehicle. This rule of thumb applies to items such as winter tires, floor mats, and an upgraded audio system. Other items of course will reduce your sale price such as giant spoilers, body kits, and other unnecessary add-ons.
I would say your value is close to accurate for first year depreciation. If doing a trade-in you can always negotiate a better resale value. Private sales will almost always net the most return on value.
Drives: 2013 Rio SX Sedan Signal Red Beige Leather,92 Mercedes 500SL,58 Rolls-Royce,71 Fiat 850 Spider,
Depreciation is usually 30/20 & 10% for the 1st 3 years & 10% per year after that.Accessories,Snow tires & rims etc are worth nothing on trade.Life is cheap it's the accessories that will kill you .I speak from 31 years selling new cars(Now retired).& why did I buy a NEW car if I know this? There was nothing avalable used that offered all the features, fuel economy & style that my Rio SX sedan offers. I consider my car to be a Mini S Class Mercedes. The Mercedes doesn't even have the automatic heated driver's seat than comes on below freezing! Also no risk buying used & getting a lemon.I plan to drive this little gem for 10 years so depreciation isn't that much of an issue to me.
Drives: 2013 Kia Rio 5 SX UVO, 2012 Cadillac Escalade Ultra Luxury
I agree.... i bought this car thinking " long term for a city hauler and drive until it falls apart..." didnt care about trade in, but i did know it would be a crappy trade in since the brand isnt one that people are waiting in line for.... but i do like the little features of the rio! (still hate the traction control in the winter though arghhh!!)
In mainstream English, the infinitive "to deprecate" means, simply, "to strongly disapprove of (something)".
But if you're talking about depreciation, I'm with you 100%. I'd kill myself if I had a 7 year loan.
Only way to win with depreciation is to buy a car that appreciates immediately. I'm thinking Ford GT was the last one?
I know the scion tC was more expensive than new for a while, and I'm pretty sure the FR-s appreciates after a week (retail, not what you'd get when trading).
Don't worry about being upside down in 1 year. It's not going to happen.
Besides, remember the dealership wants to make money reselling the car. They're not going to buy it from you at 22k and resell it at 22. So, even if it was an outright, figure in 5000 in profit for the dealer if they can sell it at their retail value they set it at, and the rest in actual depreciation and going through the check to make sure it's safe because it's used. Of course rarely does someone buy a used car at a dealership for the stated price, so look for the dealership to drop the price and will make 2500-3000 on your car.
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