Why Do German And American Cars Have Low Resale Values? - Car Talk - Nairaland
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| Why Do German And American Cars Have Low Resale Values? by elektra80: 11:35pm On Sep 12, 2013 |
I did a little research and found out that German and American cars have very low resale values compared to their Japanese counterparts. I don't blame Americans though because Americans can't make a reliable car.. but Germans  Ok first of all.. this is intended for fun only and does not represent exact values, but there just might be some element of truth in it. I know German cars to be 'machines' but I just wonder why they have a very bad resale value, especially when the mileage is above 100k. My research was based on 2004 model of different cars (cars are 9 years old). I compared prices of the cars when new, then prices of used with mileage between 100-130k Note: The prices quoted are just estimates. 2004 toyota camry xle MSRP (Manufacturer's Price) $23,000 Used............................. $8,500 Percentage Loss (residual value)63% ............................................................. ............................................................... 2004 honda accord ex MSRP ........................ $22,000 Used:............................ $7,500 Residual Value:................ 65.9% .......................................................................... .............................................................................. 2004 nissan altima 2.5 s MSRP:..............................$19,000 Used:................................$6,900 Residual Value:....................63.6% ......................................................................................... ......................................................................................... 2004 nissan maxima 3.5 se MSRP.................................$27,000 Used..................................$9,300 Residual Value.......................65.6% ............................................................................................. ............................................................................................... 2004 bmw 745 Li MSRP ....................................$73,300 Used................................. ....$13,700 Residual Value...........................81.3% ................................................................................................ .................................................................................................. 2004 bmw 525i MSRP.......................................$39,000 Used........................................$9,860 Residual Value............................74.7% ...................................................................................................... ..................................................................................................... 2004 mercedes benz e320 MSRP......................................$50,500 Used.........................................$12,500 Residual Value.............................75.2% ...................................................................................................... ...................................................................................................... 2004 mercedez benz s500 MSRP........................................$82,500 Used..........................................$13,000 Residual Value..............................84.2% ................................................................................................................ ................................................................................................................ 2004 acura TL MSRP.........................................$32,500 Used..........................................$8,960 Residual Value..............................72.4% ..................................................................................................... ..................................................................................................... 2004 toyota highlander Limited MSRP..........................................$31,000 USED..........................................$12,500 Residual Value...............................59.7% ............................................................................................ ............................................................................................. 2004 mercedes benz ml350 MSRP............................................$38,000 USED............................................$9,000 Residual Value.................................76.3% ............................................................................ ............................................................................. 2004 audi a6 3.0 AWD Quattro MSRP.........................................$39,500 USED...........................................$8,300 Residual Value................................79% ............................................................................ ............................................................................ 2004 volkswagen passat glx MSRP...........................................$29,500 USED...........................................$7,000 Residual Value...............................76.3% ............................................................................ ............................................................................ 2004 volkswagen tourag v8 MSRP..........................................$42,500 USED..........................................$13,200 Residual Value..............................68.9% ......................................................................... ........................................................................ 2004 toyota lancruiser MSRP...........................................$54,500 USED...........................................$20,500 Residual Value................................62.4% ......................................................................... ......................................................................... 2004 honda pilot ex MSRP............................................$29,500 USED............................................$9,500 Residual Value.................................67.8% ...................................................................... ..................................................................... 2004 lexus rx330 AWD MSRP...........................................$36,000 USED...........................................$12,160 Residual Value................................66.2% ............................................................................. ............................................................................. bmw x5 3.0i AWD MSRP............................................$40,800 USED............................................$11,700 Residual Value.................................71.3 The cars are clean title, not salvaged. I think it would be even more unfair to the Germans if it were to be salvaged. Its funny how these cars lose their value drastically within 9 years. So can someone tell me why those German cars lose their resale value so much , I thought they are supposed to be stronger, more beautiful, handles better and more rugged than the Japs. Also If I compare older cars, say 1996 model, then the German cars would have an even worse resale value. This leaves me with one conclusion.. the older those German cars get, the more problematic they become, hence reason they lose their values drastically. Just my opinion.. other opinions are welcome. 2 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by peterjero(m): 12:24am On Sep 13, 2013 |
you are correct German cars are serious problems when they age , i have a 24yr old camry with a/c still steaming yet i haven't topped the gas once , no smoke from the exhaust. A lot of nigerians mistake speed and handling for reliability and durability. i put d key and start once all buttons still work. though i like german cars for their power and aesthetics but japs will always win thats y their cars are found everywhere in the world. |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 12:45am On Sep 13, 2013 |
One word that is above all.. RELIABILITY. |
| Re: Why Do German And American Cars Have Low Resale Values? by KA24DETT(m): 6:10am On Sep 13, 2013 |
elektra80: One word that is above all.. RELIABILITY. We still have the notion that german cars are not reliable but they are catching up. Japanese cars are more reliable overall but every body is catching up. Korea (hyundai, Kia Group ) is the HIGHEST in reliability now. Even the americans have caught up with the reliability game. Everybody has stepped up their game big time and before you know it, the "Which car is more reliable" argument will be mute. All in all, German cars come with more electronics and sophiscation which means, the probability of something going wrong is high. You can buy a used german car for cheap but still remenber u are maintaining a high end car. 5 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by Nobody: 6:33am On Sep 13, 2013 |
peterjero: you are correct German cars are serious problems when they age , i have a 24yr old camry with a/c still steaming yet i haven't topped the gas once , no smoke from the exhaust.. Sir, I disagree with u on the age related problem associated with Euro and American cars especially German cars. There are many Volkswagen Golf MK1, volkswagen transporters, Volkswagen Passat, ford motors, Mercedes 190 series, Mercedes Benz W123, Mercedes Benz W124, Peugeot J5, Peugeot 404, Peugeot 405, peugeot 505, Volvo 470, Volvo 200, Landrover series, Mercedes Benz Gelandewagen (G Class). ETC which are at least 20 years and some even 30 years and they are still doing very great. While some new models of Japanese cars such as Camrys, Accords, Corollas, Civics etc I've come across are either total failures in some mechanic garages or In some junk yard. I know some other vehicles may not be reliable due to design process or other underlying factors (which also affects JAP mobiles as well as Euro and American car makers) hence necessitating class action law suits and/or recalls or extension of insurance; But to a great extent the issue of longevity of a car lies in the maintenance attitude of the owner/user. 11 Likes 1 Share |
| Re: Why Do German And American Cars Have Low Resale Values? by Cyberknight: 9:55am On Sep 13, 2013 |
I beg to differ. Firstly, the prices of the cars you mentioned as representing the German auto industry are not comparable to those you gave for those you used to represent the Japanese manufacturers. I see a price of $73k and $82k somewhere on your list, as compared to an average of $20k for the Japanese brands you mentioned. Er.. just how many people can afford to pay those prices for new cars? So maybe, just maybe it could be that lack of demand for them informs their proportionally lower secondhand values as compared to the originally much cheaper Japanese cars (I do not use the word counterparts here). Secondly, perhaps the fact that your cited research was carried out in America is instructive. The US values are low because these cars don't sell well in the U.S. anyway even when new. Had you provided comparable statistics for Europe then your postulation may have some weight behind it. As it is now, its all basically extrapolation, extrapolation and more extrapolation. 8 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 10:02am On Sep 13, 2013 |
lomomike: I agree with u the longevity of a car depends on the owner. But then when I spend a lot of money to buy say a gold Rolex watch, at least I expect to sell for close to half its original price (or something reasonable ) after 10 years since its top of the line. The case is different with Mercedes and BMW. You buy them at very expensive price when they are new, but after 10 years or after like 150k miles the price becomes on par with Toyotas and hondas of the same class. I made my comparison based on the most common cars... I know some American and Europe cars still have high resale value. For example ford focus is the highest selling car in the world and it holds high resale value. You might want to check this. http://www.cars.com/go/advice/Story.jsp?section=buy&subject=best_resale&story=loResidual |
| Re: Why Do German And American Cars Have Low Resale Values? by icemann(m): 11:07am On Sep 13, 2013 |
From my research (My personal opinion shouldn't be taken seriously), Replacement parts for most German cars cos more because they are made in Germany with high labor cost. Second had owners would rather pay less for replacement parts on a 130k mile car German car makers are 3 years ahead in car technology, Making most mechanics scared to work on them and the few that can would ask for a lot. Just my 2 cents 11 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by Nobody: 11:24am On Sep 13, 2013 |
elektra80:Agreed you understood me here, but what i was saying in my previous comment was in defence of longevity of EUROPEAN and AMERICAN vehicles which peterjero was criticizing. I wasnt even talkin about resale value but longevity. In Nigeria you don't always get actual resale value, you might get a higher resale value or lower resale value depending on your bargaining power (if you are buying) or your convincing/confusing power (if you are selling off). For instance, MR A. Bought a CAMRY 1998 for NGN 1.6m, then sold off this MY1998 CAMRY for NGN 850,000 after 8 yrs usage, and bought a 2006 CAMRY for NGN1.6m After 1.5 years usage, sold same 2006 CAMRY for NGN 980,000. Yet another person would buy and sell off similar cars at different price range. Its all about the following: 1. Peoples perceived preference (in Nigeria camry 1998 and 2001) is purchased and sold off more than most other camrys. 2. Bargaining power. Mr Ali bought a C class 2005 model 2m but Mr Joe buys exact car with exact model and trim level and exact wear and tear for 2.3m Mr. Ali has a better bargaining power here. 3. Convincing/Confusing/misguiding power: Mr Ali bought a C class 2005 model 2m but Mr Joe buys exact car with exact model and trim level and exact wear and tear for 2.3m. The dealer who sold the car to MR Ali wasn't able to convince him well to purchase such car at a higher price here. 4. Peoples perception: most people believe that a toyota is more durable, more economical in both short and long term projection, replacement parts are always available and cheap, mechanics don't have to go back to school to learn how to fix them. But when you observe critically, you'd realise that such isn't always true. 5. Peoples disposable income: Nigerians would buy a JAP mobile because its cheaper at the dealership, but most Arabs might not even go close to such vehicles because they luv spending their "Arab money". 3 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 11:45am On Sep 13, 2013 |
icemann: From my research (My personal opinion shouldn't be taken seriously), Replacement parts for most German cars cos more because they are made in Germany with high labor cost. Second had owners would rather pay less for replacement parts on a 130k mile car German cars are ahead in technology, I agree... But for for a 14 year old car? I don't think the issue of being ahead should be considered for a 14 year old car. Lets take a example. A 1999 Toyota Camry xle vs 1999 Mercedes Benz e320. Both are 14 years old and in the same class. The Camry at production is priced at $25,000 while the Benz is priced at $49,000. That is twice the price of the Camry. Now fast forward 14 years and say like 200k mileage. The Camry still sells for approximately $4,500 while the Benz sells for about the same price. Even some 1999 Benz e320 of 200k + miles sell at a cheaper price than the Camry which sells for half the price of the Benz at production. 1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by icemann(m): 12:31pm On Sep 13, 2013 |
elektra80: Dude Never compare a Camry to an E class  . They are not in the same category in price or class. The Camry is a "regular car" and an E class is a Luxury car. You can compare a Lexus with a Benz (A lot realistic)In my earlier post i was given my on personal opinion and i think the cost of parts is the major deterrent to buying German cars with over 100k miles.And if you doubt it check the cost of struts, bearings and general suspension stuffs (things that are likely to fall apart over 100k miles) and you would understand my point. |
| Re: Why Do German And American Cars Have Low Resale Values? by onyxo76(m): 2:33pm On Sep 13, 2013 |
i feel the german cars have a lot of technology embedded in them making it difficult for most of mechanics to diagnose their faults. Besides this most of them have very expensive and scarce spare parts. I don't know for what obtains outside our shore but i know most Nigerian will tell you to keep away from German cars especially Volkswagen products. 1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by superboi(m): 2:40pm On Sep 13, 2013 |
Simple Logic Why all Luxury Item Depreciate Faster than normal Item is their Initial cost: For example you can't expect to find it easy to sell a N15 Million vehicle for more than 1/2 it value after 2 year because that would be about the cost of a decent Mid priced range SUV and most people with that kind of Cash would prefer something New. 3 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by fckyourman: 2:40pm On Sep 13, 2013 |
When did Toyota and Honda Become American? My friend park well jor there are Japanese owned companies, simple do a google research. |
| Re: Why Do German And American Cars Have Low Resale Values? by Nobody: 2:45pm On Sep 13, 2013 |
onyxo76: i feel the german cars have a lot of technology embedded in them making it difficult for most of mechanics to diagnose their faults. Besides this most of them have very expensive and scarce spare parts. I don't know for what obtains outside our shore but i know most Nigerian will tell you to keep away from German cars especially Volkswagen products.this is true...abeg german machinery isn't meant for individuals who don't like spending all their money on maintaining cars |
| Re: Why Do German And American Cars Have Low Resale Values? by Davo93(m): 2:52pm On Sep 13, 2013 |
I will set up an 8-man committee, check the prices and do something about it..... Okada! Okada!! Okada!!! Oya carry me go White house for my next meeting 1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by nemadfsyahooc: 2:59pm On Sep 13, 2013 |
my own take on this is dat japs cars are readily cheaper to maintain than the german or amec spec. take for instance, maintance cost of a vboot and a Toyota camry is far not same and also the level of fuel consumption differs. average naija man will want to get a car he will spend less of fuelling and maintaining. |
| Re: Why Do German And American Cars Have Low Resale Values? by blackeli: 3:02pm On Sep 13, 2013 |
It's all a factor of the cost of labour in the country / region of origin. Europe and America have a high cost of labour, which all translates to high cost of manufacturing, and invariably costly cars and costly repair/ replacement parts. However if you compare with some new American and German cars like the low end chevolets, and Volkswagens, they have started manufacturing in Asia, and are beginning to have favourable price points, and parts cost. |
| Re: Why Do German And American Cars Have Low Resale Values? by Beaf1: 3:02pm On Sep 13, 2013 |
elektra80: @bolded The reason may be this: Cost of maintaining that old car will be same with new one. The old car requires the same budget as the new car in terms of replacing parts and service, meanwhile the two cars are diffferent in terms of class and luxury. In other words, cost of maintaining an old (expensive) car is the same as maintaining a new (expensive) car. The buyers are indirectly sayiing to the sellers that the rest of the money will be spent on maintenance  1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by DrDapcee(m): 3:16pm On Sep 13, 2013 |
1,Most of the American/german cars have luxury tax on them which accounts for initial higher cost. 2,They have very high cost service schedules which makes them unattractive after the normal 3yr/100k warranty expires. 3,they have very high emmision rates and higher fuel consumption indexes which draws a higher tax on them |
| Re: Why Do German And American Cars Have Low Resale Values? by Connoisseur(m): 3:24pm On Sep 13, 2013 |
To me the only reason for the trend is 'demand and supply' 1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by Temihatz(m): 3:36pm On Sep 13, 2013 |
Not until I graduate from my leggedize Benz, this is just a story...  |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 3:36pm On Sep 13, 2013 |
fckyourman: When did Toyota and Honda Become American? My friend park well jor there are Japanese owned companies, simple do a google research. If u read very well then u would have seen there's no place anyone mentioned Toyota and Honda being American cars |
| Re: Why Do German And American Cars Have Low Resale Values? by Theben(m): 3:44pm On Sep 13, 2013 |
I like innoson motor 2 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by Nobody: 4:15pm On Sep 13, 2013 |
fckyourman: When did Toyota and Honda Become American? My friend park well jor there are Japanese owned companies, simple do a google research.Oponu |
| Re: Why Do German And American Cars Have Low Resale Values? by omodapson(m): 4:22pm On Sep 13, 2013 |
What will be the resale value of a Lexus sedan luxury car after 10 years of use? I have tried to bring a lexus car in close contact with an European car with almost same spec. Base: Lexus LS - 2003 model 4.3L V8 engine Automatic transmission Up to 17 cty/23 hwy mpg Side/Curtain Airbags Stability Control Traction Control Navigation System (Optional) . averaage price: used $14,000; MSRP: $55,125 Base:Mercedes Benz - 2003 model. S430 4MATIC 4.3L V8 engine Automatic transmission Up to 15 cty/20 hwy mpg All-wheel drive Navigation System Side/Curtain Airbags Stability Control Traction Control Average price used $15000; MSRP $72,600 1 Like |
| Re: Why Do German And American Cars Have Low Resale Values? by lalaboi(m): 4:35pm On Sep 13, 2013 |
daz_york: yOU!!  |
| Re: Why Do German And American Cars Have Low Resale Values? by ihimami: 5:16pm On Sep 13, 2013 |
lomomike: I could not have put it better, the fact is that most Nigerian mechanics are responsible for the sentiments attached to Japanese cars in Nigeria. This is because of the fact that German technology is way too advance for them to handle, as compare to Japanese cars. Even among the Japanese brands in Nigeria, you will equally noticed that most Nigerians shy away from buying the high end luxury brands such as Acura, Infiniti and Lexus. One is bound to ask those who believe the Japanese cars are more reliable, to take time to observe the oldest cars on our roads, you will be shocked to discovered that they are mostly German cars such as Mercedes 200 flat boot, Golf 1, VW beetle, Audi 80, and 1980 VW Passat which are still being used for commercial taxis. Most of these German cars have put in 30 years plus. In terms of cost of maintenance, the number of times you see a Toyota or Honda owners going to see a mechanics is more frequents than those with German cars except in some rare cases where mechanics may have done a wrong diagnosis on those German cars thereby making the owner to frequents workshops and end up spending so much to fix. 7 Likes |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 5:49pm On Sep 13, 2013 |
ihimami: u made some good points, but then some are off. Its true most Nigerian mechanics find it difficult to fix German sophisticated cars... But what about in the USA? The research was not based in Nigeria but in the USA, and the prices of those cars are in USD. So are u saying those mechanics too don't know what they are doing? I don't argue that jap cars might visit the mechanic more frequently than European cars... But once those European cars start giving problem, u are gonna spend a whole lot to fix just one problem |
| Re: Why Do German And American Cars Have Low Resale Values? by elektra80: 5:52pm On Sep 13, 2013 |
[quote author=elektra80] u made some good points, but then some are off. Its true most Nigerian mechanics find it difficult to fix German sophisticated cars... But what about in the USA? The research was not based in Nigeria but in the USA, and the prices of those cars are in USD. So are u saying those mechanics too don't know what they are doing? I don't argue that jap cars might visit the mechanic more frequently than European cars... But once those European cars start giving problem, u are gonna spend a whole lot to fix just one problem. About the oldest cars u mentioned like Benz 190 etc. Those are the years when japs have not really matured. Japanese cars became popular worldwide in the 90's and have never looked back since then |
| Re: Why Do German And American Cars Have Low Resale Values? by hardywaltz(m): 6:11pm On Sep 13, 2013 |
fckyourman: When did Toyota and Honda Become American? My friend park well jor there are Japanese owned companies, simple do a google research. See wetin ASUU don cause. |
| Re: Why Do German And American Cars Have Low Resale Values? by rhames(m): 6:30pm On Sep 13, 2013 |
I do disagree with the notion that German and American cars are unreliable when they age. However what i know from both cars are they are even more stronger and reliable than the Japanese or Korean cars at any age. Their only problems were their initial designs which were large and big time fuel guzzlers because of their size. The Japanese car makers started to address the issue of size and strength when the world experienced the oil price hike by the OPEC in the 1970's at the height of the cold war. That opened the floodgate of opportunity to Japanese car makers to set up plants worldwide and they have come to stay since the 1970's. It was also a recession that saw the rise of the new economic super powers,Japan,China,Korea,Malaysia and Singapore. The only thing that keeps any vehicle going at any age is maintenance and availability of spare parts. Besides, the absence of mechanics for these vehicles is also one problem. 1 Like |
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