Cars don't appreciate unless they fall under the classics category, and the time frame involved is decades. Who's going to hang on to a car for 60 years in case its the next 57 Chevy?
No longer the case. After cash for clunkers, the used market is much more expensive than it used to be. If you're looking at reliable brands like Toyota/Honda a two-three year old (ex-lease?) model isn't even 20% off, and that has 15-20K miles on it.
There's a reason why so many people are buying new, the used market is strange/irrational for some brands. And new vehicle incentives/lower APR loans/safety features etc make it a hard call.
People should go check out a no-negotiation dealership (e.g. Carmax). You'll be surprised at current used prices compared to new.
I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month! Some are slightly better and some are worse, but the vast majority depreciate in that range.
I am shopping for cars right now, I'm talking about my current experience with the cost of recently used vehicles (specifically Toyota, Honda, and other reliable brands).
> I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month!
Where can I buy these two year old vehicles that are 48% off? Or a three year old vehicle for 72% off? I'm seriously asking, link me to a 2017 Toyota Highlander Limited for $22K or a 2016 Limited for only $11K...
Locally a 2017 Toyota Highlander Limited is $32K with 65K miles on it. Or $36K with under 20K miles, that's a two year old likely ex-lease vehicle that has a 15% discount, but a higher APR, worse features, higher maintenance costs, diminished warranty, and a lower resale value.
The current used market is highly irrational right now. Your imagined used market where cars are 48% off after only two years sounds fantastic, but that isn't the reality on the ground.
You misunderstand what 2% depreciation means per month.
2 years at 2% would be:
1 - (0.98^24) ends up at 38.4% off, not your 48%.
3 years at 2% would be:
1 - (0.98^36) == 51.6%, not your 72%.
The reason obviously being that 2% off monthly means that the 12th month's 2% is a lower dollar amount that the first month's 2%. This is also intuitively true since a vehicle depreciates more steeply at the beginning and less over time in total dollar terms.
Also I said 1.5 to 2%. At the 1.5% end of the range, a vehicle at 3 years is:
1 - (0.985^36) == 41.9%.
> 3 years at 2% would be: 1 - (0.98^36) == 51.6%, not your 72%.
Can you link me to a 2017 Toyota Highlander Limited for $26K or a 2016 Limited for $21K? Because I cannot find either one.
New figures, old figures, it still doesn't remotely match reality. Used vehicles don't exist at the price points you claim they exist at.
Even at 65K miles, we're talking over $31K. You're off by a huge margin.
> Your information is out of date.
Pretty sure you have that backwards. If you look at the used market it isn't remotely like what you've claimed twice now.
I've tried two times to buy a used car at Carmax, only to find the same model with the same features for less brand new.
I don't understand this market. Who would ever buy used for more than new?
Usually decades. For example, some early 2000s Ford GTs have appreciated to a multiple of their original selling price
Go price out used cars that are a year or two old and then price out an invoice less holdback purchase on a new car.
They sell at a ~10% discount to new cars. They're a day old and haven't rolled off the lot yet.
The sale transaction to the eventual customer is still recorded on the later date, so tax, etc., shouldn't be affected?
Would be interested in the explanation.
Yes, if you try to trade it in right after you buy it you are going to get bent over, but you could put it on the used market for a couple grand below what you paid and as long as you didn't overpay to begin with it will sell quickly.
Nice little passive aggressive completely unargumented quip here...
As a consumer and a free (but fair) market proponent, I want "amateur" pricing structures.
I don't have a lot of experience buying cars, but I recently needed some FX conversions. Compare TransferWise and OFX.
TransferWise offers transparent pricing, they do the conversion at mid market rate and add a bit of fees on top (the bigger the transaction, the lower fees are in percentage terms).
OFX advertises "no fees" but they offer wider bid/ask spread than the market does, meaning that they do charge fees, but they're hidden in the price you're being offered. In addition, they're happy to improve the price if you call them out on this!
TransferWise are amateurs telling me "we offer a service". OFX are "professionals" who are communicating "we're trying to exploit amateurs with an opaque pricing structure that tries to disguise how much our customers are overpaying".
I know which one I'll be using!
Edit: a simple way to see how much you're actually paying, is to try a two-way transfer - e.g. first ask the service to give you the price for 1000 GB (say 1,160.29 EUR), then transfer that amount back to GBP (I get 992.78 GBP). Assuming symmetry, the fee for a one-way transfer then is (1000 - 992.78)/2=3.61 GBP or 0.361%.
There is always a before/after an event. This argument doesn't hold anywhere outside of a schoolyard.
Let's say they extended the price change to a 2 weeks period, the people who bought it at 15 days will complain just the same.
> So what? You buy something if you feel it's worth the price. They bought it for the price, regardless what the price is after.
When I was a kid, my parents bought a TV at Best Buy. That model went on sale the next week, so my parents went back to the store that weekend and were refunded the difference.
Obviously there are some limits to policies like that, but IMHO, they're the right way to treat your customers.
If you bought a tesla for resale value, you are doing it wrong. Buying a tesla helps the environment, furthers innovation, and provides a status symbol.
It isn't as if the $35k model 3 is a surprise.
If you're willing to wait, tech things tend to get cheaper over time, should I be annoyed that had I waited instead of getting a 486 with 8mb ram, I could have got something orders of magnitude faster, for an order of magnitude less?
These people for what ever reason didn't want to wait, they paid more, in return they got some extra months/years of use of a more exclusive machine.
That's the early adopter deal.
Plus as you say, if you bought a tesla for resale value, you are doing it wrong.
When people complain about $100 drop in price on a iPhone or whatever I don't have any sympathy, but 50% on a ~$200,000 car is... significant.
We're not talking about medicine, food or other basic human needs here, we're talking about a car that costs 100 times the yearly minimum wage of some countries. Luxury isn't a right.
I'd like to see the same people reacting to a price increase, they'd probably be just as virulent on twitter, but boasting instead of complaining.
It's a luxury car.
It's not an investment. It's not a necessity. The money that was "lost" was already spent on hedonistic value. (In any case, Teslas can be returned within a number of days of purchase. The individual who bought five days before the price drop is almost certainly within that window.)
Then wait an extra month to take delivery.
Two good comments there:
1) "huh... i guess outrage over a price drop falls under the category of "there's no such thing as bad press""
2) "The news accounts on weibo posted the news in a negative tone. But the comments are mainly against who demand refund over price drop. So I would say it's now viral without much backlash"
hindsight is 20/20, they should have walked it down to the lowest price points over the course of the year while broadcasting the fact that they expect to cut prices continuously.
This ain't to excuse some US customers but I am afraid far too many people here are merely looking for an excuse to be a victim so that they in turn feel important. Reddit is all over the place with pro and con comments. The sense of entitlement. that some people have is astounding.
ps: if you want to see entitlement approach ridiculous levels just check out the crying in the apple sub that 5gb free cloud is pathetic, shameful, and outrageous.
Eg "find it elsewhere cheaper ...", or "if we put it on sale within 6 weeks we'll refund the difference"
Call me boring but I’ll be sticking with my Toyota for a bit longer.
Btw, this isn't just Tesla, it's Elon Musk. SpaceX also lowered their prices, and forced all other competitors (old companies) to lower theirs as well!
What? What doesn’t it have to do with price? Why would anyone pay for a vehicle that had poor ratings for all of those things?
Maybe you'll buy partly on the promise of features that haven't yet been delivered, and they either won't be delivered or won't be as good as you expected when they are. It might have fit-and-finish problems like cars used to in the 1980s, like a leaking sunroof. Perhaps quality standards will vary as production ramps up, so reports by journalists and early adopters will prove inaccurate. You might need customer service, and find it barely exists, Google-style. You might find Tesla's own mechanics can't get the parts to do repairs, because of supply chain problems. Maybe you read positive reports, but they were written by Tesla fans biased by their enthusiasm for the brand, or journalists biased by their access to free press cars. Perhaps you'll need a replacement part after owning the car several years, and you'll find replacement parts are no longer available. Maybe there will be some subtle software bug that will inconvenience you, but with trigger conditions rare enough Tesla will never prioritise finding and fixing the cause. Perhaps there will be some expensive part that wears out after X, when competing cars usually last for 2X.
As you'll appreciate, quantifying the chance of such problems is difficult.