Debunking the myth of new car depreciation

Discussion in 'Fiesta ST Sales and Service' started by Parker, May 22, 2014.

  1. Parker

    Parker Member

    I'm sure you ALL heard the "don't buy a new car! It loses so much value after you drive it off the lot" crap. I heard it from everyone. But then today I got a very interesting call :)

    I bought a black ST without any options for 21k about a month ago. A guy from a local dealer (I traveled all the way to vegas to get mine, was well worth the trip) called me today saying they have a used orange ST at a tent sale. It has painted wheels and a moonroof. and SIX thousand miles. They are asking $25,401 for it!!! I almost died. A tent sale.... 6k miles... and that's almost how much you'd end up spending on a brand new one. What a freaking joke.

    Made me feel a heck of a lot better about my purchase. I can probably turn this thing around for a profit right now! But I would never do that :) I love my baby too much. Anyways thought you'd all enjoy that. Have a good weekend!

    here is the car listing for those interested -

    If you want the sales guy (who honestly is a douchebag, but he said I get $100 if I sell it) his number is 801-687-5770 and his name is Doug
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  3. Sil3nt611

    Sil3nt611 Active Member

    That's more than MSRP for that car new with the options it has...throw in the Recaro package and it's still a couple hundred too much. Only reason I'd buy a used car with 6K miles over a new car with 6 miles is for money savings. And if considerable money savings are not there I'd rather buy new... It's worth what someone is willing to pay for it, and if someone pays that much for a used ST with those options, they overpaid for a new car and got a used one instead. :p
  4. D1JL

    D1JL Well-Known Member

    How do you think they pay for those TENTS.

  5. BRGT350

    BRGT350 Well-Known Member Staff Member

    sounds like a typical car sale tactic, raise the price way up, talk you down to a better price, you think you got a deal and dealer made a killing. I would not say this suggests new cars don't lose their value. However, I would agree that cars like the ST don't lose value as quickly due to the limited supply and higher demand. Also, rental fleets don't have hundreds of them driving down the used car values.

    I bet the car will sell for around $21k in the end. The buyer will love getting $4k off the price, and the dealer will still do ok since they probably gave the poor guy who traded it in about $18k.

    Perhaps it is the lack of coffee this morning, but the description of the ST on the dealer's website reads like crap.
    Firesail likes this.
  6. kvetcha

    kvetcha Active Member

    The car is depreciated. They're just selling it at a major profit.

    How much do you really think they paid whatever poor sap they bought it from?
    SpaceFish likes this.
  7. Redlinez

    Redlinez Member

    The best way to buy a new car is with the fewest options you can get. The real depreciation is what they add on for the options. It's a joke. Just another reason I'm glad I have a 0 option oxford white FiST. I'm in the business and have had over 50 cars, and I'm 42. I've done it a few times.
  8. WScottCross

    WScottCross Well-Known Member

    Not if you really want the options and are willing to pay. It appears that price is your priority. For me, I enjoy the options and I'm willing to pay for them, within reason of course.
    jfdana and Teezlr like this.
  9. Redlinez

    Redlinez Member

    If you buy cars to keep them, then by all means, get everything you think you would want. I don't keep any car more than two years usually, but I also like mine with just the basics. I'm not into spending $1900 for seats on a car that stickers for $22k. Really, none of the options made sense to me. $375 to paint my wheels and calipers a different color? $895 for adding navigation when I have it on my phone and it's satellite accurate? That's the great thing about having choices.
  10. WScottCross

    WScottCross Well-Known Member

    I do agree with you on some of the options. The seats are worth it to me. I autocross and they are great for that. The wheels I could care less since I replaced them anyway. The sunroof is another option I enjoy alot. Nav is OK but not required, I only took it as part of the package and they made a deal to give me a better price on my trade if I took this one as is. I generally keep my vehicles for about 3 years and put lots of miles on them, but this one might be different. We'll see.
  11. Redlinez

    Redlinez Member

    My choices were: white with 0 options (my favorite color anyway), blue with a roof (close 2nd, but they were $500 less on my truck), or others that had every single option. Those cars were $4000 more than mine. I would want those seats if I knew for sure I were autocrossing, but those seemed like a pain to fall in and climb out of on a daily driven basis for me. I did like how the seat kept my knee off the center console though.
  12. silvertoy

    silvertoy Member

    This is certainly the best way if you only keep them for a short while and you do not lease. After a few years, all of those options are not worth anything in reasale, but if you're not happy without them, then you'll be more likely to sell it, vicious cycle :) The difference between the Fiesta ST I leased with every option except recaros and a stripped out ST was like 7 dollars. The recaros would have been another 15$ a month, but after having them on my Focus ST I decided they were too uncomfortable for me.
  13. Redlinez

    Redlinez Member

    On a lease, it definitely makes less difference in the payment.
  14. djdennehy

    djdennehy Active Member

    Coming from a former car salesman, I hope you didn't think that the price a Dealership put on the window of that used FiST is any indication of the actually value of your or any of our cars... There is a huge difference between a Retail and a Private Party value. Kelley Blue Book does give you an idea, but in reality most dealers will use car auction sites to see how much similar models have recently sold for when making a trade offer, so your Trade Value ends up being thousands less than Private Party (which is thousands less than Retail). So a $26,000 ST3 FiST sells to the original owner, gets traded in 1 year later for probably $16,000, gets marked up by 40-50% to $24,000 and will be sold for $18-20...

    But if any one of us tried to sell one of ours, we should expect to get out about 80-90% of the original purchase price from it, and none of us can get as much as a Dealer because of the perception that getting a used car from a Dealer translates in the car being properly serviced and cleaned (which in many cases, never happens). Dealerships can also offer extended warranties, which often makes them more revenue than the sale of the car itself (why do you think Certified Pre-Owned vehicles have become so popular?)
  15. Redlinez

    Redlinez Member

    Yea, I sold new/used cars from late 95 to summer of 98. Most dealerships I worked for would probably mark one up $3000-4500 over what they had in it, depending on year/make/model. I have actually traded cars 3 months after buying them and broke even, and I bought whatever new car at invoice minus rebates, so it wasn't the over allowance game. One of the keys is to buy when the car is really new and there's no book on it yet. Too many people buy into KBB. They don't buy or sell cars, so they're pretty much useless. The Black Book and Manheim auction reports are where real value numbers are derived. The fact that there aren't many of the FiST being sold might help on a trade in value though.

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