Car Depreciation

[NickyG]

Just wondering what the deal is with depreciation. When does a car depreciate? at the time of plating or at the start of the year. Im looking at getting a new car and wanted to know when the best time to buy a car is. Figured if i wait til next year the car will be cheaper?

[Drawnnite]

a car depreciates as soon as you drive it out the dealership (well not exactly, but if you sold it the next day you probably owuldnt get your money back)
if you wait until next year on most occasions (or atleast how i see it) a newer model will be out. or atleast an updated model.

thats about all i can help you with.
not sure when the best time is to buy a car
other than when you have sufficient funds. and if you are taking a loan out for it, you know you can meet the repayments.

[ari666]

30% drop in value once you drive it off the lot.

[dmacey]

The initial drop is because, dealer delivery and statuary charges are added to the RRP of the car which you will never regain. Following that the market dictates the value of your car through many factors.

Colour
Transmission
Condition
Options
KMs
Service history
Location
etc etc

Cars almost always drop in value, it's the name of the game.

[Dr HaxZaw]

Well you can make your money back... you just have to wait 50 years, hope your car becomes very rare and is considered a classic

seeing as this is a commodore forum i really doubt any new commodore is going to fullfil that unless you get a HSV with a few custom things on it

[Jarrad]

The best time to buy a car is at the end of the month or end of Financial Year.

Jarrad.

[NickyG]

yeah i understand that a car depreciates once it leaves the dealership. However cars also depreciate each year. Was just wondering at what point they depreciate. Im looking at getting a VE omega but the 22k for a 09 is just a little out of range at the moment so was wondering when they will drop in price.

[Jesterarts]

yeah i understand that a car depreciates once it leaves the dealership. However cars also depreciate each year. Was just wondering at what point they depreciate. Im looking at getting a VE omega but the 22k for a 09 is just a little out of range at the moment so was wondering when they will drop in price.

There isn't really a "point" when a car depreciates once it leave the dealership. It's just an ongoing thing. Usually you do see prices drop a bit when a new series, etc is released.

So VE Series I drops a bit when the Series II comes out. But aside from that... it's supply and demand and what people are willing to take for their car.

[Drawnnite]

also some cars hold their value much much better then others.

prime example is v6 manual utes.
most people still ask 6-10k for them
where as the sedans are much much lower (sorta 2-3k)

[Not_An_Abba_Fan]

The best time to buy a car is when you want one.

Don't look at a car as having "value" or an "investment". If it does what you want it to do and you are happy with it, buy it. What it costs or what its worth is irrelevant.

All cars drop in price, its all relative. People use the terms "depreciation" and "value" and "investment" with cars, unless you are a dealership that buys and sells cars, they are not an investment, nor are they an asset. They are a commodity.

[Something_Wrong]

I seem to have bought my last 3 new cars in December and they are usually Feb - March built the following year, That way when i sell it it is still only 3yrs old when you tell them the yr model.

Example

2/2008 Hilux sold in Feb 2011, So the car is 3yrs old (2008 - 2009- 2010 - 2011)

12/2007 Hilux sold in Feb 2011 the car is only 2months older but sound like 4yrs as people count (2007 - 2008 - 2009- 2010 - 2011)

Its probably just my way of thinking but most people when i explain why i don't buy a car with a build plate Nov / Dec understand and then agree they too think that way.

There is advantages to buying a End of Financial run out model as well,

[HSV5L]

Stuff all re sale value.

[Verynice]

also some cars hold their value much much better then others.

prime example is v6 manual utes.
most people still ask 6-10k for them
where as the sedans are much much lower (sorta 2-3k)

utes are still higher because they are a commercial utility vehicle, people will use them for their job and can claim some money back on tax

[dumpedvs]

utes are still higher because they are a commercial utility vehicle, people will use them for their job and can claim some money back on tax

And their would have been more sedans made then utes, the more type of car the easier it is to get. Which usually means cheaper prices.
Going by my knowledge anyway.

[the_trademarc]

From a financial point of view- depreciation is the amount of 'value' consumed during the useful life of an asset.

So it really is very difficult to consider a car purchase based on depreciation, because as mentioned, the factors involved in purchasing a car can alter the value:

--> Km's, Colour, Transmission, Service History, Age, the like, will all affect the value.

The best thing to do is use some of the Car valuation tools available (Red Book is a good start), they will give you a rough guide as to what you should pay.

For what its worth, 22k for an 09 Omega is a bit much in my opinion. You could get an 08 SV6 for that money.

[Bazza]

Yes you will have barganing power with the calendar year about to click over. The car will be another year older so the seller should be motivated to deal. The longer the seller keeps the car the less in value it is worth. Classic cars maybe not so much , but in the case of a 2009 Omega I would say you have a leg to stand on. Good Luck.

[STEEV888]

i dont remember if i saw it here or in the paper or somewhere but commodores (behind falcons) are the highest depreciating car to buy losing $130 a week off its value over the first 5 years of its life. falcoms were $140 aweek.
they only did a 5 year thing.

[the_trademarc]

i dont remember if i saw it here or in the paper or somewhere but commodores (behind falcons) are the highest depreciating car to buy losing $130 a week off its value over the first 5 years of its life. falcoms were $140 aweek.
they only did a 5 year thing.

That sounds about right- the plethora of Commodores and Falcons on the market (Fleet, etc) means prices will inevitably be lower to get a sale.
I remember on Top Gear they were discussing that an Aston Martin DB9 loses half its value in the first two years!

[aaronevolution]

That sounds about right- the plethora of Commodores and Falcons on the market (Fleet, etc) means prices will inevitably be lower to get a sale.
I remember on Top Gear they were discussing that an Aston Martin DB9 loses half its value in the first two years!

This months wheels magazine has an article about the Ferrari 599 losing heaps of its value aswell.

[Not_An_Abba_Fan]

When people get their head around the fact that a car can't depreciate unless you are using it to generate income, the better off the industry will be.

Cars will always sell for less than they are bought for (collectables excluded), it's the same with all commodities. People need to stop thinking a car is an asset.

[the_trademarc]

Cars will always sell for less than they are bought for (collectables excluded), it's the same with all commodities. People need to stop thinking a car is an asset.

Car is not an asset?? Got onto the Egg-Nog have ya??

[Not_An_Abba_Fan]

Do you know what an asset is? An asset earns income. If it doesn't earn you income it is a liability because it costs you money. If you are going for a loan and you own your car, then it is called an asset for the purposes of the loan and equity calculations, but unless it is used to generate income, it is not an asset.

[NickyG]

Here is a quote of what an asset is

Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings. From an accounting perspective, assets are divided into the following categories: current assets (cash and other liquid items), long-term assets (real estate, plant, equipment), prepaid and deferred assets (expenditures for future costs such as insurance, rent, interest), and intangible assets (trademarks, patents, copyrights, goodwill).

but so your thinking 19-20k is what i should be looking at for an omega 09..

[wagon_vs]

Do you know what an asset is? An asset earns income. If it doesn't earn you income it is a liability because it costs you money. If you are going for a loan and you own your car, then it is called an asset for the purposes of the loan and equity calculations, but unless it is used to generate income, it is not an asset.

I think you mean an investment. To me an investment is there to earn money, but an asset can be anything that is worth money, but my definitions could well be wrong.

[Reaper]

Do you know what an asset is? An asset earns income. If it doesn't earn you income it is a liability because it costs you money. If you are going for a loan and you own your car, then it is called an asset for the purposes of the loan and equity calculations, but unless it is used to generate income, it is not an asset.

Actually an asset is something that could be converted into cash (ie sold). Weather it is appreciating or depreciating is not part of the definition. Nearly all equipment is depreciating in actual raw value. That includes your own house. Assets may be used to assist in earning income whilst their actual value depreciates. Cars are no different as in many cases they are necessary in transporting people to and from their employment. There are many direct and in-direct pieces of equipment used in earning an income.

Reaper