Johnhav430

pop quiz: Is the depreciation good or bad, for someone looking to buy a 460 used? It's generally accepted that a MB after 10 yrs., is potentially 10% of its original sticker. Audi may be worse. What's the deal with the 460?

Toys4RJill

Johnhav430

I know my real world decision in 10/16 was 2006 LS430 with 81k, or 2014 Camry with 35k CPO, identical price (for kicks 2006 A8 that listed for $14k more than the LS430 when new, $2,500 less than the other 2 cars, with 60k miles). I'm more vain and took the LS. Two guys in my office got the Camrys, one had some issue with the screen, but other than that both Camrys 100% reliable...

jrmckinley

I bought a 2010 460L with 65k miles in Feb 2017 for $22k. It had an absolutely flawless service history and I'd rate it a 8.75 out of 10 cosmetically at the time I bought it (it needed a good detail). That's A LOT of car for $22k. Ridiculous value- it had effectively lost almost 70% of its value in 6 1/2 years since it was produced (July 2010). Buying these well-maintained premium cars at the peak of their depreciation has always been a successful recipe for me. I can appreciate and respect the different view points of folks who only buy new or lease, but for me I'll keep buying using my same formula.

I'm not only spoiled by the LS (having owned 3 of them as I mentioned), but apparently I'm spoiled by the rapid depreciation. If I was looking to spend $35k and could get a 460 or a 4Runner, I'd have a very hard time justifying the 4Runner unless I absolutely had to have an SUV.

Johnhav430

Sweet. I plan on being one of those fools who buys a used S550....question is, $30k, or $15k, pick your poison. Not anytime soon, have it in the back of my mind like on a bucket list (the LS430 was too easy, like shooting fish in a barrel, of course nothing really broke in 20 mos., that's the Lexus way, set it and forget it). It's like going to this swimming hole where you dive off of cliffs, everybody's doing it, but you don't cuz you were always told not to jump off a cliff cuz everybody else is. But sometimes, it's way more fun to just jump...

bitkahuna

iTrader: (20)

right but what's also relevant is price OFF sticker when bought. if one gets a 5K discounted deal on an LS460 that's a way SMALLER percentage discount than 5K on a 35K 4Runner (which you likely won't get anyway).

also, the 4Runner is pretty unique (little competition) and has a stellar reputation for what it is, no frills, old but highly reliable tech, will last forever, etc. it is what it is.

but it's generally true that the more expensive the vehicle, the higher the depreciation - why? because people who buy/lease these new want the latest. there's less demand for used flagships because a) as i said most people want the latest, and b) people are concerned about all the features of a used flagship breaking if the car is older.

in fancy neighborhoods you don't see that many people driving old mercedes, lexus, etc., because they would seem out of place and not keeping up with the jones.

funny though, the owner of our local toyota dealer who is very wealthy apparently drives a 4runner.

Sulu

The key factors that determine depreciation are demand for an older model, balanced by supply.

Here are the factors that contribute to the low value of an older, used luxury car.

1. Many luxury-branded cars are leased; leased cars are more affordable than financed purchases. This means that there is a consistently steady supply of relatively new (2 and 3-year old) luxury cars.
2. While supply of used luxury cars is high, demand may not be that high. Those who lease a new luxury car will probably turn in their old one and lease another new model. The attraction of a new luxury car is that it represents the best that an automaker -- and the industry as a whole -- has to offer; many people who like and can afford a luxury car want the best available in the auto industry.
3. New luxury cars are the best because they offer leading-edge technologies not (yet) available on less-expensive cars. These new technologies are difficult to maintain, requiring expertise and specialised tools only available at luxury-brand repair shops; they are thus expensive to maintain and repair, unless they are still covered under a new car warranty. That makes an older luxury car, no longer covered by warranty (or close to the end of the warranty), so much less desirable, driving down demand.
4. Conversely, mass-market vehicles that do not use leading-edge technologies are so much easier to maintain and can be serviced at so many more shops; this reduces the cost of maintenance and repair, and raises the demand for used mass-market vehicles.

situman

The difference is, if you jumped wrong, it's a 1 time error and short term pain and you become fertilizer. Doing that with purchases, its term pain with lots of money in a very deep cliff. Then your significant other will kill you, if you have a significant other.

Aron9000

As Masrhall pointed out, its all about supply and demand. SUV's are hot right now, people want them. I also think the 4Runner is kind of a unique vehicle now days, its still a truck, body on frame, great off road capability, it stands out from the sea of FWD car based crossovers.

Pickup trucks are also hot, I ended up paying IMO a pretty penny for my 2011 Tundra. I could have bought a 2011 BMW 335is coupe, turbo inline six, 6 speed manual, a real performance machine for 3-5k less than my truck with similar miles(ie under 60k miles) and in really nice shape like my truck. I thought about something German and interesting, but I was going down to one car, cost of repairs, tire bills, and downtime in the shop were big factors that steered me away from anything German.

Also thought about being sensible and buying a nicely equipped brand new Mazda 3 or 6 for similar $$$$. Decided against that, unless I owned it for more than 4+ years, the fuel savings from not buying a truck would be wiped out by depreciation. I only drive about 10k miles a year, that truck will be worth 2-4k less 3 years down the road if I sell it, the Mazda, it loses like half its value.

Buying a new or even used car, you really need to factor depreciation into total cost of ownership. Tacomas(crew cab V6 models) hold their value even better than the Tundras. Both were similar price used, decided I liked the way the Tundra drove better, also liked the size factor.

BippuLexus

This.

SUV are in high demand and sedans aren't.

situman

I just feel like when people buy used, they think about long term durability of these vehicles and long term cost of ownership. Will the LS cost more to repair as it ages? Yes. Will the LS be as durable as a 4runner? No.

Infra

iTrader: (1)

What's the question here? It is standard for a car to depreciate 50% in 5 years. You're asking why the LS depreciates so fast. The answer is that it doesn't. It depreciates normally.

You should be asking why the 4Runner is an anomaly, as is every other truck / SUV.

plex

iTrader: (11)

Correct and the 4Runner even in used market holds it's value very well. Hard to compare it to other SUV's or even cars.

jrmckinley

I think these are 2 very broad statements - I haven't done the research but feel like what you're saying is that "every other truck" depreciates as slowly as a 4Runner won't be true. If I looked at SUV's like the Tahoe/Yukon, Kia Sorento, Nissan Pathfinder, Dodge Durango, Jeep Grand Cherokee - you think I'd see a similar depreciation pace?

Toys4RJill