Toys4RJill

Evening out at the end of what?

SW17LS

If you spend $55,000 and it holds 55% of its value after 3 years and you sell it the residual value is $30,250, so its cost you $24,750 to own the car for 3 years.

If you spend $45,000 and it hold 45% of its value thats $20,250 residual, so its cost you $24,750 to own it.

10% swing in residual value, but boils down to the same cost because of the upfront savings in initial price.

coolsaber

I dont get it, why would depreciation account for a difference in market adjustments/markups?

SW17LS

I'm not saying it does. I'm saying that the argument that you shouldn't buy a Palisade or a Telluride because of projected lower residual values doesn't really hold water when you look at the value of the vehicle from the initial purchase price perspective.

Paying a $10k markup for a vehicle like this is clearly not a smart financial decision.

stasek

Right now, if Hyundai Financial is correct in their forecasts, the Palisade will be worth about 60% after 3 years/36k miles. That’s pretty much inline or better than many other cars in this class.
They don’t lease particularly well due to virtually no dealer discounts and not much “lease cash”.

SW17LS

I wouldnt hang my hat on that lol. That residual is high to make the lease payments passable.

Toys4RJill

This is weird math. Are the MSRP prices the same? I was only referring to resale value based on buy, not leased residual.

people who are paying full MSRP for these new vehicles are not making a very wise financial decision. Eventually the price will all even out and the discounts will be there. History has shown Hyundai and Kia products do not have a very good resale value.

SW17LS

Whats weird? Its an illustration comparing one vehicle with an MSRP of $55k and a 55% projected residual and another vehicle with a lower sales price and a lower residual to illustrate that the lower sales price of the Hyundai evens out the potential difference in resale value.

I'm not talking about lease residuals.

MSRP or less than MSRP (or more than MSRP) doesn't really mean anything. Sure if you wait, you'll get a better deal, but what if you need or want a car now? Not everybody can or wants to wait.

If I were buying a Palisade right now, I would negotiate the best deal I can, but if that deal is MSRP then thats the best deal.

Toys4RJill

Sure it does.

SW17LS

Why? MSRP is just a number. The desire to pay less than MSRP is just a mental thing. What I care about when I buy a car is how good a deal I can get on that particular car. The deviation from the MSRP doesn't matter, if I have made a decision to buy a specific car and MSRP is the best deal available, then its the best deal available. If its $5,000 more than MSRP and thats the best deal, and I still want the car for that MSRP then thats the best deal. If its $5,000 less than MSRP, same thing.

I don't think it makes sense to pay a $10k premium over MSRP for this vehicle because if I'm shopping in the upper $50k range I have a lot more options. I can consider an Aviator, a base X7...an Explorer Platinum...has nothing to do with that price relative to the Palisades MSRP

Toys4RJill

I look at it differently. I like to know what the dealer cost is, what the mark up is. Is there room for negotiation. If MSRP is the only deal available, I would not buy the car.

SW17LS

That’s your own mental hang up. The Palisade is a great buy at the $48k MSRP. Hence why they’re selling so well

Toys4RJill

No not at all. I look at it from the wealth perspective (everything really). I look at it from the most cost effective way of obtaining something. Paying a high mark up over cost does not mean a great buy for me. Add in the usual poor Hyundai/KIA resale value, it is makes for a terrible deal (to pay MSRP) IMO

(They are selling well because they are cheaper than a Toyota, a Honda, a Ford). They also have good reviews as well. But they are still cheaper.

SW17LS

Your approach to money means you would never buy any of these cars anyways.

Plenty of people buying them so i don’t think whether or not you would buy one matters to much to them.

Right, they’re selling well because they’re a great deal, even at MSRP. You can go buy something else and pay more and feel better you got something off of MSRP. Like I said, mental hang up.

Toys4RJill

I would never buy a new Hyundai or KIA.

It makes no difference to me if someone else wants to buy them at full price. Would I shake my head at the decision? Yes. Are they just wasting money? I believe so. At the end of the day, Is it their money? Yup.

Or I can wait until the price comes down.