Why You Should Not Buy a New Mercedes Benz

"CAR_IS_MI" (car-is-mi)
03/11/2014 at 17:22 • Filed to: None

Normally, for an article like this I would lay out some pros and cons and use complicated words that make you feel emotions. But not this time. No. This time, I wont need emotions. I won't need complicated words that I have to reference dictionary.com to make sure I am using them improperly. Why?

Mostly because I am tired and big words take thinking; but also because of one, simple, word: Depreciation.

Now we all love some nice Mercedes Benz, but the cold, hard fact of it is; they depreciate faster than Enron's stock in late 2001.

Now I know what you are thinking, and yes, cherry lime-aid is awesome, but for the same price as a nice new CLA AMG, you could be driving around in a 5 year old, low mileage CL63 AMG. A car that, 5 years ago. Would have retailed for somewhere around $150,000. Thats almost 70% depreciation in 5 years.

And it does not get any better with the other higher end options. So if you are looking for something newer and luxurious, go find a nice, used, high end Mercedes, and save yourself thousands on initial price and depreciation loss.

DISCUSSION (46)

Brian Silvestro > CAR_IS_MI
03/11/2014 at 17:23

That's why I keep telling my dad to sell his as soon as possible, he just won't listen to me.

Saracen > CAR_IS_MI
03/11/2014 at 17:24

You're not the first one to think of this.

You also won't be the first to realize the hard way you will still be shelling out for the maintenance of a $150,000 car.

jkm7680 > CAR_IS_MI
03/11/2014 at 17:25

They do go down quite a bit. Cars that were $100,000+ in 2001. Now sell for $13,000 like the Cl600 Amg.

CAR_IS_MI > Saracen
03/11/2014 at 17:26

Lol. True, but I have no desire to drive a Benz, honestly. Just got sidetracked (somehow) while looking at Ferrari Mondials (dont ask)

KusabiSensei - Captain of the Toronto Maple Leafs > CAR_IS_MI
03/11/2014 at 17:26

You can't simply just consider initial purchase price. Because while a $150,000 German car will depreciate like a stone, they still require the maintenance of a $150,000 German car.

High end purchase price means high end maintenance bills.

I'd take a slightly used diesel E Class over a new one on purchase cost, and the slightly used diesel E Class over a CL63 on maintenance cost.

CAR_IS_MI > jkm7680
03/11/2014 at 17:27

It is kind of sad that they just can't hold their value.

Nibby > CAR_IS_MI
03/11/2014 at 17:28

http://www.ebay.com/itm/Mercedes-B…

CAR_IS_MI > KusabiSensei - Captain of the Toronto Maple Leafs
03/11/2014 at 17:29

No its true. But even so, it is still cheaper than buying new. Plus, if your half insane like me, you 'find' ways to lower the cost...

jkm7680 > CAR_IS_MI
03/11/2014 at 17:29

Same with the Maserati Quattroporte. Only good thing is, I can finally afford one!

Tom McParland > CAR_IS_MI
03/11/2014 at 17:32

That is why no one buys 150k Benzes, they lease them and those that do are so filthy rich depreciation won't matter

CAR_IS_MI > Nibby
03/11/2014 at 17:32

http://www.ebay.com/itm/Mercedes-B…

CAR_IS_MI > jkm7680
03/11/2014 at 17:34

The QP did depreciate a lot but not near as much (on a time table basis) for the same $ your looking at an 05- 06 QP vs an 09-10 MB

HammerheadFistpunch > CAR_IS_MI
03/11/2014 at 17:35

I guess that's why Mercedes...in my mind...stopped being a premium car maker and have moved into be a luxury goods manufacture. The difference is that a premium car maker's car has a reason to justify the premium. A Luxury goods manufacture charges a premium as well, but most of the value tied to a perceived luxury index. When the "luxury" of the good is perceived to be outmoded, the index shows a sharp drop in what is "luxury" about the item and since the value is tied that index...off the cliff she goes. Trends in electronics and high fashion fall into the same category...its a pricy life to live. Smart people know to buy value, not "luxury".

jkm7680 > CAR_IS_MI
03/11/2014 at 17:36

Agreed, I'd rather take a Qp.

Arben72 > CAR_IS_MI
03/11/2014 at 17:37

I bought 2 s550s new and will be getting another soon. Collectively I lost ~50000 in depreciation over 4 years. ~40% loss over 4 1/2 years isn't that bad. Yes 50,000 sounds like a lot but you have to think about it in percentages. It's still high but you have to pay to play.

Textured Soy Protein > CAR_IS_MI
03/11/2014 at 17:39

If you want a fancy German car that you want to A) keep around 5-7 years and/or B) modify, then buy a used one.

If you want a fancy German car, don't plan to modify it, and don't plan to keep it more than a few years anyway, lease. I'm paying $447/mo for 36 months on my 135is that stickered at $49k.

If you want a brand new fancy German car that you plan to drive for the next 10+ years, buying isn't a bad option. My dad bought a '97 Mercedes E420 in May '96. I think it was like $52k back then. He, then my younger brother, then my younger sister, all drove it until finally getting rid of it in June '11. By then it had depreciated so much they donated it and took a tax deduction (which at my dad's tax rate is worth doing).

Mercedes Streeter > CAR_IS_MI
03/11/2014 at 17:41

This also applies to Daimler's other lines of vehicles, primarily smart and those MB/Dodge/Freightliner Sprinter vans.

In the case of smart, they hold their value for about two years, then plummet sharply...especially if you pile on some miles...

CAR_IS_MI > Tom McParland
03/11/2014 at 17:42

Lol. Thats just dumb on their part. Mostly every big ticket item I have ever bought, I have been able to do so by allowing someone else to take the hit on depreciation. Silly rich people.

CAR_IS_MI > HammerheadFistpunch
03/11/2014 at 17:43

I like this. lol.

CAR_IS_MI > Arben72
03/11/2014 at 17:46

Are you in the US? Because here, I have seen the average 3 yr depreciation rate on S classes to be about 45%, jumping to about 60% by 5 years. (which is a lot no matter how much money you have)

Harrycarry250 > CAR_IS_MI
03/11/2014 at 17:51

Ever driven one? Doesn't matter if there old or new, they go like no other car on the market. All luxury vehicles depreciate like a falling rock but just targeting Mercedes and telling people to never buy one, I think that is slightly extreme. I dont like BMW but I would never tell someone not to buy one. There's my opinion, its on the internet. OPEN THE FLOOD GATES

CAR_IS_MI > Harrycarry250
03/11/2014 at 17:53

I didn't say NEVER buy one. I just suggested letting some poor sap with more dollars than sense take on the depreciation losses and then you acquire one second hand.

Arben72 > CAR_IS_MI
03/11/2014 at 17:54

Yes I am. No one pays msrp on s550s. My first one was ~25k off msrp and second was ~$20k. Plus I have a warranty if something goes wrong unlike beat up old ones.

CAR_IS_MI > Arben72
03/11/2014 at 17:56

You can get warranties on used cars....

and really, they took $25 grand off the MSRP? thats some serious freaking markup.

Arben72 > CAR_IS_MI
03/11/2014 at 18:03

You can but you also have maintenance coming up even at 40k miles. Which if that cl63 was actually driven means 1k (service 2), 2,000 tires (every oil change with the bigger amgs), and 6-8000 on brakes. I don't have an amg but that's what a friend was spending. The mark up is huge, the trick is buy a new one from the year before models. My 2010 was bought right when the 2011s were announced. I only lost $10,000 on that trade in. The 2012 I bought mid way through the model year and now with the new one out I've lost over 40,000 on it.... The twin turbo engine is sublime though.

Milky > CAR_IS_MI
03/11/2014 at 18:08

Still don't care, don't tell me what to do. A big CL (or S Class Coupe) has been my dream car for old me, for about a decade now. Old me will have money (he better dammit) and old me will want this car.

Kinja'd!!!

(plus if you can afford it, you have money to blow. Not to mention if you buy one as the new model comes out you can keep it in your garage for 6-7 years and it will still look new)

CAR_IS_MI > Arben72
03/11/2014 at 18:17

6 - 8k on brakes? Only if they are the carbon ceramic, otherwise you are getting royally raped in the anus without lube.

Makoyouidiot > CAR_IS_MI
03/11/2014 at 18:23

Mondial ftw

Tom McParland > CAR_IS_MI
03/11/2014 at 18:24

True only if you care about your budget, which most of us do. But if I won the 200+million Powerball I would call my favorite Benz dealer and have a brand new E63 wagom ordered. Because 125k out of 200mil is nothing.

Arben72 > CAR_IS_MI
03/11/2014 at 18:25

Rotors are about 1200 a piece at the dealer. About 800 if you go 3rd party. The rest you can leave up to the stealership but don't forget it's still a 150k car. The regular non amgs aren't that bad to maintain though as I'm assuming part sharing of consumables with the other regular models.

CAR_IS_MI > Tom McParland
03/11/2014 at 18:28

True, but most people buying 125k Benz's arent worth 200 million. I would say many are spending equal percentages of their income on a monthly payment as you or I do. (well maybe not me because for I while I had more in car loans than I did in Mortgages...)

CAR_IS_MI > Arben72
03/11/2014 at 18:30

1200 a piece for steel rotors? again I can see if they are the carbon ceramic brakes, but not a standard braking setup.

Arben72 > CAR_IS_MI
03/11/2014 at 18:36

Yep 1200 for steel rotors. Don't ask how much the little motor for the rear window blinds cost or how much an electrical short could cost (luckily the body shop that messed up covered it). These are extremely expensive cars, just because they have a relatively common brand name, don't expect the dealers to use lube.

CAR_IS_MI > Arben72
03/11/2014 at 18:39

I never go dealer direct, ever, at all, period (although that's also partly because of my background and what I do) , but still, that is outrageous. I presume, as it is MB, they have found some strange reason to make it so these rotors cant be turned down either.

JR1 > CAR_IS_MI
03/11/2014 at 19:19

Not all 150k cars depreciate...

Kinja'd!!!

CAR_IS_MI > JR1
03/11/2014 at 19:20

very true good sir.

and most don't depreciate as fast as MB.

but very few appreciate.

Arben72 > CAR_IS_MI
03/11/2014 at 20:22

It depends on the car with me. I love diying but I know if I mess up something on the Mercedes it'll hurt more then paying the dealer. Actually the s550s have been really reliable except for O2 sensors at 6500 mi on both of them. Maintenance isn't bad on the non amgs, I probably spent 2,000 or so over the years on both of them. I can't remember if the rotors on my friends car were drilled but I think they were. I don't think you can resurface them but I'm not an expert and haven't had to deal with that issue.

JohnPlayerSpecial > Textured Soy Protein
03/11/2014 at 21:04

That's what my family is doing with a 2013 G550 they recently acquired. They will most likely keep it for decades.

Jayhawk Jake > CAR_IS_MI
03/11/2014 at 21:05

NEWS FLASH: IF YOU ARE WORRIED ABOUT A NEW CAR HOLDING VALUE YOU SHOULD NOT BUY A NEW CAR!

Jesus christ, how has no one figured this out yet? New cars are not investments. Okay, maybe the super rare, super expensive ones like the One:1, but your run of the mill production car? It's GOING to lose value, and it's GOING to lose a lot of it.

quarterlifecrisis > CAR_IS_MI
03/11/2014 at 21:55

I think a big factor with them, other than what Mr. Fistpunch said earlier, is the cost when shit starts to go wrong out of warranty. MB is always on the leading of technology in cars. Which is great. However, now there are so many additional systems and parts to potentially fail...the dealership service department will be making a killing on these things when they start to break. Figure that many will lease, some will buy new and unload as soon as they start to go out of warranty, some will buy CPO and unload as soon as they go out of warranty...and then some Jalop will pick up a 2014 S63 for $25k in 5 years and spend $40k on service the first 2 years they own it.

crown victor victoria > CAR_IS_MI
03/12/2014 at 10:30

I understand the residual value game, but I don't think I have ever, ever looked at a car as a sound financial investment, or included depreciation rates in any kind of decision making process when I've been on the market to buy. For anything you're buying that's also going to be put into daily use, it WILL depreciate and cost money to maintain.

Yes, you could seek out the car that depreciates the least in order to protect your investment. But car buying is an emotional, subjective and often irrational process for most people. Residuals are not typically high on the list of needs for shoppers. It's solidly mid-pack, according to NADA 's most recent report (Sept. 2013):

Kinja'd!!!

Vehicle design is a much more important purchase factor, as is fuel economy, safety or brand. So few would seek out the Hyundai Accent solely because it has a high residual value, especially if they like the Ford Fiesta "better" for many different reasons.

If you're leasing , the residual is something you'll want to pay attention to as it DIRECTLY impacts the amount of money you're paying to use the car for 3 years. But if you're buying and have depreciation rate high on your list, you'd be better off buying property or bonds or something else that's a better investment with higher returns.

CAR_IS_MI > crown victor victoria
03/12/2014 at 11:03

I always pay attention to depreciation. Not because I consider it to be an investment but rather, I know myself all too well. The longest I owned a car was 5 years, and of those 5 I spent 1 full year with it apart while I built it out to my liking and it spent 1 full year in storage waiting for me to ship it across the country to my new home. after that the longest I owned a car was 29 months (and no it was not a lease).

Knowing that, I have to keep in mind what the car will be worth in that time frame (2 - 3 years from the time I purchase it) vs what I will owe. If per-say, I were to buy a $150k benz that, 2 years from now is worth 100k, but my monthly payments minus interest have only paid 35k on the car, I would now be upside down, so this would be bad for me. on the flip side, If I bought a 150k car that was worth 125k in two years and I had paid 35k towards the principal, I now have a 10k in equity towards what ever the flavor of the next 6 weeks is...

crown victor victoria > CAR_IS_MI
03/12/2014 at 12:23

Well for your particular buying behavior, yes you'd want to be mindful of depreciation.

But on the Car Buyer bell curve, you are an outlier. In the US at least, length of car ownership for both new and used vehicles have reached all-time highs. People keep their cars for as long as they possibly can.

Frequent buying and selling is atypical, which probably explains why depreciation is not a major concern for people on the market.

CAR_IS_MI > crown victor victoria
03/12/2014 at 12:27

If its something you plan to keep until you at least break even on it then so be it (and by break even I mean its worth what you owe), But my skin crawls if I am behind the wheel of the same vehicle for too long.

Just4GP > CAR_IS_MI
03/28/2014 at 19:42

When I first bought my 9 y/o CL55 AMG, I didn't even consider what maintenance would cost me over the years. The first time I took it in for service (Service B) I damn near lost it. I couldn't believe what I was being quoted for basic maintenance. Then I needed tires (holy f@#$). And shortly after that, I needed brakes. All I could do was ask what have I gotten myself into.

One day for shits a giggles, I decided to shop around for parts. First brake pads, then belts, filters, and tune up parts. What I found was, while there is still a premium to be paid for some of these items, it wasn't as bad as what I was quoted from the dealer and MB certified mechanics. Amazon.com saved me hundreds over what a mechanic wanted to charge. Everything I purchased was either OEM or a better aftermarket part.

When it came time to actually doing the work, I realized it was actually pretty simple (in most cases). People constantly talk about how this was a $100K+ machine and requires a special touch. What they don't realize is that for that kind of money, you're getting a VERY well engineered machine. A lot of thought and planning went into the design and build of this car and it's surprisingly simple to work on. You just have to take the time to learn how to do it.

I love my used AMG and when the time comes, I'll be buying another used Mercedes.

Mamasita1987 > CAR_IS_MI
01/24/2015 at 08:19

If depreciation is an issue, look into leasing. You only pay for the portion of the vehicle you use.