What cars have hit the depreciation trough?

"caddyak" (caddyak) 04/07/2015 at 20:01 • Filed to: None

0

27

I'll be the first to admit that driving my BMW makes me quite smug. Not for the fact that it is a BMW (which, ironically, stands for Better Man Wins ) and I am thus better than the average person. No, that's not considered smug because it is a statistically proven fact.

My BMW makes me smug because it was a very smart buy. I picked up my excellent 2001 E39 M5, for just $9,000 with 129k mile. I'm wagering that the E39 M5 is currently in the depreciation trough.

The depreciation trough is a period of 2-3 years when a vehicle bottoms out in prices before creeping back up. Often associated with modern classics , the trough is the only time "investing in a vehicle" is uttered by people who don't sell those pyramid scheme energy drinks.

The depreciation trough is a phenomenon that only happens to a lucky few cars. Unfortunately, your 2001 Explorer which you picked up for $2,200 last year is not in the trough. Next year it'll be worth a new Blackberry or a six-pack of tallboys. If you're lucky, they'll be Blue Moon tallboys which isn't even a craft beer so stop acting like you have good taste.

To have what it takes to experience this phenomenon, a car must be:

Somewhat Rare. The '01 Mustang GT is a damn good car, but every hairdresser is Winter Park, Florida has one. It doesn't need to be a unicorn, but if there's two or more in your apartment complex, you're on the wrong track.

Desireable. The Suzuki Verona satisfies requirement 1, but don't re-mortgage your home to invest in Veronas anytime soon.

Enthusiast Following: The Acura SLX technically satisfies both of those requirements, but there's no SLX owner's club clamoring for clean, used boxes and paying too much for said boxes.

That's not to say other cars won't bottom out in prices. It just may take them 30 years to do so. What other cars are currently in the trough?

(Yes, I understand Tavarish got his garbage troll M5 for less than half that price, but mine did not require Joan Rivers levels of cosmetic procedures to look presentable.)

bob and john > caddyak 04/07/2015 at 20:05

3

not going to lie, I had to google Acura SLX

Steve in Manhattan > caddyak 04/07/2015 at 20:06

1

Back in the day, when radios were not coded and easy to steal, many said BMW stood for Break My Window.

jjhats > bob and john 04/07/2015 at 20:08

0

me too. then i was like wtf google thats an isuzu trooper

dieselectric > caddyak 04/07/2015 at 20:09

2

Maybe I'm just being biased and hopeful, but I feel that good condition Mercedes 190s are going to go back up. You can pick them up for next to nothing $1,500 -$2000 all day here on the west coast. They hold up really well, are easy to work on, and are basically the next BMW E30. I have a 190D and love it.

DoYouEvenShift > caddyak 04/07/2015 at 20:10

0

I just drove through Winter Park a few days ago and saw no Mustang GTs. Maybe I didnt hit up the right hair salons?

Axial > DoYouEvenShift 04/07/2015 at 20:21

2

OP slipped up. Hair dressers only buy the V6.

Axial > caddyak 04/07/2015 at 20:23

1

See: nameplate being used as my avatar picture. That's in its trough. Arguably, I'd say it's starting to come out of it. Three years ago, you could find them for $12,000 with only some minor digging. Now, it's harder to find one that's at $16,000. Most sit around $25,000 and the best examples are around $50,000.

E. Julius > caddyak 04/07/2015 at 20:38

1

Good beer doesn't need to be a craft beer, stop acting like you have good taste.

unclevanos (Ovaltine Jenkins) > E. Julius 04/07/2015 at 20:45

1

I endorse this post.

Manuél Ferrari > caddyak 04/07/2015 at 20:52

0

This topic interests me a lot.

I spend too much on cars. I want to stop doing that. But I still like toys. So I want to start picking winners and then selling at a profit to fund the next toy.

I need to think about which cars have not started going up yet.

But I have a related question for you - when it comes to future appreciation do you think it's safer to try to pick the next winner or just buy a car that has already been going up for the last year or two?

I know that if you do the later you have already missed out on some appreciation. But the advantage is that you don't have to wait for appreciation and you're at least assured that the car you picked is going to hold value instead of depreciate. If you speculate on which car will be the next to go up and you're wrong then the car can continue to depreciate.

E92M3 > caddyak 04/07/2015 at 21:02

1

E46 M3, Z4 M Coupe, 997 911's all come to mind.

Logansteno: Bought a VW? > caddyak 04/07/2015 at 21:06

3

Hmm... 1998 M3 Sedan.

Rare: Only 7,000 and some change made it to the US the whole E36 M3 production run. Who knows how many of those have been totaled.

Desirable: It's an M3, and the sedans are the most desirable body style according to some. Mine's an automatic though, so points deducted there.

Enthusiast Following: Oh yeah, for sure. It's from back when "Ultimate Driving Machine" meant something to BMW.

I'd say I picked mine up near the bottom of the depreciation curve: $3,300 for one that needed some love here and there. I'm hoping its value can go nowhere but up as I work on getting it back to its former glory.

Kofi > dieselectric 04/07/2015 at 21:19

0

I love me a clean 190e

66671 - 200 [METRIC] my dash > caddyak 04/07/2015 at 21:25

0

I'm thinking the Karmann Ghia might be around that area, whether before or after idk, hopefully before, cuz I want one bad but can't afford one yet.

N51fanatic > caddyak 04/07/2015 at 21:30

1

e34 m5

N51fanatic > dieselectric 04/07/2015 at 21:32

0

190e's are dogs that can't get out of their own way

wafflesnfalafel > caddyak 04/07/2015 at 22:25

0

I agree about the Acura SLX - we rented the Isuzu version in Vegas once and I was surprised how nice it was. Nice size, decent power, decent off road abilities, good brakes, liked the 'sport' option on the transmission that shifted noticeably quicker and downshifted earlier.

dieselectric > N51fanatic 04/07/2015 at 22:28

0

Well, I'm not going to argue about my 190D, which is glacial in acceleration. However the 190E 2.6 and 2.3 16-valve were all good for north of 160 hp. That is about the same as equivalent BMW E30s of the day, all with similar weights in 4 door-trim. With all those cars of the era, they were not blisteringly fast, but fun regardless. And swaps/parts are easy to come by.

dieselectric > Manuél Ferrari 04/07/2015 at 22:31

2

Buy a car cheaply that you appreciate. Then there is always an upside, regardless of the market. To actually think of cars as "investments" is foolish for all but the most sophisticated of buyers with storage space to ensure that they can hold value without decaying.

davesaddiction @ opposite-lock.com > E92M3 04/07/2015 at 22:33

0

997 prices have already bottomed out? Say it ain't so!

E92M3 > davesaddiction @ opposite-lock.com 04/07/2015 at 23:29

1

I believe they have for lower mileage Carrera S Coupes, and above. They haven't fallen in the last 2 years from what I can tell. The air cooled cars have shot up so far even a nice 930 starts at $30K minimum .The 996 gets no love. So for the people like me who can't afford a 991, you're left with a the choice of a nice 930 or spend $5-10K more and get a barely used 997. That's an easy choice for me. I'd love to have a mint 964 myself, but I'm not paying $55-60k for one with 120k miles, when I can get 997 with under 40K miles for mid 40's.

Manuél Ferrari > dieselectric 04/07/2015 at 23:34

1

yes this is good advice

I'm just an addict

Even when I do that I get tired of the car and sell for something else

I guess it's bad that I have good storage space for extra cars in the so cal climate. Feeds the addiction, haha

davesaddiction @ opposite-lock.com > E92M3 04/08/2015 at 08:57

0

The 997s are the last with hydraulic steering, right? That might be part of it.

I'm wondering where a well-kept, low-mileage E9x M3 will level off at. Last NA, last with hydraulic steering, bespoke engine, highest revving M3 ever. Will be interesting to see if the E46 or the E9x is more desirable/valuable over the low term.

E92M3 > davesaddiction @ opposite-lock.com 04/08/2015 at 10:45

1

That's a good point. Probably has an effect too.

I hope the E9X's do as well as cherry manual E46's are doing. The production numbers are about the same. I could see the sedans being more valuable just based on fewer numbers. The E46 is an iconic desgin, but has a few common problems that scare a lot of people away. Then there's the S65 which is just intoxicating!

davesaddiction @ opposite-lock.com > E92M3 04/08/2015 at 10:58

0

My car is far from cherry at this point (too many rock chips) and I'll have over 100k miles if I keep it a couple more years... but I've already heard on the forums how hard it is to find a manual sedan for sale, so that's a good sign for me (not that I have any plans to sell it, love the idea of keeping this one for the long haul). Hopefully the rod bearing thing proves to be a very isolated issue that is viewed as a minor worry over the long term.

Several friends from work and I are heading to NW Arkansas for a backroadtrip this weekend. Can't wait!

caddyak > dieselectric 04/08/2015 at 11:48

0

Yes, I can't agree more. I bought my M5 primarily because it's my dream car. If it continues to drop for the next two years, so be it. I won't be selling it for a long time.

All I know is it will appreciate. And I won't be selling it for a long time.

caddyak > Logansteno: Bought a VW? 04/08/2015 at 11:51

0

See I think the E46 may be approaching the trough in the next few years. I've been wondering when the E36 will finally start appreciating. I can see the sedan being the variant that does.

The issue with the E36 M3 is they made a s**t ton of them, relatively speaking. And the US version was so neutered compared to the Euro model that they haven't been holding their value well. I see a lot of stanced and beat up E36 M3s owned by young kids.

I think this is the same issue with non-M3 E30s. They're finally appreciating too.