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Golf R, used or new?

MSH

Passed Driver's Ed
Location
Denver
Except that the used car will depreciate 10 more grand in a couple more years.
While that may be true the new car will to. The difference is the new car, on average, takes ~20% of the depreciation in yr 1 with ~10% the minute you drive it off the lot. Yrs 2-5 are closer to 9-10% annually. I'm pulling these #'s from Edmunds and Carfax articles BTW.
It's that immediate depreciation straight away the minute you drive off dealer lot that kills me, but I get hung up on the #'s when I understand a lot of people don't give a shit. Different priorities for everyone. Anyways, that's the reason I targeted a '16 when I bought earlier this year and took my time to find a private party (vs dealer CPO for more $) example that was well taken care of.
 

Golfer883

Ready to race!
Location
IL
While that may be true the new car will to. The difference is the new car, on average, takes ~20% of the depreciation in yr 1 with ~10% the minute you drive it off the lot. Yrs 2-5 are closer to 9-10% annually. I'm pulling these #'s from Edmunds and Carfax articles BTW.
It's that immediate depreciation straight away the minute you drive off dealer lot that kills me, but I get hung up on the #'s when I understand a lot of people don't give a shit. Different priorities for everyone. Anyways, that's the reason I targeted a '16 when I bought earlier this year and took my time to find a private party (vs dealer CPO for more $) example that was well taken care of.
yea I worked the numbers before, I looked up some of the deal prices people were getting vs a 1 year old gti etc. added 12,000 miles a year on kbb private party sell price and the difference for year 1 was only like 2 grand more vs year 2-4. If you compare to sticker price your right but if you get a decent deal (5 grand off) then the difference wasn’t all that much.
 

Golfer883

Ready to race!
Location
IL
Actually did it again and first year to second was a bigger hit. After first year it was a wash though, pretty much same rate after that.
 

Mk_GTI

Ready to race!
Location
Hellinois
It's that immediate depreciation straight away the minute you drive off dealer lot that kills me
That's somewhat of a myth. Unless you can buy the car at wholesale, you'll get an almost equal depreciation hit on that used car as well.
 

jimlloyd40

Drag Race Newbie
Location
Phoenix
Ride
2018 SE DSG
That's somewhat of a myth. Unless you can buy the car at wholesale, you'll get an almost equal depreciation hit on that used car as well.
That's incorrect. A used car doesn't take another depreciation hit after being sold again. If that was true a two year old car that's had three owners would be ridiculously cheap.
 

Golfer883

Ready to race!
Location
IL
That's incorrect. A used car doesn't take another depreciation hit after being sold again. If that was true a two year old car that's had three owners would be ridiculously cheap.
only if the dealer has it marked a good amount above say the kbb private seller price then you eat that difference driving off the lot but the gti’s I’ve seen from dealers are pretty close to private party price
 

Mk_GTI

Ready to race!
Location
Hellinois
That's incorrect. A used car doesn't take another depreciation hit after being sold again. If that was true a two year old car that's had three owners would be ridiculously cheap.
Wanna bet? Go buy a used car from a dealer right now, title it, then immediately sell it back to them. You will lose money - aka depreciation.
 

jimlloyd40

Drag Race Newbie
Location
Phoenix
Ride
2018 SE DSG
Wanna bet? Go buy a used car from a dealer right now, title it, then immediately sell it back to them. You will lose money - aka depreciation.
That's correct. Because they aren't going to pay the same price. They want to make a profit. Has nothing to do with depreciation. The dealer incurs expenses when they sell a car and they're going to recover those expenses.
 

MyGolfMk7

Ready to race!
Location
FL
Ride
B5 S4, Mk7 GTI
That's somewhat of a myth. Unless you can buy the car at wholesale, you'll get an almost equal depreciation hit on that used car as well.
Let me get this straight, you contend that when purchasing a used vehicle once the sale occurs the used vehicle incurs a substantial drop in value, on par with what happens when a new car sale takes place and that new car is then sold as used?
 

Mk_GTI

Ready to race!
Location
Hellinois
Let me get this straight, you contend that when purchasing a used vehicle once the sale occurs the used vehicle incurs a substantial drop in value, on par with what happens when a new car sale takes place and that new car is then sold as used?
Correct. A buying a used vehicle isn't immune from steep depreciation, just like a new one. When you sell eventually the used vehicle, it depreciates just like a brand new one. Just because you bought a used one year old vehicle for 20% off the price of a new one doesn't mean you won't lose another 15-20% a year later when you sell.

Most vehicles depreciate around 40-50% in the first three years. How much it depreciates whether new or used depends on the vehicle.

Figure that that car bought new has also used up 6k-12k miles on the tires, warranty, wear & tear, possible accidents, etc. So that instant 20% drop starts to become less unless that new car was traded in immediately after it was purchased. If you sell that brand new vehicle a year later, the depreciation isn't likely to be 40% unless you bought a car that no one wants, like a Mitsubishi Mirage.
 
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Mk_GTI

Ready to race!
Location
Hellinois
That's correct. Because they aren't going to pay the same price. They want to make a profit. Has nothing to do with depreciation. The dealer incurs expenses when they sell a car and they're going to recover those expenses.
Actually, it has a lot to do with depreciation because the market drives what the cars are worth on the wholesale market since dealers sell the vast majority of vehicles under 5 years old. What your vehicle is truly worth is whatever someone is willing to pay for it, but selling your car privately at dealer prices isn't going to move it very fast unless you have a popular vehicle.

This article explains why buying lightly used cars isn't always the best deal: https://jalopnik.com/stop-overpaying-for-lightly-used-cars-1828576980

As with anything, YMMV.
 
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jimlloyd40

Drag Race Newbie
Location
Phoenix
Ride
2018 SE DSG
Actually, it has a lot to do with depreciation because the market drives what the cars are worth on the wholesale market since dealers sell the vast majority of vehicles under 5 years old. What your vehicle is truly worth is whatever someone is willing to pay for it, but selling your car privately at dealer prices isn't going to move it very fast unless you have a popular vehicle.
You said that a used car depreciates as much as a new car when it's sold. So lets say that a new car depreciates 25% when it is sold which is pretty close to accurate. So a 2017 Golf that sold for $25,000 new lost 25% when it was sold making it now worth $18750. A second person buys the car and it instantly loses another 25% making it now worth $14,062. A third person buys it and it loses another 25% making it now worth $10,546. You go find me a 2017 GTI that you can buy for $10,546. That's why what you said is wrong. A used car does not depreciate the same as a new car every time it's sold.
 

Mk_GTI

Ready to race!
Location
Hellinois
You said that a used car depreciates as much as a new car when it's sold. So lets say that a new car depreciates 25% when it is sold which is pretty close to accurate. So a 2017 Golf that sold for $25,000 new lost 25% when it was sold making it now worth $18750. A second person buys the car and it instantly loses another 25% making it now worth $14,062. A third person buys it and it loses another 25% making it now worth $10,546. You go find me a 2017 GTI that you can buy for $10,546. That's why what you said is wrong. A used car does not depreciate the same as a new car every time it's sold.
Most used cars do depreciate every time it is titled. Some more than others. Some increase in value after a while, like Mk4 Supras or S2000's for example, but those are pretty rare.

That Golf purchased by the second buyer would lose about around 20% if they sold it a year later. That Golf is now a two+ year old car with 20-24k miles on it if driven on the average. The car has used up a ⅓ of it's tires, brakes and warranty, wear & tear, etc which now eats into that "savings" you got from buying it lightly used. Buying an extended warranty eats up even more money. CPO warranties are generally better, but those cost money as well.

Now, go look at what a new 2019 GTI S sells for with all discounts possible applied and then look at what a used 2018 GTI S is selling for. The new 2019 is probably the better deal.

Now, how the actual depreciation depends on what number you bought the car for and what number you sell it for, no matter if it is brand new or ten years old. If you suck at car buying, then you will lose more money than a pro no matter if you buy new or used. Dealers aren't dumb and know some people don't even look at new cars because this myth is so ingrained. By the time they leave the dealer, they've negated most of the savings with extended warranties and APR's and other add ons.

There is no firm answer on whether buying new vs used is the better deal because there are so many factors. We can run tons of scenarios, but there is no one size fits all answer here.

The only way to not lose money on a car is to never sell it until it's useful life is over, which wholly depends on many factors. Remember, you still got use out of the car for your money. Cars should almost never be considered an investment and nearly always as a liability.
 
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jimlloyd40

Drag Race Newbie
Location
Phoenix
Ride
2018 SE DSG
Depends how quickly you sell that lightly used car you just bought. ;)
No it doesn't. You're just wrong. A used car does not depreciate as much as a new car does when it's sold. My example proved it. Selling it quickly doesn't matter. The condition does.
 

Mk_GTI

Ready to race!
Location
Hellinois
No it doesn't. You're just wrong. A used car does not depreciate as much as a new car does when it's sold. My example proved it. Selling it quickly doesn't matter. The condition does.
I was in the car biz for five years. Hate to break it to you, but it can.

Most cars lose around 50% of value in the first three years. How much of that percentage is lost by the first owner depends on a bunch of factors, one of which is the initial value lost is calculated from MSRP, which is where that 20% figure comes from. How much is actually lost after buying new depends on: original purchase price when new + market value at time of resale + method of sale (Trade in at Wholesale value or Private sale) + agreed upon sale price when selling as used.

You are not getting a 25% savings on that new car when you can get a brand new one for 10-15% off MSRP. I made quite a bit of money selling "lightly used cars" to people with your fixed mindset.

Your mileage will vary.

The larger point that seems to be completely lost on you is that every scenario is different, so there is no true accurate numbers. In most cases, a used car can lose another 20%.
 
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jimlloyd40

Drag Race Newbie
Location
Phoenix
Ride
2018 SE DSG
I was in the car biz for five years. Hate to break it to you, but it can.

Most cars lose around 50% of value in the first three years. How much of that percentage is lost by the first owner depends on a bunch of factors, one of which is the initial value lost is calculated from MSRP, which is where that 20% figure comes from. How much is actually lost after buying new depends on: original purchase price when new + market value at time of resale + method of sale (Trade in at Wholesale value or Private sale) + agreed upon sale price when selling as used.

You are not getting a 25% savings on that new car when you can get a brand new one for 10-15% off MSRP. I made quite a bit of money selling "lightly used cars" to people with your fixed mindset.

Your mileage will vary.

The larger point that seems to be completely lost on you is that every scenario is different, so there is no true accurate numbers. In most cases, a used car can lose another 20%.
We'll just have to agree to disagree.
 
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