Is resale value really that important?

[hitomi]

This is true and I agree with this bloke ...
...Its not like we all have the same budget, and requirements in a car

sir cardo is right, different strokes for different folks.
anyway, here's my two cents:
if you have the money - frankly, resale value is unimportant. i've seen lots of people with money sell a car under its market value because they are not thinking of making a profit. they just want to sell the car and buy another one.
on the other hand, if you really really have to work for that monthly payment - and the threat of suddenly selling the car for cash is real (money for hospital etc.) - resale value is important.

[mike01]

sir cardo is right, different strokes for different folks.
anyway, here's my two cents:
if you have the money - frankly, resale value is unimportant. i've seen lots of people with money sell a car under its market value because they are not thinking of making a profit. they just want to sell the car and buy another one.
on the other hand, if you really really have to work for that monthly payment - and the threat of suddenly selling the car for cash is real (money for hospital etc.) - resale value is important.

that is what i was telling.. people who buy high depreciation korean cars are richer , than people who buy japanese high resale car like corollas..

so in essence its the other way around.. mas lumilitaw na mas mayaman ka pag naka picanto ka kesa naka vios ka..

when i see people driving a corolla i see practical people, who value money..

[pobreparin]

wala pa naman talaga kasi mga kia at hyundai nung mga 80's kaya wala ka talagang makikita na 20 year old car sa kalye. actually, when these korean car makers started, their cars are not as durable compared to its japanese counterparts. shempre, may learning curve yan. but during the recent years, ang laki na ng improvement ng quality and finish ng mga hyundai and kia so i think people should consider them as major competitors in the market.

exactly!what the korean manufacturers are experiencing right now maybe similar to what the japanese manufacturers have experienced before when filipinos also would just trust american muscle cars back then....

[redorange]

take a look at businesses and corporations who depend on cars for their business (taxi's, driving schools etc)..

do they use kia's or hyundai's?


even taxi drivers i asked do not recommend kia's .. i expect a different answer but they really don't trust kia's or any korean cars.. i always get that same answer..

even an officemate of mine who owns a talyer told me "wag ka bibili ng kia, parang tinapon mo lang pera mo" .. well kia have improved.. but still a long way from toyota.. they still need to sell cheap to match toyota..

If I based my car buying decision on a cab drivers opinion I would be driving a Chevy Caprice or a Ford Crown Vic since all the cabs here are Chevys or Fords.

just to clarify.. a car's resell value is according the the 'demand'.. the more buyer for a car the higher the resell value is..

you have to understand first, why does the used car have more demand? from there you will understand why the car is worth keeping for a longer period of time..than a car with less demand..

so in essence.. a high resale value means longer usage.. longer usage translates to more economy and more value for money.. you could use a low depreciation car that you bought brand new for 20 years (see those 87 box type lancers, and corolla dx on the streets?) before you might need to junk it.. so pwede mo pa sya ipamana sa anak mo..

i have yet to see a 20 year old korean car running on the streets..

Kinda hard to find a 20 year old Hyundai/Kia considering they've been in the Philippine market for a little over 20 years only, also those cars were their growing pain years. I'm pretty sure the Japanese brands had the same issue when they first came to the Philippine market when everybody was driving American made cars. I had an uncle in the early 70's who didn't want Japanese cars because he felt they were cheap and disposable. You may not remember the times when made in Japan was considered inferior to made in the USA not just in cars but in other products also. Later on it became acceptable and made in Korea was considered inferior until they became better and now it's made in China and the cycle goes on. Each will have it's growing pains until they learn the secrets of the trade and improve.

Resale value is only important if you plan to sell the car in less than 5 years. However, most cars lose 20% of their value in the first year so you shouldn't be expecting to make money. The ideal would be to buy a 2 year old used car because the largest devaluation of the car will happen in years one and two of ownership. As far as high resale value being equal to longer use I don't think one is related to another. Longer use normally relates to how well a vehicle is maintained not to it's resale value. Also if you plan to keep the car long and pass it on to your kids then resale value shouldn't matter because you won't be selling it.

I personally buy my cars with long term use in mind and don't plan to sell it so resale isn't very high on the list. Cars should never be viewed as an investment because unless you buy a collectors item the car you buy has zero ROI.

[redorange]

that is what i was telling.. people who buy high depreciation korean cars are richer , than people who buy japanese high resale car like corollas..

so in essence its the other way around.. mas lumilitaw na mas mayaman ka pag naka picanto ka kesa naka vios ka..

when i see people driving a corolla i see practical people, who value money..

Wow so the guy who drives a Norkis is the riches guy around then compared to even the Hyundai/Kia people and Japanese brand folks?

Nice logic there I always thought people bought those cars because it was the most affordable for their budget or they just liked the cars. Now you're saying it's because they could afford to throw away money.

[pobreparin]

Wow so the guy who drives a Norkis is the riches guy around then compared to even the Hyundai/Kia people and Japanese brand folks?

Nice logic there I always thought people bought those cars because it was the most affordable for their budget or they just liked the cars. Now you're saying it's because they could afford to throw away money.

got confused too with this logic....
parang bigla akong nag-feeling mayaman....

[ptk675]

Wow so the guy who drives a Norkis is the riches guy around then compared to even the Hyundai/Kia people and Japanese brand folks?

Nice logic there I always thought people bought those cars because it was the most affordable for their budget or they just liked the cars. Now you're saying it's because they could afford to throw away money.

value is relative. the sta. fe is more expensive than a fortuner, and yet it is korean. i guess that makes their owners doubly rich? kasi nakabili na sila ng mahal, tapos korean pa so di sila worried sa depreciation.

but imho, resale value is not important unless you're in the buy and sell business. whether you buy a merc/bmw or a 'lowly' kia, you bought it for a purpose. and if the car has served you purpose then that means it has already provided you value. so whether you sell it or keep it, the money spent on the car has alrady served its purpose, unless the car always breaks down and you are not able to use it.

[uwak18]

that is what i was telling.. people who buy high depreciation korean cars are richer , than people who buy japanese high resale car like corollas..

so in essence its the other way around.. mas lumilitaw na mas mayaman ka pag naka picanto ka kesa naka vios ka..

when i see people driving a corolla i see practical people, who value money..

That's not true in my case. I got my Picanto over Vios in several reasons including the difference for initial cash out and the difference in monthly payments. I want to get the Jazz at that time but it's really way over my budget. I'm a family man who is paying a lot of obligations including housing, bills, etc etc. But I'm not rich. I was choosing Picanto over Getz also but I love the looks of Picanto. But that just me. To tell you the truth. I also one of the guys before who curse Korean cars because of the resale value thing and because of the build quality is a crap. But that is before and long gone years ago. Now I love Korean cars. But That doesn't mean I hate Jap cars or others. Now all I see is that you have to experience first hand on owning a Korean Car to prove that others are wrong regarding quality and resale value. We always set our ming into thinking that once a brand or things that have bad image we always do na. Things change and quality of Korean cars change. I know more tsikot members go over Resale value and Jap cars. Reading post even before I was a tsikot member clearly show this. We have different preferences. But what I want is respect for Korean cars owners not bashing them or cursing them and saying "OUR JAPANESE CARS ARE BETTER THAN YOUR CRAPPY KOREAN CAR. AND YOUR RESALE VALUE SUCKS."

[niky]

think about it..

a 20 year-old 87 lancer box type sells for around 80k when this has sold during its time brand new for a little over 100k.. its like losing nothing..

and compare that with a 10 year old kia pride that sells for around 70k. with a brand new purchase price of over 200k during its time..

I've finally consulted my classified tables. (I buy Buy&Sell every week, Car finder every so often, and the used lots to calibrate "high" asking prices). I suggest you do the same, because your idea of resale values is very inaccurate.

Three year old Vios's are pegged at 60%. Great rate, but that's far from being 80% over five years. Seven year old Corollas depreciate at the same rate as other cars of that age now that the Altis is out. Slightly high resale for current Altis and Vios models are driven by the fact that there is no superseding model.

A box-type Lancer for 80k is a well-restored one. Prices are on the rise because they are desirable classics. Not because they are Japanese cars. If you want to cite that, I'll cite a local 1970's Ford Escort that sold for 500,000 pesos. (This is true). That's a staggering resale value of over 100%... from a non-japanese car. A total POS, at that, with rust issues longer than the Pasig river, hard-to-find parts, and nothing much more besides sentimental value.

For that restored Box Type, it's a 30% resale value, based on historical peso-dollar exchange rates. Not exactly 110% For your normal, everyday Box Type, at 30k pesos (fair price), that's a resale worth of 11% of the brand new price.

Heck, I could buy a Box-Type or an Escort now for 5-10k, running condition, but crappy. Then re-sell it at 1000% of that after restoration. It's not a realistic gauge.

Your 10 year old Kia Pride, based on historical exchange rates, is worth 23% of its original price at a more realistic 90k pesos. That's nearly the same... a staggering depreciation of 7% per year! Wait, that's not right...

Cars depreciate about 20 - 40% in the first year, depending on how badly people love/hate the brand, which can be a realistic love/hate or not. Once you've lost that lump sum, they depreciate in a non-linear fashion... depending on market forces. Some people try to sell nearly brand new cars for 80-90%, but that's ridiculous. Why would I want to pay that much for something used when I can get the real thing for just a little more?

As long as the model is new, depreciation is slow, because people still want it. As it gets older, depreciation becomes faster, as people can still buy the new car for not much more. Once it becomes a previous model, if there's no sentiment attached to it (as in the case of the Civic SiR or Civic hatchback), it'll depreciate just as quickly as most other cars.

There's a base price below which working automobiles cannot fall. It's somewhere between 10-30k for really old cars, and about 50-100k for 80's and up cars. Once a car is past a certain age, resale value for running, restored vehicles starts going up because of the collectability factor... as long as the car is a collectable.

If you want to start citing Starlet and Trueno prices... don't. Starlet prices are varied, and it's at the age where depreciation doesn't mean anything, anymore, and Trueno pricing is merely due to the drifting fad.

You never cite the high price when you cite secondhand. There are lots of bright-eyed idealists who think they can sell at that price, and there may be one or two suckers who will go for it, but that's not representative. You take the median price as what fair market value may be. There are no hard rules on what fair market value is, though, as there is no local Blue Book, but gather enough statistics and you can make a fair guess.

Resale values are often misleading. You can be paying through the nose for other-people's-problems whether a car has high resale or not (personal experience of four overhauled Corollas and a few blown Civics attests to this...) And how much you can sell your personal car for depends on how much you actually use it (and, again, using it less means you're paying a ridiculous amount of money per kilometer even if you're saving on monthly expenses) and how much you spend maintaining it. So far, on my "American" car (which is actually Japanese... and from one of the supposedly "bleh" brands), I'm satisfied with how much I'm paying per kilometer (even including gas).

Of course, if your opinion is that "rah rah" Japanese uber alles, then I suggest you look at other Japanese cars.

Again... it's never an asset, always an expense. It's up to the owner how much he wants to spend and what he wants to spend it on. Paying an extra 100k up front for leather and a DVD player won't add much to the car's resale value, but damn if it doesn't make you happy while you have it.

If resale value is the number one consideration... buy secondhand, and buy an L300... preferably with no options on it. You'll still spend a ton of money on maintenance, diesel, tires and registration, but at least you won't lose that much in resale. I doubt you'll enjoy driving it, though...

[kimpOy]

wow niky... what an intensive research... sasagot sana ako kaso i run out of words.....

[redorange]

*Niky I couldn't have said it better myself.

If anyone buys a brand new car thinking you are going to resell it for a profit then you are in for a surprise.

[mike01]

i didn't say you will earn income or gain profit from buying a brand new car and selling it later.. what i'm saying is you keep as much of the original value of the car when you purchased it..


well i haven't really planned on buying brand new , kahit pa nga norkis legacy yan.. as for me, buying brand new is a status symbol.. its just not me... i prefer buying used cars than new..

[mike01]

i didn't say you will earn income or gain profit from buying a brand new car and selling it later.. what i'm saying is you keep as much of the original value of the car when you purchased it..


well i haven't really planned on buying brand new , kahit pa nga norkis legacy yan.. as for me, buying brand new is a status symbol.. its just not me... i prefer buying used cars than new..


115k lang ang budget ko sa kotse paano ako bibili ng brand new?

[mike01]

actually para dun sa thread starter.. kung sinabihan ka man nung mga kakilala mo na "bakit yan ang binili mo e mababa resale value nyan" e matipid at praktical lang sila sa pinaghirapang pera kaya ganun.. siguro mahirap lang sila kaya bawat sentimo bilang nila..

so lumilitaw nyan since sila e concerned sa resell value at ikaw e hindi..mas mayaman ka sa kanila.. so sila ang mas maliit at mas mababa sa yo.. kaya dapat masaya ka!

[niky]

Through financing, down-payment schemes, and the like. But of course, like we say here time and again, buy the simplest car you can get in the best condition, and save the rest of your money for contingencies.

Yes, you want to keep as much of the original value as possible, but the amount of the original value you will actually be able to keep over five years is as nothing to the cost of maintaining the vehicle and using it. Over 100k kilometers at five years, including the cost of the vehicle, you can spend around 1.5 million pesos total (not including emergency replacements and tires... tire and clutch wear are driver dependent) for a compact 2 liter (I computed it some time before)

For a sub-compact like the Vios or Getz, you will be spending between 650k to 750k total for five years of urban use (again, not including emergency replacements)... if you're assuming the Vios will lose less in resale, it'll still cost a bit more over those five years to run, or around the same if you assume it will need less emergency repairs.

But if you're buying via a 250k downpayment and assume the same interest rates for the remainder (standard bank rates are 13%), that, plus the lower cost of PMS (less fluids needed, cheaper parts for smaller car at the casa), will still make the cheaper car... errh... cheaper.

[laracroft]

actually para dun sa thread starter.. kung sinabihan ka man nung mga kakilala mo na "bakit yan ang binili mo e mababa resale value nyan" e matipid at praktical lang sila sa pinaghirapang pera kaya ganun.. siguro mahirap lang sila kaya bawat sentimo bilang nila..

so lumilitaw nyan since sila e concerned sa resell value at ikaw e hindi..mas mayaman ka sa kanila.. so sila ang mas maliit at mas mababa sa yo.. kaya dapat masaya ka!

aaaarrrrrgggghhhhh.
pahingi naman ng paracetamol.

[oldblue]

that is what i was telling.. people who buy high depreciation korean cars are richer , than people who buy japanese high resale car like corollas..

so in essence its the other way around.. mas lumilitaw na mas mayaman ka pag naka picanto ka kesa naka vios ka..

when i see people driving a corolla i see practical people, who value money..

somehow parang ok na din ang logic mo

at first, we bought a Korean car bec. we wanted to buy cheaper cars.

pero ang lumalabas mas MAYAMAN pa pala kami

can't wait to tell this to our neighbor who owns and brags a Nissan Murano

[MAXBUWAYA]

i think for him its about mayaman vs mahirap thing!


ARGH!

[LHV]

people who value their money do their research and math

eto kaunting basa lang
kung bibili ka ngayon ng top of the line sentra 1.6 AT P815,000
yung toyota 1.6 AT 854,000,

39K difference

lets look at a 5 year old sentra and corolla
2002 sentra 1.6 AT 350,000
2002 corolla 1.6 AT 400,000, meron pa ngang 375K hindi ka pa natawad niyan ha

kung i time deposit/invest mo kaya yung difference nila after 5 yrs, break even lang sa depreciation baka kumita ka pa, so driving experience na lang ang pinakamagandang gauge mo pagbili ng oto, yung nissan nga pala abs na tsaka leather seats yung corolla drum sa likod he he

dun sa thread starter kung binili mo yung best car para sa iyo hindi ka tatablan nung mga nangmamaliit sayo, ako I have a 92 car computed ko na cost of ownership ko on P/km basis kaya nangigiti na lang ako sa mga kasama kong engr dito na nag loan pa ng bagong car knowing na hindi naman nagkakalayo sweldo namin but their spending more just to get from A to B,

[nemo's friend]

Your replies are all correct. I hope that all people who have cars think the same way as you do. I don't really mind the resale value. Sana the next time I see someone I know hindi na sasabihin sakin. "BAKIT KIA BINILI MO. e ANG BABA NG RESALE VALUE NYAN."
I don't care. I Love my car.

naku, i remember my uncle in temecula when i visited them years ago. may bumisita sa house nila na pinoy din pero dun sa nakatira sa US for a long time ... nakita yung beat up chevy pick up at yung almost one year old camry. sabi ba naman "ay, bat yan ang binili mo ... dapat benz retired ka na naman, enjoy retirement etc etc ... tingnan mo ako, i drive a (benz model di ko kilala sorry). sabi ng uncle ko "ok lang pare, ako pumili nyan eh ... at saka fully paid na yang camry ko" ... natawa ako hehehe

to each his own - pera mo naman pinambili mo eh. these days, madami na din nag aabang ng good 2nd hand korean cars :-) i don't mind driving one