should we be concerned about depreciation?

[Juzam Djinn]

guys ive been having problems wanting a car and when i have dat car m afraid of depreciation that even if its set up i wouldnt be able to sell it at the price that i got it. even if its less than a hunred thousand its ok. what is the remedy or this? what is the truth about depreciation?

[alwayz_yummy]

what is the remedy or this?

simple:

get a TIME DEPOSIT OR T-BILLS! bumili ka ng prime location na condo or lot!

what is the truth about depreciation?

siyempre ginagamit kaya kaya nagdedepreciate. simple economics!

[Alpha_One]

siyempre ginagamit kaya kaya nagdedepreciate. simple economics!

A better explanation would be that people don't want a used car as much as they want a new one. If people don't want something, demand drops, ceteris paribus, and the value drops too.

A car's actually a pretty bad investment. Don't expect much on the value of the car, unless it's a classic or a fad car if you're in the States (New Beetle, New Mini, Toyota Prius et al). Returns on investments on vehicles (machines in general actually) come from their output/productivity, and not the market value of the thing itself.

[OTEP]

If you don't like depreciation, buy a used car. You can sell it the next day for even a higher price (if you're a good salesman).

I was asking my dad a few months ago if my commander's brother should buy a W123 Mercedes being sold to him for Php135k. Not having seen the vehicle, my dad just said buy it and if it's no good, just sell it for Php155k in a month or two.

Loan problems hampered the purchase. The Benz was eventually sold by the seller at Php155k (his asking price).

Cars make lousy investments. Either you buy a used one or maintain it very well (long service life) so you don't get hit by depreciation so much.

About the only vehicles that don't change prices in the local market are Land Cruisers and Land Rovers. A '97 Land Cruiser 80 is still doing Php1M on the market today. A '97 Land Rover Defender is around that price also.

[Chip]

agree with all the above. if you dont like depreciation, get a used car. The first owner takes majority of the brunt with depreciation.

now ask yourself, why do you want the car?

If its something to get you from point A to point B, then buy the cheapest yet still well maintained car out there. take into account total cost of ownership. baka nga cheap yung car pero parts are hella expensive plus malakas pa sa gas.

If the car is something you really fancy, like an old classic that you don't see yourself letting go of in the near future, then go for it. passion will beat depreciation hehe

If you are looking for an investment, forget it. Nobody can predict which cars will hold their value over time. Forget all the sales talk people say about cars being an investment, they are not. They are a liability.

[theveed]

A car is an expense, not an investment.

As with any expense, you shouldn't be fussing about depreciation, only resale value.

Like what Chip said, unless you're getting an exotic or rare vehicle, cars are just utilities, technically.

[reniram]

If the car is something you really fancy, like an old classic that you don't see yourself letting go of in the near future, then go for it. passion will beat depreciation hehe

If you are looking for an investment, forget it. Nobody can predict which cars will hold their value over time. Forget all the sales talk people say about cars being an investment, they are not. They are a liability.

I like this! This is one good comment.... Nice statement dude.

[badkuk]

the sad truth is, di ka pa nakakasakay sa bagong bili mong kotse, nagdedepreciate na yan B) not really sure if there's anything you can do about it, that's the nature of things. kaya ako, ilang taon na akong atat na atat bumili ng kotse, kahit used, di ako makabili. why? kasi kuripot, este, wise ako sa money ko B)


pwera na lang siguro kung collector's item ung nabili mong kotse, look somewhere else to preserve/increase the value of your money(property, investments, etc.)

[alwayz_yummy]

sorry kung harsh post ko.. pero un ang simple truth nun.

ako, may 400K dito, binigay sa akin para pambili ng spacegear...pero eto, naka time-deposit pera para kumita muna, at baka gamitin ko nalang sa business... may liteace pa naman ako,e..

[n2knee]

guys ive been having problems wanting a car and when i have dat car m afraid of depreciation that even if its set up i wouldnt be able to sell it at the price that i got it. even if its less than a hunred thousand its ok. what is the remedy or this? what is the truth about depreciation?

like everyone says, a car is not a good investment. with the exception of classic cars don't expect it to hold its value in the long term. brand new cars have the highest depreciation rates in the first two years, so if you are concrened about depreciation buy a slightly used one. now if you are using your car for business is another matter. in this scenario you can either make a profit or a loss when the time comes to dispose the car.

someone had mentioned that the usage (mileage or km) dictates the value of the car. that is true. and it is also true that the demand dictates the value of the vehicle. it is called the law of supply and demand. one good example about this is the MKIV Supra. a ten year old supra in good condition still commands top dollar. it was $50k brand new. 1994-1998 TT Supra (stock and unmolested) in good condition is still worth $35k to $45 today. even though the insurance companies tend to disagree (it is 50% lesser in their appraisal software), there are still people who are willing to pay top dollar for a car such as the TT Supra, because it is rare.

finally, and i'd like to emphasize this one. any car is only worth what someone is willing to pay for it, so use the car value guides on the internet or book as reference only, but those are not absolute values. if someone is willing to pay more for a car, which has a lesser market value per the various reference guides then the amount of money exchanged is the true value of the vehicle.