My Mache is down to 32%

[DennisD]

Just a guess, but it’s if you buy a different car you expect to have less depreciation.

Just like the stock market, sometimes you should sell a loser before it drops more.

The timing in this case is all relative. Yes our resale sucks, but currently new car prices are low too. When our resale was awesome, new car prices were high.

That said, I hate any investment analogies for cars as many have said, they aren’t investments, but some of the money concepts do apply.

I am not implying that it would be a good investment but rather not take a sure bath. The depreciation takes the biggest hit when driving it off the lot and it starts to level out after about 3 years (on average) While it still does depreciate after 3 years, the percentage of losing money goes down as well. If someone gives advice of purchasing another new car to unload a fairly new car (within 3 years old) is maybe the poorest advice that I can see to do with your money (from a financial standpoint).

Now if you use if for a business and you factor in break downs (which could cost you money time wise) then go for it. If you are an average consumer I would never ever give advice to sell it while you are underwater. That is the main problem with this Country IMHO. Too many people making poor decisions.

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[933233311602]

I am sure everyone is aware that Ford dropped MachE prices and has 0% financing, what a deal!

EXCEPT…

I got my MachE (2021 Select RWD) appraised to trade up to 2023 GT.

$16,000!

I have had it almost 2 and 1/2 years, and it’s only worth 32% of original price, WOW!

So what? Who cares?

If you wanted a Ford investment, you would have bought their shares, not a car.

A car is a purchase for a purpose. Is it fulfilling that purpose? Then move on. You're behaving exactly the way the company marketing has trained you to behave; acting as if you must buy next-year's model and are staring at the "trade in value" of your current car as if it's law that you can't just keep using it.

 

[txaggies07]

The same thing causing that GTPE to look attractive is causing your current car to be valued lower. Also, in your 32% calculation, did you do that before or after the tax credit?

 

[Phil Martin]

Since you don’t own one, I don’t blame you for not knowing the details of our depreciation over the last few years.

My car- 2021 GTPE loaded, bought October 2021.

Paid $65k (with tax after tax credit)

In 2022- worth $70k+
in 2023- worth $40k
Now- $30k

Nothing about that is normal. Cars don’t get their values cut in half during year 2 of ownership normally. We went from one of the best resale values on the market to one of the worst.

Just some context- I spent 8 years of my career doing automotive advertising for local car dealers. I was literally putting the pricing in their weekly ads. To say I understood and followed new and used car pricing is an understatement.

Sure they do. Prior to 2009 recession, annual depreciation was about 17%. Six years afterwards two year old vehicles were averaging 52% declines from MSRP, this was due to longer loan terms and incentives. This is no different then that with all the new incentives on new electric vehicles. Again, the Mache isn't special in regards to this.

 

[Mach1E]

Sure they do. Prior to 2009 recession, annual depreciation was about 17%. Six years afterwards two year old vehicles were averaging 52% declines from MSRP, this was due to longer loan terms and incentives. This is no different then that with all the new incentives on new electric vehicles. Again, the Mache isn't special in regards to this.

Except that cars weren’t selling for anything near MSRP in 2015 and followed more of a straight line depreciation in the first couple years.

This is different.

Our cars went UP in value the first year and completely tanked year 2. Not normal!

Now are other cars that were purchased in 2021 having similar issues? Absolutely.

But again, this is nothing like 2009, 2015 or any other time period in history.

2021 to 2022 you get stories like this:
Used car prices rise by a record setting 40.5% year over year-
https://www.usatoday.com/story/money/cars/2022/02/13/used-cars-cost-more/6778705001/

2023 we get-
Largest decline in car prices on record-
https://www.fleetnews.co.uk/news/largest-drop-on-record-decline-in-used-car-values-continues

https://finance.yahoo.com/news/used...a-record-for-the-month-of-june-203537445.html

So we set a RECORD for the largest increase followed by a RECORD for the largest drop.

By definition, a record has never happened before. ?‍

 

[AngryMan]

Not sure if I am understanding your logic with #2

If you are "underwater", why in the heck would you take a sure loss and then purchase another depreciating car?

Kind of like the Stock Market, you neither gain or lose until you sell it. If you are truly underwater, I would suggest keeping it and averaging the years out to take less of a hit.

My 21 was losing $1200 a month on average . Another month of that and I would've been upside down/under water take yer pick . Got out of that loan and into a 23 GT for $42000. MSRP is $52000+. 2024s will have a higher MSRP so I should be good plus I got the car I really wanted but couldn't get 3 years ago. It won't make sense for all but for some it's the deal of a lifetime. I actually paid less for 2 models up than I did 3 years ago for the lowest trim .

 

[Fat Mach]

Except that cars weren’t selling for anything near MSRP in 2015 and followed more of a straight line depreciation in the first couple years.

This is different.

Our cars went UP in value the first year and completely tanked year 2. Not normal!

Now are other cars that were purchased in 2021 having similar issues? Absolutely.

But again, this is nothing like 2009, 2015 or any other time period in history.

2021 to 2022 you get stories like this:
Used car prices rise by a record setting 40.5% year over year-
https://www.usatoday.com/story/money/cars/2022/02/13/used-cars-cost-more/6778705001/

2023 we get-
Largest decline in car prices on record-
https://www.fleetnews.co.uk/news/largest-drop-on-record-decline-in-used-car-values-continues

https://finance.yahoo.com/news/used...a-record-for-the-month-of-june-203537445.html

So we set a RECORD for the largest increase followed by a RECORD for the largest drop.

By definition, a record has never happened before. ?‍

EV's are definitely in a league of their own though. If you look at the values of 2021 GT500's, they are holding their value much better.

 

[DennisD]

My 21 was losing $1200 a month on average . Another month of that and I would've been upside down/under water take yer pick . Got out of that loan and into a 23 GT for $42000. MSRP is $52000+. 2024s will have a higher MSRP so I should be good plus I got the car I really wanted but couldn't get 3 years ago. It won't make sense for all but for some it's the deal of a lifetime. I actually paid less for 2 models up than I did 3 years ago for the lowest trim .

You essentially traded an older car (that has depreciated in your words) 32%. If you do the math, you only had 68% to go before reaching zero. It will not go to zero btw.

If your car was in a bad wreck and they "totaled" it, you would still get a fair amount of value in your car. I would guess at least 100 + % of what you got from the dealership and you could always purchase another one.

Now using the math of depreciation, (in worst case scenario) if you drove it for 10 more years, you could get 10% back out of your car. Essentially losing 58% more. But that is dividing it by 10 years rather than 3 years.

You then purchased a newer car with a higher price tag that will drop (in it's current form) MORE than the car you just traded in. Yes, in your eyes you got a "good" deal but that is what they are now bringing so you essentially are going sideways on the scale with a high likely hood that it will also do a nosedive when the next generation comes around in a couple of years.

The car you just purchased (in the eyes of the general population) is essentially the same car with a higher price tag that will/is depreciating on a daily basis as well.

Now, if you would have unloaded this car and not purchased another one, that is a whole other debate.

You are going down a rat hole with the go pedal floored from a financial standpoint from where I am sitting.

Whatever you had in your 21, the $1,200 value drop had a floor. In other words, it would have stopped dropping in value once you reached zero. Your newer one is also on a fast track of depreciation unless something changes with the sales of these but I am not holding my breath. It is essentially on the same slope.

If you could do us a favor and in 3 years give us an update of what the value drop on your current car will be in relation to your 21, (will it also be 32% down) that would tell you whether I am correct or you are correct.

Sound fair?

Also, if you are borrowing the full amount of what you paid for the car, you should think of purchasing a lower priced car for your next purchase. Interest and depreciation is what gets people in trouble more times than not.

 

[Mach1E]

You essentially traded an older car (that has depreciated in your words) 32%. If you do the math, you only had 68% to go before reaching zero. It will not go to zero btw.

If your car was in a bad wreck and they "totaled" it, you would still get a fair amount of value in your car. I would guess at least 100 + % of what you got from the dealership and you could always purchase another one.

Now using the math of depreciation, (in worst case scenario) if you drove it for 10 more years, you could get 10% back out of your car. Essentially losing 58% more. But that is dividing it by 10 years rather than 3 years.

You then purchased a newer car with a higher price tag that will drop (in it's current form) MORE than the car you just traded in. Yes, in your eyes you got a "good" deal but that is what they are now bringing so you essentially are going sideways on the scale with a high likely hood that it will also do a nosedive when the next generation comes around in a couple of years.

The car you just purchased (in the eyes of the general population) is essentially the same car with a higher price tag that will/is depreciating on a daily basis as well.

Now, if you would have unloaded this car and not purchased another one, that is a whole other debate.

You are going down a rat hole with the go pedal floored from a financial standpoint from where I am sitting.

Whatever you had in your 21, the $1,200 value drop had a floor. In other words, it would have stopped dropping in value once you reached zero. Your newer one is also on a fast track of depreciation unless something changes with the sales of these but I am not holding my breath. It is essentially on the same slope.

If you could do us a favor and in 3 years give us an update of what the value drop on your current car will be in relation to your 21, (will it also be 32% down) that would tell you whether I am correct or you are correct.

Sound fair?

Also, if you are borrowing the full amount of what you paid for the car, you should think of purchasing a lower priced car for your next purchase. Interest and depreciation is what gets people in trouble more times than not.

For sure the math isn’t in his favor.

But now he has a newer car and a GT at an excellent price instead of a 21 SR select.

It won’t save him any money, but still seems worth the extra expense.

 

[DennisD]

For sure the math isn’t in his favor.

But now he has a newer car and a GT at an excellent price instead of a 21 SR select.

It won’t save him any money, but still seems worth the extra expense.

Fair enough but and this is a big BUT, one can't always afford to drive the one they really want. Many people do this with houses, cars, electronics etc. They see the latest and greatest and they place zero money down and complain that things are too high and they can't afford the essentials (food etc.)

I have no skin in this game but rather try to offer suggestions. I try to resist making impulse purchases and wait for the right time to purchase big ticket items.

Many on this forum thought they were investing their money wisely when they bought their car but I looked at more as a novelty item. Did I need it? No Did I want it? Yes

I borrowed no money to purchase it and I was treating myself for the years that I resisted making foolish purchases in my past. My reward to me.

I am not in a position to suggest that I made a "wise purchase" but I know enough not to throw good money into another poor "investment".

 

[ThatGuyLando]

I'll give you 16,001 for it.

 

[Fat Mach]

Fair enough but and this is a big BUT, one can't always afford to drive the one they really want. Many people do this with houses, cars, electronics etc. They see the latest and greatest and they place zero money down and complain that things are too high and they can't afford the essentials (food etc.)

I have no skin in this game but rather try to offer suggestions. I try to resist making impulse purchases and wait for the right time to purchase big ticket items.

Many on this forum thought they were investing their money wisely when they bought their car but I looked at more as a novelty item. Did I need it? No Did I want it? Yes

I borrowed no money to purchase it and I was treating myself for the years that I resisted making foolish purchases in my past. My reward to me.

I am not in a position to suggest that I made a "wise purchase" but I know enough not to throw good money into another poor "investment".

I was in lock step with you until you said you borrowed no money to purchase it. I borrowed all the money to purchase it and doubled that money in the stock market, while paying 2% on the car- because I waited for the right time to purchase, or at least got lucky!

 

[DennisD]

I was in lock step with you until you said you borrowed no money to purchase it. I borrowed all the money to purchase it and doubled that money in the stock market, while paying 2% on the car- because I waited for the right time to purchase, or at least got lucky!

If you have cash on hand, you are good.
Yes, you were "lucky". ?

 

[AngryMan]

Depreciation in first 2 years was $6000. Since 1/1/23 it dropped $19000+ . Normal depreciation and you keep the car . THIS big of a hit and you RUN AWAY .
IF I totaled that car in a few months I would've received a payout that was less than the remaining payments due because of "fair value" Id have no car and still need to pony up cash to get out of that ride/loan .
I basically"converted" my loan to a 3 years lease and dumped the car at the end of the 3 years .
No money due on the old one and no money down on the new GT .

 

[Fat Mach]

If you have cash on hand, you are good.
Yes, you were "lucky". ?

I don't keep a lot of cash on hand, but I work at LRCX and now have a lot of stock I can liquidate if needed. I think the lucky part was getting a car loan at 2% right before rates took off.

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