Big Engine? Small Value!
17 May, 2006
4 Comments 
Drive.com.au has posted a rather interesting article about the huge lumps of money people are flushing down the toilet in buying new Falcons and Commodores. Up to 35% of the purchase price of a family car could be lost within the first 12 months! (According to GlassGuide). I personally don’t have the biggest faith in Glass Guide, but I do hold lots of trust for Redbook.com.au. So I thought I would do a check. Here is what Redbook thinks:
|
Purchased Price |
Current Price |
|
|
2005 Holden Commodore |
$33,650 |
$19,200< ->$22,400 |
|
2005 Ford Falcon |
$34,555 |
$18,500< ->21,600 |
Hmm doesn’t look good at all! There is a whopping 33% depreciation (at best) for the Commodore and an even more unbelievable depreciation of 37% (at best) for the Ford Falcon. It can run up to 46% if you KMs are high! That is truly unbelievable! So what is the big deal! Why the massive depreciation? Fuel of course! Who wants to buy a 6 cylinder car these days? Hardly anyone. I have been trying to sell my Falcon for the last 6 months. Not even the dealers want it anymore.
CarAdvice’s tip of the day: Don’t buy a 6 Cylinder Car!
What should you buy instead? Something that won’t nearly halve in value in a matter of 12 months? What about small cars? Drive.com.au’s article mentions that the 2005 Honda Civic Hybrid only lost 12% of its value in the same 12 months, and RedBook notes that the 2006 Toyota Prius lost 20% of its value, which is somewhat higher than what I can see people selling their Pruis’ for online.
Since fuel prices don’t seem to be going down at all; usually what seems to be the case is they go up dramatically in a matter of 2 to 3 weeks and then ease down just a little bit so we think its okay. You would think you would be safe in buying a car that runs on the smell of an oily rag. But lets be serious here, who wants to drive around in a 1.3L (or even 1.5L) engined car? Not me. Besides, those cars don’t exactly keep much of their value to begin with, and even more importantly, as I mentioned in the Holden Barina - Safe as a cardboard box article, the depreciation of safer cars is a write off against the value of your own life. However I am not trying to encourage you to go out and buy a Toyota Landcruiser (~20% depreciation in 12 months) but maybe instead of spending ~35g on a brand new Falcon and losing 15g in the first 12 months (that’s more than $1,000 a month in depreciation) try looking at cars that are one or two years old. Not only will you be the one saving $15,000 but the difference between the 06 and 05 model is hardly noticeable for the Falcon and Commodores.
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July 31st, 2006 at 10:28 am
[…] If you have been on this website long enough you might remember an article I posted sometime ago about the depriciation of Australian family cars. NRMA president Alan Evans said petrol prices, which have risen from an average of 108 cents per litre in June 2005 last year to 137.5 in June 2006, are the main reason for the increase in running costs. “These figures are staggering, families that run popular six cylinder family vehicles like the Holden Commodore, Ford Falcon, Subaru Liberty and Toyota Camry are spending on average over $55 per week on fuel - due to the near 30 cent per litre increase in fuel over one year.” Mr Evans said. […]
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November 10th, 2006 at 12:14 pm
[…] Well my friends, you should read about the depreciation of Australian vehicles. Whilst you save a few thousand dollars to begin with, the value of your beloved Commodore or Falcon depreciates so much in the first few years that you would have really been better of with the Honda or Subaru. What about the Aurion? Hows does that fare when it comes to depreciation? No one really knows yet, but if we look at the Toyota Camry, a base model 2005 Toyota Camry Altise Sedan (4dr Man 5sp 2.4i) has dropped around $7,000 of its value in just a year! Off course you have to take account the introduction of the new Camry this year, but nonetheless its not good! If you think about, $7000 in a year works out to nearly $20/day in depreciation! […]
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November 23rd, 2007 at 11:05 pm
Easy answer. Don’t buy new cars. Here in the UK you can buy a delivery mileage car discounted as its pre-registered for a 20-25% saving on new. How do the manufacturers do it…by ripping the new car buyers off..
Oh and by the way our (UK) depreciation figures are worse than yours. How about an Audi A6 $65K new, after 3 years £21K.
Have a look for yourselves www.autotrader.co.uk
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