Seeing the Depreciation on Luxury Vehicles is...Depressing

Buying a car brand new is a great experience. You get a shiny new car that's the latest and greatest in tech and style in its segment. The interior is untouched, and the cabin is filled with that fresh never-sat-in leather smell. All those hard to reach cracks and crevasses are free of any sort of debris, and you have no doubts about the vehicle history since it's spent most of its early life on a car carrier and in a climate controlled garage waiting for someone to come by and fall in love with it enough to sign the dotted line. You leave the dealer confident and happy with the fact that you're the one that gets to put its first miles on the odometer and not have to worry about maintenance issues or costly repairs right off the bat, provided there are no massive recalls or anything like that. It's a great feeling, and it's one that really sells the position of "buying new". But, see, that's the thing. Buying a car new when you're budget conscious is something of a debate. 

Sure, you can pick up a brand New 2017 Honda Accord for right around $26k, which, for a new Accord, is a great deal. But you could also have a used one from that same generation for a few grand less if you're on the secondhand market. If you're smart when looking for a brand new car, you'll look for dealerships that are over-stocked and just itching to clear their lots of last year's models to make way for next year's lot. In that case, you can get away with saving over $12k off the market price of a brand new Corvette without even having to haggle, if you're thorough in your research. That's amazing for a Vette, especially in the 'new' car category. You'll see alot of this in the traditional car market for cars like Hondas or Kias. But the real hilarity here lies in the luxury second-hand market --cars like Mercedes, BMW, and even Chevrolet's Corvette, for example. In fact, all it takes is a simple search on a modern car shopping search engine which shows that you can pick up a modern second-hand luxury vehicle with low miles and even a remaining warranty for less than HALF of what they cost brand newjust a few short years back. 

Take a look at the Mercedes S Class, for example. Right now, a brand new S-Class S550 4matic, such as The one below will run you right around the $120,000 dollar mark to drive off the lot. 

Now, you're probably thinking "Christ that's insane!" And I'd agree with you, especially when you look on the secondhand market, and find that you can have this exact same car, albeit a couple of years old, for less than half of that. As per the example below. 

No, you aren't mis-reading that price. You can actually have this less-than-three-year-old S-CLASS S550 4matic for less than HALF of what it would have cost brand new. No, that price you see wasn't photo-shopped on there, and no, this car has no accident history. The same thing can be said for the Range Rover. 

As you can see in the image above, a brand new Range Rover with the Supercharged 5 Liter V8 is not cheap. At just shy of $135k, it's a car that is destined for some rich guy's car house in the hills. But, if we go onto the used car market, we can find the same car from the same generation, again, the difference only being milage, and a couple years in age, for about HALF of what it would cost brand new. 

So, you probably have a few questions at this point. One being: why are rich people so stupid with their money? and the more important over-all question: what gives? How does such a high-class luxo-barge like an S Class or Range Rover seem to lose so much value in such a short time? And why do those who are able to afford such cars decide that they don't want to save $40k on the car that they want to buy?

Well, there are a few answers here, but I think the best way to answer both of these questions, is that, well, simply put, these cars cater to a certain market niche. The clientele in that market are usually known for wanting "The best, and nothing less" which means if you were a car salesman and brought up the 'used' option, that would prompt the prospective S-Class buyer to deliver a very deserved slap to the face, followed by a snooty "How dare you". 

You see, unlike budget-conscious car buyers, the person who wants an S Class or a Range Rover is not known for enjoying "secondhand" things. That means that when they drop $120k on a brand new S Class or a Range Rover, it's because they don't want some other grimy peasant's arse to have occupied the driver's seat where they will be sitting. They don't want "yesterday's" tech, even if it's just a couple of years old and has remained unchanged in that time frame, and they don't want their car driven by anyone else except them or their chauffeur. In simplest terms, if it's not new, then it's not an option. 

So there you have it. If you ever find yourself looking for a great car at a bargain price, you might want to consider offerings from higher end brands, because you never know what kind of deal you might find. And in the end, it's not like anyone will be able to tell the difference unless you go with a previous generation model.