Miles and depreciation

bvhout · January 17, 2019

Hi

There are now 17 used LC 500 for sale on autotrader. I was interested in seeing what the depreciation would be as a function of the number of miles. The following graph results.

All 17 but one are for sale from Lexus dealers. What suprises me is the variability and the fact that there are at least four cars with less than 6,000 miles and more than 15,000 pounds in depreciation. It seems to me that the dealers are shooting themselves in the foot. By pricing the used cars so low they may be sold a lot quicker. But, I imagine that if you see these figures as a potential buyer, you would think twice about buying a new one.

Did they make the LC 500 too expensive from the start?

Ben

January 18, 2019

Is there any correlation with area of the country?

malcolmw · January 18, 2019

...or hybrid vs V8?

rayaans · January 18, 2019

Or condition of the car itself? and spec level?

Jules640 · January 18, 2019

I’m still lurking!

My hybrid is up for sale at a Lexus dealer for about £15,000 less than it was new in September 2017. It has done 7,500 miles.

Unfortunately I took quite a lot less when I sold it, although I’m sure they won’t get the asking price.

bvhout · January 19, 2019

Hi

In calculating the depreciation, I've taken account of whether the car had a sport pack or a sport plus pack and I've included the costs of the HUD and the updated stereo if present. I have no data about the condition of the cars, but I assume that's covered by the milage. There is also no correction for the location of the car although I may mention that the one limited edition that is for sale is in Belfast. It is for sale for £74,995 with 5,300 miles, a depreciation of £17,000 pounds (quite depressing for those who bought this limited edition, thinking that it would hold its value better.)

An updated graph (with one more car in it) is:

On the basis of the information one may estimate (by linear regerssion) that on average one looses about £5,000 pounds as soon as one leaves the courtyard, that one looses another £4,500 for each year the car gets older and that one looses about £ 1 per mile that one drives it. Others (Jules 640) may inform us about how much one looses op top of this by selling it.

Not good? I'm quite sure that the results would be a lot more depressing for the Mercedes S class coupe or a BMW 7 series. Or for owning horses.

Ben

Shaunomercy · January 19, 2019

I think another big factor with the LC is the luxury car road tax. I think it has increased the depreciation on luxury cars quite alot more and dealers are certainly having to factor this in when selling cars

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malcolmw · January 19, 2019

In common with a few of us on here, I have had quite a lot of high price cars and I reckon they all depreciate to about 50% of list price in 3 years. So, on say a £60K RX Premier you are taking a hit of £10K per year. This was the same on my X5s, Range Rovers and a little bit worse on my CL500 (but I purchased it at a big discount). This is the price you pay for being in this market.

Now, the "envy tax" VED is far worse on a car just over the £40K list. For example, an NX F-Sport is listed at just over this point if you specify metallic paint. On the V8 LC you have to factor in the £2000 first year VED for this "high pollution" vehicle. Anyone who has driven behind a black cab might find this a joke.

Shaunomercy · January 19, 2019

In common with a few of us on here, I have had quite a lot of high price cars and I reckon they all depreciate to about 50% of list price in 3 years. So, on say a £60K RX Premier you are taking a hit of £10K per year. This was the same on my X5s, Range Rovers and a little bit worse on my CL500 (but I purchased it at a big discount). This is the price you pay for being in this market.
Now, the "envy tax" VED is far worse on a car just over the £40K list. For example, an NX F-Sport is listed at just over this point if you specify metallic paint. On the V8 LC you have to factor in the £2000 first year VED for this "high pollution" vehicle. Anyone who has driven behind a black cab might find this a joke.

A high street retailer I used to carry for used to down plate their 44 Tonner's down to 28 or 31 ton... Result was roadtax for a 14litre truck running 24/7 was £250 quid a year !!!
Then they crucify cars and the luxury tax is just a further insult.

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pgn340r · June 24, 2019

Just spoke to my Lexus Dealer today. I have a LC500 Sport Plus V8 2018 with 3000 miles on the clock and was offered £61,000 in part exchange for a new one.

Thats a £30,000 drop in one year or 1/3rd of its new price!

Not sure if that is any worse than other premium makes but is goes to show you pay dearly for buying brand new.

Paul

Chammers · June 25, 2019

Why would you want a new one when the spec hasn't changed and you have done only 3K miles?

Malc · June 25, 2019

13 hours ago, pgn340r said:

drop in one year or 1/3rd of its new price!

I think you might find this is not too uncommon, and has been the case for many many years / decades on the vast majority of new cars and marques

the poor dealers and their staff have to live you know :whistling:

Malc

Farqui · June 25, 2019

The more expensive the vehicle then the higher the value of the % depreciation you loose just by driving it off the forecourt.

Generally speaking vehicles can loose up to 40% of the value in the first 12 months, it varies across different makes/models.

Personally that's too big a chunk of change that I couldn't justify 'loosing' these days.

Jules640 · June 26, 2019

I think the prices reflect that there is very little demand for the LC500.

I sold mine last December and it is still up for sale now at a Lexus main dealer six months later.

Farqui · June 26, 2019

Maybe, altho it's a very good looking car.

At least the UK road tax will be cheaper beyond the first year of ownership...checks www...£465 pa vs £2135 in yr1 :shock:

But I digress.

Jules640 · June 26, 2019

I agree. It is an amazing looking car but unfortunately the technology and performance don't live up to the looks.

pgn340r · June 26, 2019

I agree with all the comments. I think it is fair to that the UK Lexus does not have the image in the say way as the German or UK brands.

The build quality, fit and finish is second to none but most people in the bracket will buy BMW/Mercedes.

In the USA Lexus has a huge image, ( hence all the chrome bits) , just not here.

The only reason I was looking to trade was the salesman asked if I was interested in a new car and I was curious.

i love the car to bits especially the sound it makes and wholeheartedly glad I bought it and knew I would take a hit, just not that much.

All cars in this class take a hit but you can get Hugh discounts off list price, I could not obtain one on the LC500.

i bought my car on a PCP basis with a 3 year guaranteed value of £44,000 so on that basis I will be giving the car back I assume.

I am not complaining but it am finding it hard to justify £20,000 a year financing and depreciation costs. Buying nearly new is the way forward.

as an aside when I expressed these views to the sales person he said, I understand, but is a nice car just enjoy it!!!

RgrWynne · June 26, 2019

I think the salesman is right, and as you have the car, just enjoy. You are in a minority, and that costs, there is nothing you can change, and the envy of us all 😜. Happy motoring, Roger

wendle · June 27, 2019

16 hours ago, pgn340r said:

i bought my car on a PCP basis with a 3 year guaranteed value of £44,000 so on that basis I will be giving the car back I assume.

if the car is worth a lot less than £44 in three years but you want to keep it, give it back and then buy it back for less, that's what i may do.

Tel · June 30, 2019

Always remember the German Marques depreciation is based on their basic list price taking no account of their Factory Options that are almost worhless after registration.

Top Gear Magazine always test Top Spec BMs etc. but stopped publishing Depreciation Costs because they were dreadful .

Tel