Mercedes values dropping on their flagships ??

I have been looking at purchasing the Mercedes series CL and have watched where a few years ago dealers were getting above sticker. It is now apparent the values of these vehicles are dropping at an astronomical rate of depreciation. I certainly would expect a 10% to

20% drop in the first year of this vehicle but clearly this vehicle is losing this number (10% to 20% EVERY year) and in some instances greater. Looking in the So. Fla. area one can pick up relatively good discounts on very clean vehicles but they continue to plummet in value. I have asked several Mercedes dealers about the plummeting values on the CL series and they say all high end cars are going through this.

Any thoughts? Are the high end mercedes losing their value at rocket rates or is this systemic in the high end vehicle market?? What is going on?

Reply to
Ralph Sevinor
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The luxury market is very discretionary. The same thing is happening in the high end ($2 Million +) California real estate market - no buyers with bags of easily made money and those houses just sit. No one "needs" a Mercedes CL, or a $3 or $4 million home, - things bought with IPO proceeds etc.

Perhaps the Maybach has replaced the CL as Mercedes' "king of the hill" model and undercut the CL in the status game.

As a practical matter the increased technological content of all cars will obsolete them faster and so cause greater depreciation as the costs of keeping all this electronic stuff in an operational and reliable state get ever higher. Who wants to rely on a 15 or 20 year old airbag? The current models won't wear as well as the relatively simple 1980s diesels, for instance. And since all cars eventually depreciate to essentially parts or scrap value, the fall is simply getting higher.

Reply to
T.G. Lambach

I don't know about the US, but in western Europe expensive cars always depreciate quickly, Merc or not, because there is little demand for second-hand versions.

If you have the money you'll buy a new one. If not, you won't spend GBP 30

000 on a used fancy car, but maybe GBP 15 000 on a Merc diesel 2 litre slighty used...

DAS

Reply to
Dori A Schmetterling

What cars only depreciate only 10% in the first year? That is unrealistic.

The CL is a coupe and all coupes have a smaller market than a sedan available to them. Think accord sedan vs. the accord coupe . So the values are bound to reflect this.

Reply to
BS

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Actually, the above is not correct information. It was correct information regarding homes in the 2 million to 5 million dollar range in Silicon Valley until approximately 8 months ago. Certain areas, such as Beverly Hills, Malibu, Brentwook, Pacific Palisades in Southern California have been doing well throughout. Silicon Valley, which had the highest increase in home values, also took a hit in the 2 - 5 million range directly upon the advent of "dot.bomb" implosion.

However, with interest rates remaining so low, and with the scandals in mutual funds, and the fear generated by some 90% stock loss positions, a "flight to quality" has re-kindled residential real estate purchases in the past year. In addition to the sub $1,000,000 market continuing to show double digit increases (median price in the State now $404,000 I believe), the 2 million to 5 million market is now showing a reasonable level of sales again, as well.

Considering the fact that we have 60,000,000 vacant square feet of commercial real estate (my field) and lowering commercial rents, the residential and retail real estate markets have continued to do astoundingly well.

Whether a 3500 square foot house on 2/3rds of an acre should EVER sell for $3,000,000 is another question, but it is happening again.

I went to trade in my 99 S 420 with 57,000 miles on it, and got an initial offer of $22,000 from the dealer. It's not just the CL Class. The problem is that NEW cars aren't selling well due to the public's concern over their futures. The flagship cars rarely sell to the super rich, and they tend to keep them for a long period of time. It's guys like me who change their cars every couple of years into a new "work" car, who are buying the new "flagships", and we are watching the prices very carefully. Since the dealers are having trouble selling new cars, and even then, at reduced margins (hundreds above dealer invoice without holdbacks, and not at MSRP) they are making it up by not offering real money on the trade ins. Hence, people are selling their flagships themselves (Mine's for sale for $28,000) and Buyers who don't feel the need for the very latest and greatest are picking up wonderful deals.

If I can get a reasonable amount for my S420, I can pick up an Audi S-8 that sold for $80,000 in 2002 for $59,000 with 22,000 miles on it and a two year 100,000 mile warranty.

of keeping all this electronic stuff in an operational and reliable state get ever higher.

You may not be old enough to remember the days when we had to change the oil every 3,000 miles, and when replacing a "radiator core" was a 30,000 mile event, brakes at 15,000 miles, and "freon" every summer. Sometimes we under-rate the reliability of our modern cars.

On the other hand, my friends who have kept their 1993 S Class vehicles for

10-11 years, and have put 200,000 miles on them seem to feel that at least the W 140 and earlier S models pay for themselves many times over, IF YOU KEEP them long enough. I can't make myself do that, but those who can, get the value out of their cars.
Reply to
REInvestments

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