So why DO cars suffer such heavy depreciation the moment you drive them off the dealer lot?

So why DO cars suffer such heavy depreciation the moment you drive them off the dealer lot?

Is there any real reason for it, or is it completely arbitrary and made up by people at KBB/NADA to fuck with the market?

Because the market stresses that buying a brand new car is a good thing, and so no one wants to buy a slightly used car, and pay anywhere near its price.

Everyone wants to be the first to fart on the seat. Once someone's farted on the seat, the car looses half it's value. Common knowledge really...

The new prices are often too high. After first ownership, they fall to a level what they are worth. This first step has to be made, mostly by companies, banks or rich people.

It's a great thing, if you are not a financial retard.

If you buy a nice car, depreciation don't exist.
Do you think the guy with a first gen miata hasn't had it's money worth ?
Same with a classic challenger or 69 camaro really.

You just have to choose the good car. If you choose some shit like the ford fiesta, Civikmobile or any """"german engineering"""" meme car then prepare your anus.

Jews

>So why DO cars suffer such heavy depreciation the moment you drive them off the dealer lot?

You are confusing two different situations together. People who have your viewpoint look at the car's physical condition which is still "new". But KBB and NADA is not about the physical condition but about the market value condition.

Because you will be the first one to be inside her and gently rev her engine. (This is actually a lie, all the Chads from the dealers were inside her and revved her to redline at least twice by now.)

Also the actual cost of a new car is nowhere near what they ask at the stealership, even if you include warranty and free maintenance .

>is it completely arbitrary and made up by people at KBB/NADA to fuck with the market?
Yea totally the people at KBB/NADA control the market prices of automobiles...

It's because automobiles are a consumer good that sees heavy wear and a lot of repair, OP.

They don't immediately depreciate when you drive them off the lot, you just paid the dealership more than it was worth.

The dealership wouldn't make any money if they were selling the cars for what they are worth.

Well let me ask you this; if you had the chance to buy a brand new Shitbox3000 for $20,000, or one that someone had driven for 1000 miles for $500 less because, hey its "basically" brand new, would you not spend an extra $500 for an actual new car? Of course you would. Everyone with a right mind would. Which is why a car depreciates a lot when its no longer new. Its simply because no one would buy it without a hefty discount to sway them.

Well they do have to pay property taxes, shipping costs, shipping/handling taxes, operational costs, capital repair, employee wages, plus a whole host of other costs along the way. They would go out of business if they sold cars at the price the producer set, just as the producer would go out of business if it set the price of the car at cost of producing the car.

>everyone with a right mind would
Not necessarily. Someone might value that savings of $500 more than having essentially 0 miles on the clock. That person would probably have a low income though.

There's always threads up on Veeky Forums with someone asking a question like this, or why are all the used miatas too expensive, or hurr durr memetax why?

The answer is always supply and demand.

They are worth what someone is prepared to pay for them.

It's that simple.

The transport jockeys who drive the cars off ships and onto trains/trucks are the ones who usually get to fart on the seat first...

Shhhhhhh!

Ever heard about diamonds, OP? Sort of like that.

It's that fat autist smell. Never comes out.

But diamonds are forever.

Look, if you buy an Xbox, play it twice, then Craigslist it, you won't get new price. You won't get near new price, either. You'd be lucky to get 75% of what you paid, because it's used (even if only so slightly). Not much different with cars.

also if you finance with Zero down on tax and registration then get suckerd into extended warranties you are paying interest on those taxes. the moment you sign the contract you have agreed to pay that amount it shows when contract ends, roughly 10% then add your interest rate you just buried yourself with absolutly nothing to do with cars value

>why does anything I buy lose its value the moment I pay for it?

As for cars, They don't always.

There's a small market for people hoarding cars, not driving them, and selling them for 10-25% more 1-5 years down the road.

Dealerships mark up new cars because anyone who can afford a new car will pay a premium for it because they can afford it.
After a short while, the price drops to what the car is actually worth.
Three years later, the car's dropped in value enough to be damn good value.
After 15 years, the car's value is based entirely on whether or not it runs, and will pass mandatory inspections. If it fails an inspection, the price halves. If it stops running, the price halves again because the scrapyard has to come pick it up.

Look up Cox Automotive, or who owns KBB.

Then think about Cox cable, infrastructure, what they do/did, electric cars, and what they now own.

Leased electric cars using the power grid you own that change hands 10 times in their life make more money than the Volvo 240 or civic that sell once when new and once when worth 1500.

Their mission statement is changing the way the world buys sells and owns cars.

It's right fuckd.