How much should you factor in a depreciation projection when weighing purchase options?
Trying to decide between a used '16 or a new '17 Mustang GT (both in auto to improve re-sale chances - spare me the lecture) and have been running some numbers that suggest that due to the value of these cars settling/converging after a generation gap, buying the cheaper car at the moment (although it is used) will always work out better (since they will both become "old-gen" at the same time).
My question is - should the factors that a used car cannot provide (i.e., full warranty, ability to sell as the only owner, etc.) be given enough weight/importance to make me disregard the projected depreciation differences between the two cars?
what sorta faggot buys a car based solely on the resale value?
Buy a car cause you love it, you stupid cunt. Cost is irrelevant.
Eli Gonzalez
Ran some numbers on KBB and Edmunds and tried to "age" the cars (relying on the assumption that they will more or less age in the same way that previous model years have).
Year 2 projection is a data-point I'm throwing out because it involves a generation gap discrepancy where one of the "aged" cars is in a different generation from the other. As mentioned in OP, this is not possible in my situation.
As you can see, the 2017 wins in a "Year 4 projection" where you have two cars in the middle of previous generation and the relatively newer one has better sale values relative to current cost. But then afterwards the plateau re-asserts itself and the lower up-front cost of the older model wins in the Year 5 projection.
Owen Jones
Good color. You should get the manual with performance pack like I did
Ethan Clark
No I get how retarded this is - thing is that the two cars are kinda equivalent. No real big changes between '16 and '17. I love both cars. Hood scoops with turn signals on the '16 are the only difference.
I guess I was just wondering whether it ever makes sense to go with a new car if the pricing makes the depreciation relative to a used car fairly negligible.
Julian Martin
are u some fuckin nerd or something?
Benjamin Garcia
Nice blog posts, nice autism OP
You obviously can't really afford this car, which is why you are looking into selling the car only a few years after buying it before you've even owned it.
Buy a 2015 CPO Mustang GT, in manual. You are into the car for less to begin with, have the same warranty, and have to worry about resale less. Only thing is you don't get the turn signals in the hood vents standard like in the 16 and 17, but that's pretty gimmicky and dumb anyway. >in auto to improve re-sale chances What do you mean? Do you think you'll have a hard time selling the car in manual? Because that is incorrect.
Aaron Cook
People who are gonna be buying them in time are going to want the manual version because manuals are becoming more and more rare.
Michael Richardson
I love the manual but didn't really "miss" it in the automatic when I test drove both. Do you think it makes a huge difference in the long-term enjoy ability of the car?
I'm coming from a car I absolutely HATED and wanted to get rid of after every repair ('06 Audi A4 that I ended up sinking 8k of work/parts into over its 6k purchase price in under 2 years) so that's why this re-sale potential and depreciation projection is weighing so heavily on my mind. Perhaps these scenarios won't be playing in my mind if I like the car as much as I think I will.
Sexy car btw.
Yes.
I can afford the car - have the means to to pay it off within 8 months comfortably. Only reason I'm financing it is to build up credit.
See above for why I'm being such a retard about making sure I can get out at any point. I just fucking hated that car so much and kept taking hits on repairs (one after another expensive repairs) before I could actually get it sold.
I really haven't had a good experience with a car - trying to get one now but still have the weary mindset of driving shitty old expensive-to-fix cars.
>Do you think you'll have a hard time selling the car in manual? Because that is incorrect. >who are gonna be buying them in time are going to want the manual version because manuals are becoming more and more rare.
Interesting insights guys. Maybe I was overly swayed by the guy with the '16 auto who is trying to dissuade me from going with the manual for this reason. It makes sense to me theoretically, in that I don't know anyone who can drive manual.
But in view of this sort of consensus y'all have I'll have to reconsider. I do love manual!
Hudson Ortiz
>are going to want the manual version because manuals are becoming more and more rare still you're limiting the amount of people who will be able to buy it (your potential buyers). Also, auto adds value to a car
Nathaniel Clark
>Fag at work is the typical smartass giving opinions nobody asked for >"You car is nice but good luck reselling it. I wanna get a cheap Sentra because you can get cheap parts for it and it runs well" >Getting an old ass 2003 Sentra >Implying people buy car to last for 15 years
tl;dr: buy whatever the fuck you like, assuming you have the money.
Isaac Walker
>buy whatever the fuck you like, assuming you have the money. Thanks man, I will just do this. I am overthinking this like an idiot because I'm kinda traumatized by this fucking Audi that ruined my attitude towards cars. I had such love for my first car which was a Saab to the point where selling it would never even cross my mind.
I hope that the Mustang is going to make me feel the same way.
Fugg confused now. Veeky Forums please advice: manual or auto? Like I said earlier I love manual but didn't really feel like I missed it with the paddles on the auto. But that was just a test drive. I might go ahead and try them back to back to appreciate the differences.
Jacob Moore
For performance cars, the manuals are holding their value more. Compare prices of auto vs manual GTOs in 04-06, look at auto and manual CTS-Vs. If you are drag racing then auto is better, but for spirited driving the manual is still best.
Ayden Harris
I may be putting the cart before the horse but I am falling in love with the look of these with the side scoop and 1/4 window scoop. Is blogposting uncommon on Veeky Forums?
>performance pack Oh yeah, was meaning to ask about this. Do you feel like the driving experience is significantly improved by the pack beyond what you'd get for the money if you did it aftermarket yourself?
Brandon Martin
>Is blogposting about cars I don't own uncommon on Veeky Forums?
It happens too often
Jack Price
>drag racing then auto is better Yeah, this is what the dealer who had the 6.5k mile '16 for 27k was saying regarding why I shouldn't get the new '17 manual for 29k.
While I do like getting off the line fast, I don't need to be as perfect or whatever as the auto. Are the paddle shifters just not enjoyed by the average driver? I thought they were fine.
I have found though that every person with a Mustang or Camaro (nice ones too) I've met has an auto. But I trust you that they're value will hold - the dealerships probably know this.
Another thing the guy with the '16 said was that there is risk of burning out the clutch on the manual that is much less likely/possible on the auto transmission even with using paddles? Wasn't quite sure what the logic was.
I can't tell if he thinks I am going to be doing more sophisticated stuff than I actually am or whether it is a legit concern/reason to tend toward the auto.
>but for spirited driving the manual is still best Yeah, I agree. I found though that the GT had so much power at every rev-level. Like to the point I felt like I could probably do my entire commute without needing to ever go past 3rd. Does that make sense?
Although maybe it's different outside of the test drive where you are just having fun shifting based on the exhaust pitch and just relaxed.
My main generals/boards are all blogposting in one way or another so that's the only way I know how to do it.
Andrew King
Your spreadsheet looks overly optimistic. Did you consider the warranty expiration effect on resale? Do you consider time value of money, or a present value of your cash flows. Because depreciation is not an actual cash flow, and given it is not linear, your nominal figure (which you use to declare a winner) is not relevant unless you are considering selling the car in that year.
Cameron Adams
Just got this a week ago. 2015 Premium Package 5.0 V8 Manual 8.5k miles Bought it for 28,300 Just buy what you want OP. Who cares about depreciation. This thing is really fun to drive. Especially on windy California mountain roads.
Jace Rodriguez
>How much should you factor in a depreciation projection when weighing purchase options? I never have and never will worry about depreciation in my purchases. I bought a new vette in 2011 and paid 56k, it's worth 30k now.
Bentley Long
If you're that anal about depreciation just lease it
Tyler Richardson
>getting this autistic about it You're going to take a hit on everything outside of supercars, so just buy what you fucking like and enjoy driving it.
Nathaniel Gutierrez
>(both in auto to improve re-sale chances - spare me the lecture idiot moron it is widely known that manual versions of performance cars hold their value better
Hudson Wilson
>both in auto to improve re-sale chances Yeah totally, its so much cheaper to repair a broken clutch as opposed to a transmission lol
Nicholas Rodriguez
>Did you consider the warranty expiration effect on resale? Thank you - this is exactly what I was looking to hear about. I didn't consider this because I wasn't aware of how much this played a factor in the depreciation (hence the OP question about whether "factors that a used car cannot provide (i.e., full warranty, ability to sell as the only owner, etc.)" are important adjustments to the value factor or not).
On some level I was wondering whether the fact that KBB/Edmunds doesn't really consider remaining warranty term or provide an option for specifying it was relevant (i.e., if that omission means that it is irrelevant). Since your post suggests it IS relevant, I'll have to adjust the cost basis of the '16 GT with only 18/36 months of warranty to include an aftermarket warranty extension to really be comparing apples.
>your nominal figure is not relevant unless you are considering selling the car in that year. Good observation - I can appreciate the point. As mentioned in , I'm kind of hyper-sensitive regarding the ABILITY to sell the car at any given time due to coming from a car that has been bad to me and left a horrible taste in my mouth whenever I've tried to exit it (my delta from the KBB was low at the start but grew really quickly and was compounded by successive expensive part/system failures).
Also just to be clear, you're basically talking about a loss not being REALIZED until I sell the car in any given year, right? If we talked about car values in a similar way as stocks. In those same terms, I'd say I want to be long but have been conditioned to want to periodically set up stop losses for any future car because of my experience with the last car that started to free-fall in value really quickly/sharply with no plateau/support-level in sight. But that's what I get for fucking around with buying a 10 year old german car from an asshole who misrepresented its quality (and for not doing my own research to verify his story).
Lucas King
>This thing is really fun to drive. I need to remind myself of this and get out of this poverty mindset I've adopted. Sounds like you got a sweet deal - the premiums are really slick (as is your beautiful car :P).
>I never have and never will worry about depreciation >just buy what you fucking like and enjoy driving it. It is more about the experience for you guys - I hope to rediscover what it's like to have that feeling toward a car so none of this weighs on my mind after I buy it.
Oh I'm even more anal on not owning equity per se after making payments and potentially being fucked on the lease in the event of an adverse outcome (although I do know there is lease insurance to mitigate this very scenario) tanking the "residual". I'm working on getting over having an anal mindset - honest!
>widely known that manual versions of performance cars hold their value better I wasn't aware of this - thank you for the insight. I'm new to this world so I appreciate your help navigating the waters. I was probably being misled by the addition of auto transmission basically looking like a fixed-price "option" that was just added onto a base number in the KBB/Edmunds valuation, whereas the actual market value is not as simple to estimate/calculate.
Reading it in those terms makes the idea sound silly I agree lol. I do appreciate your insights. I think I'm seeing that the reasons I was told that an auto is better (centered around the concept that the auto transmission would be more resilient in a way) were being fed to me by someone who has a vested interested in shilling for the auto (the guy with the used one trying to sell it to me for 27k - ).
Josiah Cox
>Resale: The fact of the matter is, everyone can drive an auto, but not always a manual. Keeping that in mind, when you go to sell your Mustang, a wider range of people are able to purchase the car. That means higher demand, and higher demand means a higher price point.
Seems that the idea I had wasn't really unique to myself. Above is basically the idea that had lodged itself in my head. To everyone saying manual holds its value better, are you basically thinking that someone who's buying a used GT will tend to also be of the enthusiast category and will tend to know how to drive stick? As in, my target population of potential has a bias toward including more manual drivers (i.e. including a disproportionate number of manual owners relative to the proportion in the general population)?
If so, then I guess all the "pros" to having a manual listed in that same article would come into play.
Ryder Powell
In all my years of buying cars (admittedly outside of the US) i've always found manuals to be worth more and far more desirable than autos.
Henry Perry
Thanks for the insight. I'm looking into manual now. Doesn't take much to convince me to go manual but just want to make sure I'm doing my due diligence. Test driving auto and manual back-to-back will be helpful no doubt.
Seems like some people are attributing clunk sounds and/or jolts to a two piece drive shaft in the Mustangs. Is this pretty normal to the Mustang? Sounds like this might be what the guy selling me the auto '16 may have been referring to when talking about the "cons" of a manual...
Is it \an issue that needs to be corrected with a 1-piece drive train? Or do you just get used to it and/or compensate by doing something like revving the engine before releasing the clutch (recommended in the linked thread by some)?
and did you notice this at all?
Hunter Campbell
It really shouldn't be hard to determine if manuals do or do not hold their value better in your respective market, just compare the listings of older models currently on the market.
Here in Aus you will see a significant disparity in price between manuals and autos on enthusiast vehicles, i'd be amazed if the US was any different.
Bentley Moore
Good point - I have gotten too obsessed with these valuation guides like KBB/Edmunds and didn't really think to look at ACTUAL listings haha.
For now though I'm trying to follow this rabbit hole on the mustang forums regarding people having problems with their manual MT82 transmission so I can try and see if their problems manifest on my test drive later today.
This is the point of a lease. You agree to a depreciation curve up front, based on the manufacturers projections.
Alexander Wood
Are you buying it as an investment, or as a car?
Fucking seriously.
Blake Gutierrez
>no lease, I'm not renting a car!
Think of a lease like a balloon loan.
As far as not having equity, don't worry about that. You'll barely have equity anyway, if you finance with a low down payment.
You're probably the perfect candidate for a lease.
Go to a lease broker, that way you get the best deal possible.
Take the extra money you have every month my from a lower payment and invest it into something. Either something like a money market account or preferably $SPY.
You'll come out ahead and not have the liability incase even fords projected residual is wrong. It has happened.
Robert Gonzalez
Well I know buying a car as an investment is stupid but I want to have an idea of what I'm in store for in case of adverse events like medical emergencies or other unforseen circumstances that require me to get rid of it.
Basically I know that all cars are bad "stocks" but I want to pick the least bad one. Is that such a misguided notion?
>You agree to a depreciation curve up front, based on the manufacturers projections. That's a good way to look at it - I was at a point where I was wanting the dealer to agree to take in my car for a certain dollar amount within a few years assuming I hadn't driven it too much when it hit me that I basically want him to agree on a lease residual haha.
>You're probably the perfect candidate for a lease. Thank you - that all makes sense. I play stocks pretty heavily. Probably about 80k deep into some biotech stocks that I've researched the shit out of and I'm not buying the car outright just because it would be criminal to pull that money out right now (not because I'm at a loss but because the catalyst I want to hold through hasn't happened).
>lease broker I will look into this - I didn't realize this was a thing.
Thing is, does leasing it preclude you from doing modifications to exhaust? That's the one thing all my friends are saying is essential with a GT and I gotta admit that I do like the sound of the S-type/ATAK.
You've given me a lot to think about - thanks! I think doing a lease or just financing a new car and taking care of it (with modifications) will be what I settle on now that I've slept on it.
Allows me to keep growing my capital in my bio stocks to either get ready for the next car I want to lease or to pay off the principal on the car quicker.
Brayden Kelly
Buy a Corolla and Civic to keep for 10 years, and don't even bother calculating depreciation because it won't matter.
Joshua Ross
Stop calling cars "investments", this is shit you learn in Finance 101
Nicholas Foster
THIS.
Buying a car like this is an emotional decision.
If OP is so concerned about practicality, depreciation, value, economics, then he should buy a fucking used Toyota Camry.
Jaxson Lee
>buying cars as an investment is stupid >so i'm buying a car as an investment
Carson Young
that paintjob looks awfully familiar? is it from F&F1?
John Perry
> I wasn't aware of how much this played a factor in the depreciation
Yes, warranties do affect resale value significantly. Given that the warranty period is essentially a guarantee from the manufacturer to correct any defects that should not have left the factory, once the initial warranty expires, car prices drop significantly (This is very apparent in German cars). From a consumer standpoint you are now "on your own", and this riskier proposition drives down the price.
> you're basically talking about a loss not being REALIZED until I sell the car in any given year
Your stop loss analogy implies that you would sell a car if its resale dropped below a threshold, but you must also consider the remaining resource life of a vehicle. So consider the "fundamentals" of the car in how much usefulness you can get out of it rather than what the market's "emotional" valuation is.
David Harris
>in auto to improve re-sale chances
So you're not buying a car for yourself, but for the next owner?
Matthew Flores
My boy has the same V8 Manuel without the Performance pack and there is a lot more roll and mush. Also the brembos decrease 60-0 braking distance 10 feet which is big. My brakes don't even fit in his stock 18" wheels
Wyatt Ortiz
OK guys, I think I'm understanding the sort of mindset I have to come at this with. Just buy what I want, don't shy away from a manual, and don't overthink the depreciation.
Any ideas regarding the issues some people seem to be having with the manuals? Should I not bother unless I get the Performance Pack and/or upgrade to a one-piece drive shaft?
mustangforums.com/forum/5-0l-v8-technical-discussions/709819-clunk-noise-when-shifting-gears.html >there are too many parts between the engine and transmission that flex too much for the 400+BHP our Mustangs produce >In our Mustangs, too many of the bushings, mounts, etc, are just too damn soft and flex too much. That is clear in the Coyote Mustangs equipped with the MT82 transmissions. When you step on it, too much of the drive train flexes and twists completely out of position making for impossible shifts because the linkages, the engine, and the transmission are completely out of alignment. >Even in just plain DD, shifting clunks become pronounced even under moderate throttle applications.
Yeah, it's definitely an emotional decision but within that framework I guess I didn't see the harm of applying my autism to try and optimize the decision between similar cars.
Well I'm trying to pick the least bad option when viewed as an investment. If I had a car that lost 95% of its value in its first month, that would obviously be a worse decision than an equivalent car with the same emotional sway/allure that only lost 25% of its value in its first month.
Reminds me of pic related.
Damn, this hit me hard. Good way of putting it. Off to test drive the Manual and Auto back-to-back!
Jonathan Lee
>V8 Manuel without the Performance pack and there is a lot more roll and mush. Also the brembos decrease 60-0 braking distance 10 feet which is big. My brakes don't even fit in his stock 18" wheels Good to know - I will inquire about the PP when I head into the dealership in a bit. Did he (or you) experience any of the clunk/lockout issues mentioned in the quoted links mentioned here: ?
Thank you for the feedback.
Nolan Kelly
Never a lockout, but if you don't have momentum and try to shift you will hear a noise. It's not loud it's just from lack of momentum through the drivetrain. Doesn't put me off you will see when you drive one
