Top 5 cars that will make you money | Introducing the depreciation leaderboard

in this video I will show you which sports cars appreciate the least and how you can find the best deals at the bottom of the depreciation curve and that means that we if enough to do so let's start the video what's up YouTube and welcome to a new video now if this is your first time to the channel this channel is all about depreciation analysis for various cars now over the course of the last year I put out many videos analyzing many different cars I analyzed for example various Porsches BMW Corvettes and many more and that of course means that for all of the cars which I've analysed I gathered many statistics such as the depreciation per year the depreciation per thousand miles driven and the forecast values now man if you requested a comparison for all of those statistics and that is why I am presenting to you today and I hope I will remember to put some ruffles on the background here the depreciation leaderboard and should probably guess this leaderboard ranks the cars based on their depreciation per year and some other depreciation related metrics now in this video I will introduce you to the leaderboard the ranking and the different metrics and in the future videos I will rank each and every car then again on this leaderboard now in the leaderboard after following metrics included the average depreciation the depreciation in the first year the depreciation in the last year and the depreciation per thousand miles and for all of those I included that absolute and the relative number so it's easy to compare the cars finally then I also included a curvature measurement we chose to extend to which the depreciation curve of a car is completed but I will explain later in the video how that exactly works and how you can use it to your advantage now before we continue to the leaderboard please make sure to smash that like button as it really helps to support the channel I can't stress enough how important it is for the YouTube algorithm that you smash that like button now let's have a look to the first leaderboard which was the absolute average depreciation per year for a car at this point in time you can see now that I listed the different cars along the x-axis and that the depreciation per year is listed along the y axis if we dive down into the numbers we can see very clearly that the BMW i8 is leading the pack with an average depreciation per year of twenty four thousand four hundred fourteen dollars and we will see later in that this is so high for the i8 because death car loses a significant amount of its value in his first year if we go back to the graph tab but have a look to the other side then we can see that the Porsche Cayman 97 is depreciating the least with an average rate of thousand two hundred twenty one dollars now I'm not going to go through each and every car but please feel free to pause the video and have a closer look to the graph also remember that for each and every car which you see listed here there's a very detailed depreciation analysis on my channel so if you want more information about a particular car go to my channel and check out the video now many of you will probably recognize that the comparison which I just showed you it's not completely fair because it's namely a comparison of the absolute values and of course a car which costs two hundred thousand dollars is more likely to depreciate an average rate of twenty thousand dollars then the car which costs only fifty thousand dollars that's an also I made another leaderboard for the relative depreciation per year and that number is based on the average absolute depreciation per year divided by the average price point in the most recent model year and based on this relative average depreciation per year number we can expect to see that the new high-volume production cars are ranked at the top followed by the more rare cars and it's all the way to the bottom we'll find the oldest cars which are bottomed out if we have a look to the numbers then we can see that the rankings are quite different from the absolute depreciation numbers the Julie iqv ranks now first with an average depreciation rate of nineteen point six percent per year and the Ferrari 360 has the best rating of three point seven percent per year furthermore we can see that most newer cars depreciate an average between seven point five and fourteen percent now when we are looking to these numbers it is key that we keep in mind that these are averages if we for example look to the depreciation curve of the QV we can see that over three years the average depreciation rate is fifteen thousand four hundred twenty three dollars you can however see that the depreciation rate in the first year is a lot higher than this number and then it is a lot lower in the last year furthermore you need to keep in mind that the age plays a crucial role here the more model years are available to lower the average depreciation rate tends to be now I also constructed leaderboards for the first years depreciation the last year depreciation and the relative depreciation rates for both of them we will now have a quick look to those but after that we'll have a look to a very interesting measurement I think the curvature measurement now if we first have a look to the absolute depreciation in the first year we can see again that the ayat is leading the pack there's a Porsche Cayman 9 and 7 is doing the best in terms of depreciation in fact that this is highest drop in the first year for the i8 which is responsible for the highest absolute average ranking of the i8 if we look to the relative numbers then the graph looks a bit different and this relative number is again based on the absolute depreciation in the first year divided by the average price for the most recent model year and if you have a look to these numbers we can see that the i8 is still leading but it is followed by the f-type R and the Giulia QV there is far for happening something at least I think extremely interesting at the other end of the graph but let's have a look we can see namely here that the relative depreciation for a GT tree in its first year is extremely low and that is especially noteworthy if you consider it as one of the newest cars presented here let's also have a look now to the leaderboard for the depreciation in the last year of the depreciation graph of each car but I'm going to skip the absolute numbers and we will have a look immediately to the relative ones you can see now on the left-hand side that the Caymans are still depreciating significantly and that's also the depreciation rate on a Giulia QV is still high furthermore you can see on the right-hand side that some cars are entering the positive territory and this means that the average value of those cars in the last available model year so the oldest model year is higher than the average value in the second-last model year you can see for example that we have two r8 v10 here the V advantage a nine and seven turbo the r8 v8 and the Porsche Cayman nine eight seven now I can show you a zillion different rankings like those and a zillion different depreciation numbers but it starts to be a bit difficult to compare the cars after all if you made it till here in the video you're probably interested in depreciation numbers and you would like to find out if the car you would like to buy or perhaps the car you already own it's going to depreciate a lot or a little and that's why I came up with the curvature metric which measures the extent to which the depreciation curve of a car is completed and typically this value will be between zero 100 where zero means that there's absolutely no bottom yet in the depreciation curve and the depreciation curve in fact is still a straight line and hundred means that the depreciation curve is fully completed and that there's a bottom in the market note by the way that even though a car can have a score of 100 there might be still some significant depreciation in the newer model years if you namely imagine your typical depreciation curve which goes something like this that means that there can still be a lot of depreciation in the beginning of the curve but almost none at the end now in some cases it can even happen that the score will go above 100 and this means that the market is fully bottomed out and in addition to that you could start to see some increase in the prices now that sounds damn good if you ask me so let's have a look to the leaderboard if we look to the graph we can see that the left hand side is dominated by Portia's and that these have a completion rate between 0 and 20% and note that this doesn't say anything about the height of the depreciation rate it simply says the extent to which there's a bottoming pattern in the market the relative depreciation rate for julia's for example higher than this predicaments but the market for the julia has more buttoned as we can see in the graph over here we can see namely that the completion rate of the depreciation curve is around 60% where it is more around 20% for the Caymans now if we start to go down a bit more to the right of the graph then we can see that we encountered the more older cars which of course have a stronger bottoming pattern energy depreciation curve you can even see that the v8 Vantage the turbo the r8 v8 and the Cayman 9 and 7 cross the bottom and threshold of 100% in other words we can be quite certain that for those cars the depreciation rate is completed now this of course doesn't mean an Accounts Trust is enough that you can buy any of those cars and expect no depreciation you namely first need to find out where the car which you are interested in false on this depreciation curve and therefore if you will use this metric in combination with the actual depreciation curve of a car you'll find out if there's a bottom in the depreciation curve and where you should buy on the depreciation curve and personally I think that this combination will help you to fight a good deal in the market but also to figure out if the timings actually right purely looking from a depreciation perspective if you would namely like to buy a car at the end of its depreciation curve which also has a curvature metric very close to 100% this namely means two things first you are buying in a market which is actually very close to bottoming and completing the depreciation curve and second you're buying at the right part of the depreciation curve namely at the end where the depreciation curve is actually bottoming note by the way that this approach works very well in the markets where the prices tend to decrease when the car gets older it works and also less good for car markets which are already in a bottoming phase for a while so that's only the end of the depreciation curve is left for these cars such as for example the Ferrari 360 the depreciation line is namely completely horizontal you can then also see from the graph that there is no bottoming pattern in the market simply because the depreciation curve or actually depreciation line is horizontal now then you might think they're four-wheel trader those are a lot of nice numbers but I would like to know which car markets are as of today in a favorable situation for me where can I find the cars which depreciate the list and that's of course a very good and a very valid question to ask and I also still need to do some work on this myself but let me show you quickly what I already gathered at the graph on your screen you can see now H on the horizontal axis and the curvature metric on the vertical axis furthermore you can see that there are several blue dots and each of these blue dots represents a car market one dot is for example the r8 v8 market and one dot is the market for the Porsche Caymans now I should probably expect it we can see that there is a very strong relationship between the age of your car market and the extent to which the depreciation curve is bottomed what is however quite encouraging I think is that from as early as five years car markers can already have a strong bottoming pattern and this of course means that you can drive a relatively new car without losing too much on it and as I said this is still a work in progress so you will see more about this in the future now I also made all of the numbers which you saw on this video but then for the depreciation per thousand miles driven I think whoever that is a bit too much to cover all in this video in line with that I think that overall it would be nice to have one ranking which combines two deep thousand miles driven and the depreciation per year just to keep things simple but also that is still a work in progress as I still need to find out and think a little bit how I'm going to combine all of the rankings into one overall ranking in any case remember that if you saw a car in this video of which you would like to see the full depreciation analysis that you can find that analysis on my channel and while you're at it make sure to smash the subscribe button as there will come new depreciation analysis each week and each car will be ranked in this leaderboard as always a huge thank you for watching and I see you next week for a new depreciation analysis

Channel: Fourwheel Trader - Car depreciation analysis

Views: 68,068

Keywords: car depreciation, car depreciation explained, least depreciating cars, top 5 car money pits, car hacking, depreciation data, worst depreciating cars, car investment, cars which will go up in value, depreciation formula, fourwheel trader, exotic car hacking, sport car depreciation, best value sport car, worst value sport car, how to find best value car, best cars to buy, cars that dont lose value, make money flipping cars

Id: db-oce6isoI

Length: 11min 52sec (712 seconds)

Published: Sat Jan 25 2020