Why Do BMW Depreciate So Much?

so you're in the market for a used BMW but you wonder why these cars depreciate so fast I'm going to explain it to you now welcome back to the channel I'm your buddy mark with exotic car play place and today so we talked about BMWs and a lot of other premium German brands and we wonder why we see a lot of cars like this going on the used car market for supremely cheap dollars and you have to ask yourself why is the depreciation so aggressive on those cars look at the BMW world when I peruse the autotrader.com site it doesn't take long to find tens of thousands of used BMWs on the market for sale any given day and a lot of that has to do with several things one of them being of course there's just such a supply and not enough demand there aren't enough people buying these cars so you have to present good quality well-maintained cars to begin with just to be competitive the other factor is over 50% of the BMWs and Mercedes Audi's are leased more than 50 percent so after three years of lease when the lease is up ultimately wind up with an owner who decides to sell the car off get rid of it let it go because they realize after lease is up and after warranty's expired they often might be faced with a lot of reliability issues replacement parts and maintenance associated with a hundred and fifty thousand dollar car to be in line and commensurate of that type of car you would expect a large dollar amount to buy a part why well part of it because they're built in lower production part of it because a lot of these parts are shipped from Germany that costs you money yeah maybe it's just a mirror maybe it's just an oil filter but those parts often are shipped overseas via boat plane whatever it is that cost money the shipping cost money sure some of those parts are higher quality but unfortunately it's the shipping that kills you there the other thing is did you realize statistically 35% is law on depreciation on your average used car or new to used car well German cars are tend to be a little higher because it's a luxury item and because it's a luxury item it's not unbasic necessity of life and as such a hundred and fifty thousand dollar car is going to lose more than thirty five percent on average then a twenty thousand dollar Honda so they talk about percentage depreciation sure the Honda comes out looking rosy but in reality it's the initial cost of that car when it was purchased and sold new another reason why these BMWs depreciate so hard is because the cost the cost associated with all this maintenance in parts isn't just because of the parts it's because of the specialists the technicians have you ever been to a local BMW dealership lately have you not noticed those gentlemen walking around in white lab coats and their four booklets and they walk along like a scientist there's a personification that they have to present a professional image but it's goes more than just presentation of that image a lot of these technicians have to go to BMW school or Audi school or Benz school because it goes way beyond normal typical mechanical knowledge of your typical Ford or even your basic Honda's or your Chevrolet's or any of those types of brands are often a lot less complex these German cars particularly BMW are very very complex cars because they're so complex these technicians not only have to get the basic fundamental training that most pop Prentis mechanics go through and learn the basics these fine folks have to go through special training to learn how to deal with a lot of the extensive complexities that you'll find associated with these BMW cars and so ultimately the expensive costs for parts because shipping overseas the additional training for the technicians that all gets handed down to the consumer initial price of purchase goes up and of course people become a little skeptical because they know the complexity of these cars are so intense they become afraid to purchase these cars as a result a lot of these cars stay in the market people don't buy them and a lot of times gravitate to simpler cars cars you know from the Toyotas and the Honda's and they'll even the Lexus as a premium brand is still a simpler car even though they have a lot of electronics in them these days are not the same level of complexity that you'll find in the BMWs or any other German brand for that matter now you have to remember the Germans are just a strong engineering culture and so a lot of these cars particularly BMWs are created built engineered by people that aren't satisfied with a basic nut and bolt you have to find waste for that nut and bolt to work even better so they have to re-engineer and then when they're done reengineering it then they over engineer it so with a belief that you know we'll build it even better stronger faster sometimes unfortunately they neglect the reliability of it they look at the function the form follows function a lot of times with the German cars like the BMWs and therefore they get them a lot more focused and zoned in on the way these parts work together how its engineered the performance the sound and how it's all pieced in one nice marvelous package unfortunately they sort of at times forget about the Rd and at times forget about some of the simplistic parts of being reliable after all think about where BMW came from and a lot of the technology now you see in everyday humdrum mundane cars like you'll find in you know generic little cars that cost twenty thousand dollars a lot of that technology like the displays and the touchscreens and a lot of these additional safety features like airbags you know 20 different airbags in a car and Lane Assist and pedestrian warning systems where do you think a lot of that came from how about airbags a lot of that came from German engineering which ultimately then over a few generations trickled into the mainstream and of course all the other brands picked up on that so it's all of this injection of engineering and being ahead and state-of-the-art pause money that money that Rd goes into complexities complexities that aren't always worked out they're not always perfect when they come out in the first and second third generations look at the iDrive system in the BMWs the first early generations were sloppy they were intense and you needed a rocket scientist to navigate through that system so of course those complexities aren't always perfect and when they fail and they do often it gets very very expensive so as a result there's track records people recognize that they get shy they don't want to buy those cars therefore a lot of those cars stay on the market the used cars that coupled with the fact that tons and tons of lease returns come back in the tens of thousands yearly flood the market three four or five year old cars flooding the market on top of the older cars that are been sitting there for quite some time that all contributes to the strong depreciation after all people again they get feared for expensive maintenance which isn't that far from the truth are they unreliable well there's a lot of reliable BMWs that don't cost a lot of money to own and operate I have some I've owned some myself but unfortunately there are some very complex BMWs that have a bad reputation for extremely expensive maintenance and poor reliability coupled together which created just massive fear by the consumer and so that reputation precedes itself and unfortunately spills over to a vast majority of the lineup and as a result prices go down and sumers run away and of course used cars have to go down in price you want to sell your car you want to exchange hands you want to buy a new car you're trying to sell your used BMW you have to make it palatable for the next buyer good service records low mileage premium cars are often bought or a very good deal because of the fear and the expensive repairs associated with these BMWs so everybody I really hope I shed some light for you there BMWs great brand some phenomenal values there in the used car market they represent some of the best cars out there for the bang for the buck so do Benz and some outies as well but know that you've got to do your shopping you have to buy car that's going to be reliable for you and you make sure you get good values everybody I really hope you enjoyed that commentary please make sure you drop me a line subscribe thumbs up and I hope that shared some light on the whole concept of why BMWs depreciate so quickly yes they can be very good no they're not always directly related to reliability but at the end of the day fear mongering and cost of maintenance and ownership as well as a flooding of the market are the key primary reasons why you can get a phenomenal BMW on a used car market thanks again everybody I hope to see you soon see you then bye-bye

Channel: ExoticCar PlayPlace

Views: 381,249

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Id: sqlNThV7J5k

Length: 9min 38sec (578 seconds)

Published: Fri Feb 01 2019