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