The Depreciation Myth
March 28, 2011 in Editorial
Recently I’ve been noticing a few comments here and other sites claiming how Saabs depreciate much faster than their competitors. Like others who visit this site, I’m sick of seeing the words “loss-making” in front of Saab’s name. So when I heard people attaching those words to the cars themselves, I decided it was time to research the validity of that statement. I posted this in comments but I think it deserves its own space on the site for the official record.
I know for many of our American readers it’s getting towards tax time and you may not want to crunch any more numbers, but don’t be afraid– I promise you’ll enjoy the results after the break.
Before I begin, the basis for the myth that Saabs depreciate more than other luxury brands is their high MSRP. We’ve discussed this many times, and some have argued that Saab needs to cut their prices closer to the numbers they actually sell at to attract new customers. I’m not going to argue that point here, instead I’m going to show you real advertised internet prices which typically reflect very little markup by the dealer. Using cars.com, the biggest car sales site in the US by far, I took a sampling of Saabs, BMWs, Audis, and even Acuras, as they claim to have the highest residual values of any luxury brand.
Why I’m using advertised sales prices for new cars vs. MSRP is because it gives us a more accurate understanding of what the real prices one can reasonably expect to pay for a car is. In each case I tried to match options exactly, and I have attempted to keep the mileage of the used cars average for a 3 year old car (30-45k). I picked new cars that were never titled and in all cases tried to find the lowest advertised priced ones (non demos) to be as close to actual final sales price as possible. In the case of used cars I did the same, trying to pick the lowest priced examples with average mileage. If the dealer was a used car dealer instead of factory dealer, I used an * to denote the difference. All cars come from the same area (Northeast US), all new and used without asterisks are from manufacturers’ dealers. Here are the numbers.
2011 Saab 9-3 2.0T vs 2008 Saab 9-3 2.0T
Essentially the same car, very little has changed. I used the 2.0T FWD as the basis to compare since the 2011 Aeros also use the 2.0T engine and differ mainly in trim only. I chose FWD because XWD wasn’t offered on the 2008 2.0T in the US.
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2011 BMW 328i vs. 2008 BMW 328xi
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2011 Audi A4 vs. 2008 Audi A4
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2011 Acura TL vs. 2008 Acura TL
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Just for kicks, here’s a comparison of a NG Saab 9-5 V6 (2011 Turbo6 and 2010 Aero) vs 2008 Saab Turbo X
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So if you’ve made it all the way through (well done), some things to take away from this study. Saabs are selling not just a little under the competition, but a LOT. While we may not like it, prices are more competitive with VWs and Buicks than Audi or BMW. Do these huge discounts and their high MSRPs deter customers from even looking at Saabs in the first place? There’s a strong case to be made. I realize that these links will eventually disappear in the future, but for the time being (Spring 2011) they serve a purpose.
One other thing this all means is that the used Saab you bought for a huge percentage off sticker might not be as good a deal as you once thought. If prices stay stable on new Saabs, you might be better off in the long run buying new. And if you’re in the market for a 9-5, you’d be a fool not to snap up one of the remaining new 2010s.