Quote:
Originally Posted by geotracks I got to see the 2017 Audi Q3. The interiors really look plush & rich. The sun roof spans across the top and really looks nice. The vehicle really has a 'solid' feel to it and the interiors are top notch. What I also liked was, it is really easy to slide in & out of the vehicle (as it is not too high nor too low, just perfect).
On the buyback option, for the Audi Q3, the sales rep said that 'generally speaking', the buyback 'guesstimate' is, 1st year the car depreciates by 10% and each subsequent year by 15%. The Q3 comes with a 2-year warrantee. One can add 2 additional years on extended warrantee. Thus, at the end of 4th year the Q3 would have depreciated around 55%. So, for a car of about INR 45L+- that would mean after 4 years it would be around INR 20L +-.
I have couple of basic question on the Audi Q3 (or for that matter any equivalent luxury cars like BMW X1 or Mercedes GLA):
i) Does the Audi Q3 value really depreciates this much after 4 years?
ii) How do most owners deal with expensive spares should they choose to keep the vehicle beyond 4 years after extended warrantee is over? Or is it that it is best to replace luxury cars (may not be with a another luxury car) after 4 years so that expensive repairs can be avoided, if ever required. |
Just a couple of points of view:
1. The depreciation works quite quickly: around 20% in year 1 and 10% for every subsequent year. So at the end of 5 years the car is valued at about 40% of its original purchase value.
2. Typically the First owner takes the biggest depreciation and tax hit unless he/ she hangs on to the vehicle for a sufficient time and extracts his/ her ROI from it. This is why in general, it is a very good idea to scout about in the used car market, when shopping for a luxury marque! (See the other thread on TBHP about Lateral Upgrades).
3. Most of these luxury cars are bought by high earning businessmen or companies/ corporates or independent professionals who can claim depreciation against taxable income. Such people tend not to put too much mileage on these cars because invariably this is 'one' of the cars in their fleet and anyway they tend to change their cars every so often.
4. Many of these cars are also bought by Company Execs on 'Lease-plans' where there is a built-in buy-back 'assured value' at the end of the lease period, whether 3 years or 5 years. The lease plan attempts basically to keep the consumer within the brand and extract a higher lifetime value from the consumer by 'forcing' an 'upgrade' every so often, to the next level. It is also true that many of these cars are bought by chaps with large disposable incomes and by those having 'different' sources of wealth. But that's as may be and not pertinent to this discussion.
5. When buying an expensive car, yes it makes solid sense to go for the maximum 'extended warranty' and the 'comprehensive insurance with zero-depreciation' benefit as well throughout the life of the vehicle when it is in one's hands. This helps to guard against potential expensive parts replacements during the 'extended warranty' and helps to an extent (in the event of accident damage and / or other mishap) even after the expiry of the extended warranty, through the 'zero-depreciation' insurance.
6. Maintain the car well. Use only the Authorised workshops at all times, so as to be able to get the benefit of original parts and consumables and to retrieve its official service history at any time in the future.
7. Yes, if one buys an expensive car, then it is best to be prepared to spend well on it's maintenance and upkeep and spares. There is never going to be any respite from that, notwithstanding whatever one may be told.
Personally, I am not truly a Luxury Brand owner - I own a 5.5 - 6 year old Skoda Yeti which is just a Mass+Prestige = Mass-tige brand.
It was quite expensive by my standards when I bought it. And I do spend a fair bit every year on its upkeep and maintenance - perhaps I am a bit obsessive in that sense, but I actually spend an easy 25K a year on this car plus another 30K on the insurance including zero-dep.
I am not sure, when and indeed, if, ever, I will make the transition from Mass-tige, to Prestige, Luxury and beyond, especially since I live right here in India where these vehicles are hopelessly over priced when brand new and are taxed to death besides.
In fact although many of my friends and acquaintances have all gone above and beyond on the cars that they own, I am thinking sharply that if at all I consider one of these luxury vehicles, I will probably look at the 'used' route.
My Conclusion in this; If one is trying to 'save as much as possible' and 'wishing to do things on the cheap', in general, then it is better to stay with less expensive, mainstream brands rather than head over the line to the more esoteric and/ or luxurious side.