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Discussion Starter #1
New car owners hate to talk about it... deal-seekers love it... every car is affected by it...

Why do you think Saabs depreciate so rapidly the first 7 years? Not that eBay is a good medium for excellent-condition car sales but by my calculations a 2000 9-3 SE vert with 90,000 miles has depreciated nearly $0.43 / mile over its lifetime based on the MSRP of $43,250 and the average selling price of $5,400 (as seen in recent completed sales). Yuck!

Using the same "market" a similar mileage and year Toyota Corolla (LE trim, just for kicks) depreciates at about $0.10 / mile.

What's your opinion? Do you think the marketplace actually turns up their noses to certain Saab-specific qualities like turbocharging, exterior design, or the fact that Saab is a luxury GM brand? I know that other luxury cars also depreciate quickly but some of the big ones (BMW, Merc) are in the $0.30/mile range... Any philosophers out there?
 

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All luxury brands have high depriciation, some more than others. A Toyota Corrolla...while having less of a depreciation rate, has less total value to depreciate (remember it was only $17K new), and the imaginary ratings of Consumer Reports keep demand high for these cars (based on no REAL data, but CR is another topic altogether).

I think the bottom line is that there is low demand for used Saabs. Most Saab owners are eccentric and affluent and can buy a new (or newer) model if they want a Saab.

The emphasis by our so-called role models (sports stars, hiphop artists, etc) on Lexus, Mercedes, BMW, and Rover) keep the demand high for older used cars of these makes for people who probably cannot afford them, but buy them anyway to try to emmulate the lives of those they see on TV. This curbs some of the depreciation of these luxury brands.

Unfortunately b/c being a "luxury" brand is so profitable, Saab has tried to break into this market. I think this is a huge mistake. Saab should stick to the market of utilitarian vehicles which offer above average performance, high quality materials, and great utility, without the giant footprint and bad MPG of an SUV. THis is what made Saab great in the 1980's, but they have lost sight of it b/c there is a glass-celing for automakers who cater to a niche market. I always wonder why Saab cant just be happy serving it's niche.

Is that philosophical enough for ya?
 

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i love the depreciation. It helped me afford my car. I am not worred about reselling it because I plan to run it into the ground just like all my other cars (200K mi). After that, i don't care who buys it, your not going to get much money for it anyways.
 

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Discussion Starter #4
Right on--note that this is not a negative post. Nowhere am I saying that Saab sucks! I disagree, in fact. My 140k mile 2000 9-5 SE Wagon is wonderful. We love it! It beat all others in the $10k-and-less used wagon price range for comfort of seats, convenience doodads, and driving feel.

The lack of commercial endorsements... good point. And, yes, I recognize that the Corolla is a non-luxury brand. I just needed a 'other-end-of-the-spectrum' comparison price.

What about these two possibilities...

Saab lacks a high-visibility but somewhat superfluous 'supercar' series (ref: BMW M-Series and Mercedes AMG).

Saabs are considered 'dead' after a certain mileage (100k?) and an engine rebuild is 'knocking' at the door... (re-read my top blurb about our 140k car with original engine--so this is not necessarily the case)
 

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Saabs almost always garner an appearance of higher depreciation based on an MSRP that always diverges from what people actually pay(see rebates, customer cash, factory to dealer incentives, GMS discount etc.)

My 2007 SS anniversary stickered at $30K. I paid less than $23k. If I were to use online sources as a guide, I could make a case that the car has appreciated in value.

I would imagine that the 2000 MY example you cite will most certainly reveal the "devil" in it's details (condition, history etc.)
There are few takers for Saab in 2007 at MSRP. I doubt there were many others in 2000.


Check out Forbes for confirmation as the 2nd lowest cost to own luxury car, just behind Acura, based on MSRP. If we were to consider the fact that Saab is more steeply discounted than Acura, than Saab should be number 1 on that list.

In the end, buy what you like. It's a losing proposition financially no matter how you look at it. They are great cars and mine puts a smile on my face every time I turn the key. Certainly great value in that alone.
 

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You picked a ringer with the Corolla. Both Toyota and Honda have stupid high residuals.

What kind of person pays like $8k for a 10 year old Accord? Just one example.

Saab depreciation is right in line with all the second level makes like GM, Ford, etc. Basically, any make that has high rebates (>>>$2k) is going to have bad residuals.

Low residuals are a problem for some people, but an opportunity for others!
 

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Discussion Starter #7
Yep, good points again. Comparing against MRSP is kinda flawed and there have been better studies than my 10 minute one. :)

And I wholly agree with the idea of a car company not trying to broaden its appeal too wide so that it loses its 'core.' Saab going luxury is a difficult jump for me. Can they compete? I hope GM doesn't squeeze the Saab out of Saab.

Also, this isn't really a comparison of buying new versus buying used. I agree--buy what you like. I was more curious about specific things that make Saab depreciate... common wisdom (either correct or misguided) of the general public which makes their value less than others...
 

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I don't necessarily have a problem with Saab going upmarket. With the dollar depreciating so much, they almost have to, unless they start building them in the US, a la the 9-7. God knows that they could build them at the Saturn plant in Delaware, no problem. Maybe they will someday.

I do have a problem with GM taking the Saabness out of them. What's a Saab? How about everybodies favorite Saab, the 1987 900 Turbo? What was that car all about? 16 valve 4 cylinder turbo, at a time when most cars didn't have 16 valves, much less a turbo.

High tech 4 cylinder turbos. That "Euro look" (again, take a look at the '87 900 Turbo). Light weight and front wheel drive. That's what Saabs are.

Some would say that Saabs are hatchbacks.

So... maybe one problem is that Saab doesn't have a strong identity?
 

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Here is a good example of depreciation:

I bought my 2006 Saab 9-3 Aero at the end of May of this year (MSRP $36+) and added $1700+ in extras (BSR, mufflers, tint, etc.), 3900 miles and as-new with most of its warranty. The best price I can get is $21k! And that was from CarMax...are you kidding me?!

As said above, it allows a buyer to get a great deal but hurts the original owner big time! So I put it on ebay last night...I should get more than $21k there I hope.
 

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Discussion Starter #10
Uh oh! You opened the CarMax can of worms...

Yes, hopefully an '06 will go for more than $21k! But man, eBay is a tough place for legitimate sellers sometimes. Tried Craigslist and Kijiji?
 

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It has been on Craigslist for a while and no interest. Man, I cannot believe the low value for an almost new car, perfect condition, extras, etc. But again, my lose would be someones gain...I should have bought used vice new!
 

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Bob Z. said:
I bought my 2006 Saab 9-3 Aero at the end of May of this year (MSRP $36+) and added $1700+ in extras (BSR, mufflers, tint, etc.), 3900 miles and as-new with most of its warranty. The best price I can get is $21k! And that was from CarMax...are you kidding me?!
Okay, wait, did you pay $36k for the car? If so, then yes, your depreciation is bad, but that's because you overpaid. Instead, I'm going to guess you paid something like upper 20's maybe 30. Tuning the car doesn't mean it's now worth an additional $1700, in fact, to many buyers, that is a turn-off. I think a lot of people see a tuned car as a car that has being driven hard. Obviously that's not always the case but that's the typical perception.

No matter what car you buy, it's going to depreciate, especially if you want to get rid of it after five months. Also, take a look at whats happening in the car world right now - sales are down due to the housing/credit crunch; people just aren't buying cars right now. Plus take a look at the incentives being offered on a new 2007, $5500 (or $6500 if you're a Saab owner) incentives and dealers that are wanting to move the inventory to make room for the '08s. It's just not a good time to be selling a car.
 

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I agree, when I see a car with Mods, I just move on down the list. I assume it was abused (driven hard all the time) and am uncomfortable about what that may have done to the car as far as driveline wear. I would not advertise it that way if I were you.
 

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I hear you and you know that I did not pay $36k...I paid about $28k (+ tax) and added the extras. I have had the BSR installed for about 1k miles and never abused it (seriously) - I will not lie and say it was not modded though. Regardless, the car is worth more than $21k IMO. I can afford to take a hit but I'll keep it as an extra car before giving it away for that price...a wholesaler would take it and flip for a quick profit. I cannot see why I could not get $23-24k for it as a fair price.

I have learned that Saabs has a much bigger depreciation than most other cars!
 

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I wouldn't say that Saabs depricate MORE than MOST other cars.

They're not Hondas. They're not Toytoas. They're not BMWs.

But they're pretty competitive with most cars.

If you bought, say, a Mitsubishi for the same amount at the same time, you be feeling the same pain.
 

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Bob Z. said:
I hear you and you know that I did not pay $36k...I paid about $28k (+ tax) and added the extras. I have had the BSR installed for about 1k miles and never abused it (seriously) - I will not lie and say it was not modded though. Regardless, the car is worth more than $21k IMO. I can afford to take a hit but I'll keep it as an extra car before giving it away for that price...a wholesaler would take it and flip for a quick profit. I cannot see why I could not get $23-24k for it as a fair price.

I have learned that Saabs has a much bigger depreciation than most other cars!
Modifications decrease the value in my eyes and a lot of other buyers. You should replace the mufflers with the stockers at least as that is a mjaor turn off to me. If it was a Abbott cat-back or the like, maybe then it would be a selling point, but with just mufflers replaced for more noise its a turn off.
 

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I understand the logic regarding mods but after owning several Vipers, a 911 Turbo, Vettes, and SLK, etc. they all had mods and tasteful mods did not take away from the value. Especially when my tires show no signs of wear/abuse and the mileage is so low. But I realize that the Saab is in a somewhat different league.

Besides, it is not worth my time to take it somewhere and have the exhaust returned to stock since I want to sell it very soon. The $21k I have been offered (from multiple sources) will not change regardless of whether I change anything or not.
 

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I think we may be arguing two different and distinct points, one being fair value and the other, liquidity.

Fair value is simply pressure over time, marketing and advertising the car in a broad sense that will bring in the most offers and thus the highest price one would be willing to bear for your car. In other words, if you spend a reasonable amount of time trying to sell it you eventually will do so at a reasonable price.

Liquidity is simply dumping your car at less than wholesale through an auction or at carmax. No fuss no muss. Highly efficient from a standpoint of liquidity, but very poor in terms of fair value efficiency.

Markets for cars do not work with the same efficiency as commodities or financial instruments.

I am convinced that these rules apply to ANY make or model of car. Not just Saabs.
 

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new92xowner said:
Markets for cars do not work with the same efficiency as commodities or financial instruments.
But a car is not fungible* in the same way as a commodity or financial instrument so how could it work the same?
The car market is a lot more liquid these days with the advent of the internet. Look at Woy's recent purchase, they buyer probably did better because he wanted that car. How would he have found that car pre internet?

*A share/equity/commodity is the same as the next. A car will vary on colour, trim, options, mileage, wear items, warranty, etc. Each individually impacts the value to an extent. I guess when only the Black Ford Model T existed cars could be considered more fungible.
 

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I put mine in ebay so we'll see what the actual market value is on Saturday when the auction ends.

Funny, there is an identical car to mine on enay as well, which ends the day after. But it has ~16k more miles and is a year older...we'll see what the final price difference is.
 
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