General Residual Values

[Robnw67]

I have had my 500 1.2 Lounge for 5 months and went to the dealer last night to have it valued for trade in. Imagine my shock when my £12300 car only 5 months ago, is now worth only £8500. I was further put out to hear that, in fact I am in £200 worth of negaitve equity at the moment. Not really what I wanted to hear.

Apparently Fiat have flooded their forecourts with 'used' or demonstrator 500's with only 10's of miles on the clock. The dealer was showing me dozens of their dealer stock with 12 plate 500's for between £8500 and £9000. So beware your residual values when you come to trade in in 3 years time!!

I was expecting to get £8000 in 3 years.........it's not worth that now!! :yuck:

Ideal for buying. Pants for selling trade in...........

 

[ahmett]

I have had my 500 1.2 Lounge for 5 months and went to the dealer last night to have it valued for trade in. Imagine my shock when my £12300 car only 5 months ago, is now worth only £8500. I was further put out to hear that, in fact I am in £200 worth of negaitve equity at the moment. Not really what I wanted to hear.

Apparently Fiat have flooded their forecourts with 'used' or demonstrator 500's with only 10's of miles on the clock. The dealer was showing me dozens of their dealer stock with 12 plate 500's for between £8500 and £9000. So beware your residual values when you come to trade in in 3 years time!!

I was expecting to get £8000 in 3 years.........it's not worth that now!! :yuck:

Ideal for buying. Pants for selling trade in...........

Why was your 1.2 lounge so expensive?
I remember a dealer telling me the second you put plates on the car you lose all the extras.

 

[RobinPJ]

Two lessons to learn from this:

first, dont expect a fiat dealer to offer a decent trade in, so sell privately;

second, don't buy a new car and only keep it for five months.

 

[jrkitching]

I have had my 500 1.2 Lounge for 5 months and went to the dealer last night to have it valued for trade in. Imagine my shock when my £12300 car only 5 months ago, is now worth only £8500. I was further put out to hear that, in fact I am in £200 worth of negaitve equity at the moment. Not really what I wanted to hear.

Apparently Fiat have flooded their forecourts with 'used' or demonstrator 500's with only 10's of miles on the clock. The dealer was showing me dozens of their dealer stock with 12 plate 500's for between £8500 and £9000. So beware your residual values when you come to trade in in 3 years time!!

I was expecting to get £8000 in 3 years.........it's not worth that now!! :yuck:

Ideal for buying. Pants for selling trade in...........

I can understand you being upset when your dealer told you he'd only give you £8500 if you traded in the car today.

Small FIAT's could traditionally be bought new for cash discounts of around 20%; FIAT set list prices at levels which enable them to offer all manner of 'incentives' like enhanced trade in values, low interest finance, deposit subsidies, etc. In the case of the 500, initial popularity and fashionability allowed FIAT to sell the car without needing to discount. This is a bubble which was always going to burst & the cracks are starting to appear - you will no longer be laughed out of the showroom if you ask for a significant cash discount on a new 500. My surprise is that it's actually taken this long.

Also, many folks choose to specify a number of costly options on their new 500's. This is fine if you can afford it & will keep the car for long enough to reap the benefit, but dealers generally won't offer you much of their initial cost back at trade-in time - which is why most finance companies will seek to recover the total cost of any options you specify, with interest, over the period of the agreement.

The bottom line is that if you buy a new 500 with a few options at list & chop it in after less than a year, you're going to lose a shedload of money. TBH you could say the same about pretty much any new car.

OTOH, if you are canny enough to find such a car for sale privately & you've got the ready cash, you might just be able to negotiate your way to a real bargain.

 

[RobinPJ]

This is a bubble which was always going to burst & the cracks are starting to appear

Cracks in a bubble? How does that work?

 

[jrkitching]

Cracks in a bubble? How does that work?

Probably in much the same way as when someone comes up behind you & flashes their horn*.

If you really want to know how bubbles burst, have a look here.

In best forum tradition, this is only post #6 and we are now seriously

 

[Super Uwe]

I have had my 500 1.2 Lounge for 5 months and went to the dealer last night to have it valued for trade in. Imagine my shock when my £12300 car only 5 months ago, is now worth only £8500. I was further put out to hear that, in fact I am in £200 worth of negaitve equity at the moment. Not really what I wanted to hear.

Apparently Fiat have flooded their forecourts with 'used' or demonstrator 500's with only 10's of miles on the clock. The dealer was showing me dozens of their dealer stock with 12 plate 500's for between £8500 and £9000. So beware your residual values when you come to trade in in 3 years time!!

I was expecting to get £8000 in 3 years.........it's not worth that now!! :yuck:

Ideal for buying. Pants for selling trade in...........

It wouldn't surprise me actually if the value of your car in three years time was around the £8k mark (based on current prices). If you look at the prices of 2 to 3 year old 500s now, they aren't super cheap. Our 59 plate 1.2 Pop was sold for £7500 in June this year

I think the price is more down to the fact it's five months old rather than anything else; however I do agree the 500 is probably looking shakier in terms of its residuals than it has to date.

 

[ahmett]

It wouldn't surprise me actually if the value of your car in three years time was around the £8k mark (based on current prices). If you look at the prices of 2 to 3 year old 500s now, they aren't super cheap. Our 59 plate 1.2 Pop was sold for £7500 in June this year

I think the price is more down to the fact it's five months old rather than anything else; however I do agree the 500 is probably looking shakier in terms of its residuals than it has to date.

Lets not forget, that the biggest hit is when you put numberplates on the car = ) After that depreciation slows down.


If it didnt slow down, some cars would be selling at negative figures! = )

as in -2500 pounds for a 10 year old vw polo!

 

[Robnw67]

Like I said - I saw dozens of examples of 1.2 Lounges with 10 miles on the clock for £8500 to £9000. Why would anyone buy a 3 year old car just to save £1000? According to just autotrader there are 20 within a 30 mile radius of my house.

 

[jrkitching]

Like I said - I saw dozens of examples of 1.2 Lounges with 10 miles on the clock for £8500 to £9000. Why would anyone buy a 3 year old car just to save £1000?

Common sense suggests that they wouldn't. I've been banging this particular drum for the past couple of years & IMO current residuals on 2-3yr old cars are unsustainable. Anyone buying a 3yr old 500 at these prices needs therapy.

Historically if you can get back 50% of the purchase price of a new car after 3yrs, you've done very well indeed. Residuals for most normal cars are typically 35%-40% of list.

Securing a 20%+ discount off that list at the outset is one way of keeping depreciation manageable.

 

[RobinPJ]

I'll be delighted if our car is worth £7,000 next summer when it is 3 years old. Depreciation of £110 per month would be fantastic.

 

[306maxi]

We bought our 1.2 Lounge with leather, side rubbing strips and 16" alloys for £8720 on scrappage back in 2009. It doesn't take a rocket powered brain surgeon to tell you that 12 grand was far far far far far far far far far too much to pay and that you were never going to get 8k back after 3 years. Not in a million years.

Buying a VERY expensive little car and then selling it 5 months later is always going to end in tears. I'm stunned that you thought that your car would be worth 2/3rds of the list price after 3 years.

 

[306maxi]

There's another reason why residual values appeared so high.

Back in 2008 when the 500 was first launched, a 1.2 pop would have cost you 7,900 and nowadays it costs 9960.

For some strange reason, people still kept on paying the frankly ridiculous prices. I mean 12k for a 1.2 lounge is just madness if you ask me. But people still keep on paying the prices and this has meant that the values of 3 or 4 year old cars have held up, for your car to be worth anything near 8k in 2 and a half more years you'd want Fiat to be charging 15k by then.... it aint gonna happen.

 

[jrkitching]

Back in 2008 when the 500 was first launched, a 1.2 pop would have cost you 7,900 and nowadays it costs 9960.

A couple of mouse clicks will get you a new 1.2 pop today for £8960 so perhaps not quite as bad a picture as you are painting.

That said, IMO it's still around £500 more than it's worth, but if you manage to get £5500 for it after 3 yrs (which is a more realistic assumption), you're looking at a manageable £100 pm depreciation. Buy a lounge with a couple of options, choose a metallic colour & pay full list & you'll easily double your depreciation.

 

[306maxi]

I meant in terms of list, which people still seem all too willing to pay!

 

[306maxi]

A couple of mouse clicks will get you a new 1.2 pop today for £8960 so perhaps not quite as bad a picture as you are painting.

That said, IMO it's still around £500 more than it's worth, but if you manage to get £5500 for it after 3 yrs (which is a more realistic assumption), you're looking at a manageable £100 pm depreciation. Buy a lounge with a couple of options, choose a metallic colour & pay full list & you'll easily double your depreciation.

I never quite get the whole depreciation thing anyway, but I guess that's because I intend on keeping our car till it falls to bits so depreciation doesn't exist for me!

 

[jrkitching]

I meant in terms of list, which people still seem all too willing to pay!

What this thread highlights for me is that there are many, many ways you can pay more than you need to for just about anything.

 

[The Littlest Hobo]

I have said it before and I will say it again . Buying an expensive little town car and adding a load of extras trying to turn it into something it isn't is a recipe for disaster.

£12,13,14,15k for a small car is insane.

The depreciation figure was probably the salesman thinking it was too much hassle. A customer that wants to change after 5mths is gona be a pain in another 5 mths. Then you have the fact that a 5 mth lounge needs to be on the forecourt at no more than you can get a brand new pop for including offers you are looking at about £9k. That's bringing it close to the figure they mentioned.

I bet you c old get more for it by shopping around but I wouldn't be banking on £8k after 3 yrs

 

[Heidi]

My 500 cost just over £11k with the extras. I have had the car 4 years and done 36k miles and intend to keep at least a further 4 years when it will be pushing 72k miles and be worth about £500-£1000. But 8 years of fun for £11k (less if include trade in car) seems not bad to me. If u change a car within 2-3 years that you added extras to you can't expect to get a good return. I've been guilty of this in the past....never kept a car long enough to have an MOT. This is first time and I'm wondering now why I ever bothered flitting between cars

 

[Murano16v]

Worth remembering too that the true value of a car costing £12300.00 is
£10250.00 with £2050.00 going straight to the VAT man and not the dealer.

£12300.00 for a 1.2 lounge makes this nice looking Abarth pretty good value
http://classifieds.pistonheads.com/...0-1-4i-16v-t-jet-135-bhp--1k-dep-199pm/883451