Resale Value price loss in ten months

CHRIS REDPATH · 27th February 2008, 16:10

Hi there could any one advise on this please.
Received a letter this morning from honda asking if we would like to exchange our ten month old civic 2.2 ctdi es leathers and 17inch pentas
as it was nearly a year old and they have a big market for people who required the diesel model second hand ?
ok we hadent concidered this but lets go see what they are offering.
The price we paid was £18.700.00 after nihat sever finished going seeing there top men & us having a cuppa we got offered £12.600.00
Not very happy with honda thats quite a large loss in less than a year
Whats your views please
Thanks kindly
chris redpath

allan40alt · 27th February 2008, 16:13

They're not backwards in coming forwards, are they!!

cylon2007 · 27th February 2008, 16:25

You always lose a shed load of money in the first year on any new vehicle, but seeing as they approached you I would have hoped they would make a better offer

allan40alt · 27th February 2008, 16:49

There's a similar thread here:

Low value of 57 plate ES

We may as well just hand over our wallets as we walk into the showroom!

Courant · 27th February 2008, 16:56

Two "reality-check" points to consider. First off, a new car will lose something like 25% of its value in the first year. Full stop, there's not much you can do about that. The sensible thing to do is, if you buy new, keep it at least a couple of years. That way, you spread the depreciation over your ownership period a bit better.

Second, dealers exist to make money. It varies a bit, but I'd guess the dealer is looking at a £2000 margin on cars like that. That covers their costs, plus a profit. Again, if you sell to a dealer there's no getting round that.

So, (18700 * 0.75) - 2000 = ~ 14000. So really, your dealer is giving you a reasonable deal (from a dealer's perspective) but, in fact, it's not a good deal *for you* because you're crystalising your first year's depreciation and you're paying the dealer a margin.

The less you trade your cars, the less overall margin you pay dealers and the less you suffer from depreciation (because the average age of the vehicles you own over their lifetime goes up).

Hang on to the car for a bit longer and/or sell it privately!

Courant

SimonB · 27th February 2008, 17:08

I delt with the same person at Francis Honda.... I would 'stongly' recommend trying somewhere else for good value and assistance.

Thats all I'll say, based on my previous experiences!

sambuca2907 · 27th February 2008, 17:09

The dealer will sell your car for about £16,500 on the forecourt! If there is a huge demand for 2nd hand diesels then you should have no trouble selling it for £16,000 or more on AutoTrader!!!

That is if you want to sell it...!

Guitaralmond · 27th February 2008, 17:09

Number one rule - never accept the first offer!

ghowarth · 27th February 2008, 18:00

Tell them to "poke it" and keep you car!!

jazzman · 27th February 2008, 18:08

Quote:

Originally Posted by CHRIS REDPATH

Hi there could any one advise on this please.
Received a letter this morning from honda asking if we would like to exchange our ten month old civic 2.2 ctdi es leathers and 17inch pentas
as it was nearly a year old and they have a big market for people who required the diesel model second hand ?
ok we hadent concidered this but lets go see what they are offering.
The price we paid was £18.700.00 after nihat sever finished going seeing there top men & us having a cuppa we got offered £12.600.00
Not very happy with honda thats quite a large loss in less than a year
Whats your views please
Thanks kindly
chris redpath

Forget it. The maximum loss on ANY car is in the first year, you have to work out a fair depreciation figure over a minimum 3 year period and anyway why on earth would you want to change your car that you bought new in under a year, what a financial mistake

pcr · 27th February 2008, 18:08

Chris, I need some money, can you send some please. What I mean is, why are you even considering it ?.

Andy_K · 27th February 2008, 18:19

Don't talk to me about this subject guys... I bought a Civic EX with loads of optional extras added...
18" Storm Alloys
Leather Interior
Reverse Park Camera ...etc...

Cost New @ March 2007 = £19,960
I paid @ October 2007 = £17,000
Trade in Value February 2008 (average over 3 Honda dealers) = £12,500

So my car has lost £7460 since new.....Although I have lost £4500 in 4 months!!!
Cannot afford to lose that amount... only last option is to slap it into the AutoTrader... Thinkin about £15,000?

cb550 · 27th February 2008, 19:59

The dealer offers-'we need your diesel' etc, etc is nothing more than marketing technique to get you and me and as many others back into the showrooms and move us with another new vehicle back out through the showroom doors.

Factory extras are great for personalising a new car.Their cost can soon considerably bump up up the price of the vehicle.Unfortunately they usually add little or nothing to the car's value come trade-in time.Factor in the inevitable hit of selling any nearly new vehicle and the result is a bit of an unpleasent eye-opener,financially.

To me,The Civics are great value if you choose the correct model-SE,EX etc that already has the spec you want for your car

(Don't know too much about it,but really beginning to think for me, leasing might be the way to go in future)

Courant · 27th February 2008, 20:48

Leasing really makes sense if you want to always have a new car - it works out much cheaper to lease for a year, then change the lease car, than buy a new car and sell after a year.

However, if you want/can hang onto the car for longer, then buying and keeping works out better (in general). Even better is to buy a 1-2 year old car, then someone else has taken the depreciation hit.

Courant

gjackson · 27th February 2008, 20:54

As has already been said making out they want your used car is nothing more than marketing. Their plan is that you have convinced yourself you want a new car by the time you get to the dealer.

DeanFYoung · 27th February 2008, 21:25

You werent looking to change, they came to you. Don't feel you now have to change. But becuase of that, I'd simply ask for more of a trade in you are now seriously considering a change, why not? You werent looking to change, so you have nothing to loose and either way you carry on driving a Civic!

grasey · 27th February 2008, 22:18

I would keep a new car at least two years.

Orschild · 27th February 2008, 23:04

Or until the warranties end

l-noel · 28th February 2008, 09:04

The minimum time I've owned a car was 5 years, I kept the others up to 8 years. At least the loss as been absorbed by the use I've made of it.
Car are not investments but tools

Btw, I've noticed that 2nd hand new Fiat 500 with low mileage are more expensive now than new ones !

Foggy69 · 28th February 2008, 09:59

It seems strange that Honda would really want to draw peoples attention to the fact that you car is worth so much less after just one year. It could be perceived by the average buyer that Honda residuals aren't as good as they were led to believe. Making people think that maybe Honda, and the Civic, isn't quite as good as they were lead to believe

BUT, if you compare it with the second hand prices of a VW Golf, considered one of the lowest depreciating cars in the class, then it shows roughly the same loss over one year as a Civic. And if you compare how much more you would have lost if you had bought a Focus (sorry TC) then you are over £1000 up on the deal, and on a 307, nearly £2000 up.

27th February 2008, 16:10	#1 (permalink)
CHRIS REDPATH Valve Cap Join Date: 18th March 2007 Location: leicester Posts: 10 Thanks: 0 Thanked 0 Times in 0 Posts iTrader: (0)	price loss in ten months Hi there could any one advise on this please. Received a letter this morning from honda asking if we would like to exchange our ten month old civic 2.2 ctdi es leathers and 17inch pentas as it was nearly a year old and they have a big market for people who required the diesel model second hand ? ok we hadent concidered this but lets go see what they are offering. The price we paid was £18.700.00 after nihat sever finished going seeing there top men & us having a cuppa we got offered £12.600.00 Not very happy with honda thats quite a large loss in less than a year Whats your views please Thanks kindly chris redpath

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This thread is about: price loss in ten months, it's in Buying, Dealers and Servicing at the Honda Civic forum Civinfo; Hi there could any one advise on this please. Received a letter this morning from honda asking if we would like to exchange our ten ...

27th February 2008, 16:13	#2 (permalink)
allan40alt Supporter Civinfo guru Join Date: 6th August 2006 Location: England Posts: 2,253 Thanks: 13 Thanked 33 Times in 31 Posts iTrader: (0)	They're not backwards in coming forwards, are they!!

27th February 2008, 16:25	#3 (permalink)
cylon2007 Magic Rear Seat Join Date: 14th April 2007 Location: South Manchester/North Cheshire Posts: 572 Thanks: 0 Thanked 6 Times in 6 Posts iTrader: (0)	You always lose a shed load of money in the first year on any new vehicle, but seeing as they approached you I would have hoped they would make a better offer

27th February 2008, 16:49	#4 (permalink)
allan40alt Supporter Civinfo guru Join Date: 6th August 2006 Location: England Posts: 2,253 Thanks: 13 Thanked 33 Times in 31 Posts iTrader: (0)	There's a similar thread here: Low value of 57 plate ES We may as well just hand over our wallets as we walk into the showroom!

27th February 2008, 16:56	#5 (permalink)
Courant Locking Wheelnut Join Date: 27th January 2008 Location: Cambridge, UK Posts: 149 Thanks: 0 Thanked 1 Time in 1 Post iTrader: (0)	Two "reality-check" points to consider. First off, a new car will lose something like 25% of its value in the first year. Full stop, there's not much you can do about that. The sensible thing to do is, if you buy new, keep it at least a couple of years. That way, you spread the depreciation over your ownership period a bit better. Second, dealers exist to make money. It varies a bit, but I'd guess the dealer is looking at a £2000 margin on cars like that. That covers their costs, plus a profit. Again, if you sell to a dealer there's no getting round that. So, (18700 * 0.75) - 2000 = ~ 14000. So really, your dealer is giving you a reasonable deal (from a dealer's perspective) but, in fact, it's not a good deal for you because you're crystalising your first year's depreciation and you're paying the dealer a margin. The less you trade your cars, the less overall margin you pay dealers and the less you suffer from depreciation (because the average age of the vehicles you own over their lifetime goes up). Hang on to the car for a bit longer and/or sell it privately! Courant

27th February 2008, 17:08	#6 (permalink)
SimonB Wheelnut Join Date: 1st November 2006 Posts: 64 Thanks: 0 Thanked 1 Time in 1 Post iTrader: (0)	I delt with the same person at Francis Honda.... I would 'stongly' recommend trying somewhere else for good value and assistance. Thats all I'll say, based on my previous experiences!

27th February 2008, 17:09	#7 (permalink)
sambuca2907 S29 AWS Triangular Exhaust Join Date: 17th September 2007 Location: SW London Posts: 416 Thanks: 0 Thanked 13 Times in 6 Posts iTrader: (0)	The dealer will sell your car for about £16,500 on the forecourt! If there is a huge demand for 2nd hand diesels then you should have no trouble selling it for £16,000 or more on AutoTrader!!! That is if you want to sell it...!

27th February 2008, 17:09	#8 (permalink)
Guitaralmond Master of paint!! Triangular Exhaust Join Date: 9th January 2008 Location: Stoke-On-Trent Posts: 362 Thanks: 5 Thanked 7 Times in 7 Posts iTrader: (0)	Number one rule - never accept the first offer!

27th February 2008, 18:00	#9 (permalink)
ghowarth Supporter Locking Wheelnut Join Date: 13th February 2008 Location: Aylesbury UK Posts: 161 Thanks: 1 Thanked 4 Times in 4 Posts iTrader: (0)	Tell them to "poke it" and keep you car!!

27th February 2008, 18:08	#11 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 850 Thanks: 0 Thanked 1 Time in 1 Post iTrader: (0)	Chris, I need some money, can you send some please. What I mean is, why are you even considering it ?.

27th February 2008, 18:19	#12 (permalink)
Andy_K Wheelnut Join Date: 2nd January 2008 Location: Leeds, UK Posts: 62 Thanks: 0 Thanked 0 Times in 0 Posts iTrader: (0)	Don't talk to me about this subject guys... I bought a Civic EX with loads of optional extras added... 18" Storm Alloys Leather Interior Reverse Park Camera ...etc... Cost New @ March 2007 = £19,960 I paid @ October 2007 = £17,000 Trade in Value February 2008 (average over 3 Honda dealers) = £12,500 So my car has lost £7460 since new.....Although I have lost £4500 in 4 months!!! Cannot afford to lose that amount... only last option is to slap it into the AutoTrader... Thinkin about £15,000?

27th February 2008, 19:59	#13 (permalink)
cb550 Supporter Magic Rear Seat Join Date: 26th May 2007 Location: Nottingham Posts: 520 Thanks: 14 Thanked 7 Times in 6 Posts iTrader: (0)	The dealer offers-'we need your diesel' etc, etc is nothing more than marketing technique to get you and me and as many others back into the showrooms and move us with another new vehicle back out through the showroom doors. Factory extras are great for personalising a new car.Their cost can soon considerably bump up up the price of the vehicle.Unfortunately they usually add little or nothing to the car's value come trade-in time.Factor in the inevitable hit of selling any nearly new vehicle and the result is a bit of an unpleasent eye-opener,financially. To me,The Civics are great value if you choose the correct model-SE,EX etc that already has the spec you want for your car (Don't know too much about it,but really beginning to think for me, leasing might be the way to go in future)

27th February 2008, 20:48	#14 (permalink)
Courant Locking Wheelnut Join Date: 27th January 2008 Location: Cambridge, UK Posts: 149 Thanks: 0 Thanked 1 Time in 1 Post iTrader: (0)	Leasing really makes sense if you want to always have a new car - it works out much cheaper to lease for a year, then change the lease car, than buy a new car and sell after a year. However, if you want/can hang onto the car for longer, then buying and keeping works out better (in general). Even better is to buy a 1-2 year old car, then someone else has taken the depreciation hit. Courant

27th February 2008, 20:54	#15 (permalink)
gjackson Locking Wheelnut Join Date: 5th February 2008 Location: West Yorks Posts: 131 Thanks: 0 Thanked 2 Times in 2 Posts iTrader: (0)	As has already been said making out they want your used car is nothing more than marketing. Their plan is that you have convinced yourself you want a new car by the time you get to the dealer.

27th February 2008, 21:25	#16 (permalink)
DeanFYoung Supporter Magic Rear Seat Join Date: 19th June 2007 Location: Southampton Posts: 713 Thanks: 12 Thanked 7 Times in 7 Posts iTrader: (0)	You werent looking to change, they came to you. Don't feel you now have to change. But becuase of that, I'd simply ask for more of a trade in you are now seriously considering a change, why not? You werent looking to change, so you have nothing to loose and either way you carry on driving a Civic!

27th February 2008, 22:18	#17 (permalink)
grasey Supporter Triangular Exhaust Join Date: 16th December 2007 Location: Cardiff Posts: 220 Thanks: 0 Thanked 0 Times in 0 Posts iTrader: (0)	I would keep a new car at least two years.

27th February 2008, 23:04	#18 (permalink)
Orschild Triangular Exhaust Join Date: 7th January 2008 Location: Sweden Posts: 251 Thanks: 3 Thanked 5 Times in 4 Posts iTrader: (0)	Or until the warranties end

28th February 2008, 09:04	#19 (permalink)
l-noel Wine and cooking ! Rocketship door handle Join Date: 5th December 2006 Location: Roanne-France Posts: 1,328 Thanks: 4 Thanked 8 Times in 4 Posts iTrader: (0)	The minimum time I've owned a car was 5 years, I kept the others up to 8 years. At least the loss as been absorbed by the use I've made of it. Car are not investments but tools Btw, I've noticed that 2nd hand new Fiat 500 with low mileage are more expensive now than new ones !

28th February 2008, 09:59	#20 (permalink)
Foggy69 Vivid Blue Rocks!!! Rocketship door handle Join Date: 5th December 2006 Location: Westerham Posts: 1,102 Thanks: 4 Thanked 9 Times in 8 Posts iTrader: (0)	It seems strange that Honda would really want to draw peoples attention to the fact that you car is worth so much less after just one year. It could be perceived by the average buyer that Honda residuals aren't as good as they were led to believe. Making people think that maybe Honda, and the Civic, isn't quite as good as they were lead to believe BUT, if you compare it with the second hand prices of a VW Golf, considered one of the lowest depreciating cars in the class, then it shows roughly the same loss over one year as a Civic. And if you compare how much more you would have lost if you had bought a Focus (sorry TC) then you are over £1000 up on the deal, and on a 307, nearly £2000 up.