Does an Acura lose more value after 80,000 miles?
#1
Drifting
Thread Starter
Does an Acura lose more value after 80,000 miles?
When I traded in my CL-S to get the TSX, the dealer told me that an Acura loses extra value after it hits 80K miles. Is this true? He said it was because the car can no longer be Acura Certified. Can any dealers chime in on this one?
#2
I'm not a dealer, but that is true. It's not so much that it loses value in general, but the Acura dealer won't pay you as much for it because he can't sell it as "certified pre-owned" (in keeping with their "only well-maintained late-model Acura vehicles are even considered" policy). If you sell to anyone else it doesn't matter.
#4
Suzuka Master
It is not anything to do with a particular car line. The major reason why a car takes a hit on it's value after 80k is that primary lenders will not finance a car that is past the point of 6 years of age or 80k miles. It is, in their opinion, a high risk loan. In order to certify an Acura, the car has to be under 80000 miles or 6 years of age, just like bank rules. It cannot have a salvaged title. Then it goes through the inspection...Pull out your white gloves and magnifying glass.
#6
Suzuka Master
In some ways, buying certified is a good idea. You get an extension of the remaining 4/50 Acura warranty (so it goes from 4/50 to 5/62), you get the roadside assistance program (TLC), and you get a powertrain warranty (7/100). You also have the piece of mind in knowing that the car passed a pretty thorough examination to assure you that this car is mechanically sound, has it's maintainance in check, and has all service bulletins updated. So, yes, I guess you could say it's a good deal.
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#9
Burning Brakes
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i think its more or less of a gimik the dealers play to engourage you to not trade your high milege car in because they know its going to be hard to get rid of. your always better off selling a car like that locally in the paper
#10
About depreciation:
I dusted off my accounting textbook from some years ago.
Using a couple of depreciation methods...the TSX invoice is $24,961 and obviously a dealer is not going to buy a used car from you for more than they can buy a new one from Acura
With the "Sum of the Digits" depreciation method, and assuming a 10 year life and a $5000 salvage value, (10/55) x ($24,961-$5000) = $3629 first year depreciation. So $21,322.
Using the "declining balance" method, with the same assumptions, (1/10 x 2) x ($24,961)= $4992 first year depreciation. Or $19,968.
The point is that depreciation is not linear, so the biggest depreciation "hit" is taken when the car is newest. So it's typical for buyers to owe more on a car than it's worth during the first year.
You're even better off selling a low-mileage "creampuff" privately than a high-mileage beater! It's going to be much easier and in either case the dealer exacts his "pound of flesh". You can check it out - according to kbb.com the difference between dealer trade in value and "private party" transaction value for a '01 Integra GSR 4-door with 36k is $1965. With 72k the difference between trade-in and private value is still $1965, although the seller will take a bigger depreciation loss because of the mileage.
How much is your time worth?
I dusted off my accounting textbook from some years ago.
Using a couple of depreciation methods...the TSX invoice is $24,961 and obviously a dealer is not going to buy a used car from you for more than they can buy a new one from Acura
With the "Sum of the Digits" depreciation method, and assuming a 10 year life and a $5000 salvage value, (10/55) x ($24,961-$5000) = $3629 first year depreciation. So $21,322.
Using the "declining balance" method, with the same assumptions, (1/10 x 2) x ($24,961)= $4992 first year depreciation. Or $19,968.
The point is that depreciation is not linear, so the biggest depreciation "hit" is taken when the car is newest. So it's typical for buyers to owe more on a car than it's worth during the first year.
You're even better off selling a low-mileage "creampuff" privately than a high-mileage beater! It's going to be much easier and in either case the dealer exacts his "pound of flesh". You can check it out - according to kbb.com the difference between dealer trade in value and "private party" transaction value for a '01 Integra GSR 4-door with 36k is $1965. With 72k the difference between trade-in and private value is still $1965, although the seller will take a bigger depreciation loss because of the mileage.
How much is your time worth?
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