Because they are more expensive to begin with and a large portion of this additional cost is attributable to the “intangibles” that come with luxury automobiles, luxury cars degrade faster than regular cars (i.e. the prestige associated with owning a car from a brand like BMW, Audi or Mercedes-Benz).
The extra amenities and performance of a new luxury car aren’t worth the price premium over a basic car, according to the great majority of car buyers. For instance, a new BMW 5 series is probably not worth twice as much as a Toyota Camry to the majority of automobile buyers (although this may surprise petrolheads). For all practical considerations, the Camry is equally as capable of serving as a daily driver; the additional performance and badge status are largely subjective. In fact, because the Toyota has a solid reputation for dependability, many regular car customers prefer it to the BMW.
The gap between new consumers and those who buy used products is fairly wide, which puts downward pressure on prices even though the new buyer may find real value in the intangibles that come with buying a new luxury.
The adage “the bigger they are, the harder they fall” has probably been heard by you. This holds true for the cost of luxury cars as well, particularly luxury sedans.
In This Article...
Summary
An automobile’s value typically declines over time. BMWs, on the other hand, experience a far faster and more severe loss in value than other makes of cars. As a result of German government regulations, biodegradable rubber might be a factor. There are a variety of reasons why BMWs depreciate so quickly. As a result, you must take into account each car’s depreciation value before making a purchase.
It will be simpler to sell the car if you take this action. When buying a vehicle, take depreciation into consideration.
7 Series BMW
The BMW 7 Series loses value at an alarming rate, claims iSeeCars. This expensive model loses 72.6% of its original value in five years. Up to $73,038 less than the cost of a new automobile.
If you adore the BMW 7 Series, it can be a good idea to look at used cars. On lightly used models, you can find some great savings. It’s actually probably advisable for consumers who want to save money to seek out a pre-owned 7 Series rather than going all-in on a brand-new one because of the high rate of depreciation.
Why Do Used BMWs Cost So Little? (Explaining Fast Depreciation)
On this site, we’ve written a lot about opulent BMW vehicles. In recent weeks, we have mostly concentrated on their affordability, reliability, and maintenance costs. We’ll combine these studies today to provide an explanation for why secondhand BMWs are frequently less expensive than models from other luxury automakers:
After ten years, BMWs typically have a residual value of 24 percent, which is lower than the 28 to 35 percent of other premium automobile brands. Because many used BMWs have shorter lifespans and more issues than other automobile brands, which leads to higher annual maintenance expenses, used BMWs are this inexpensive.
That, however, hardly provides a comprehensive response to the topic. To demonstrate how quickly BMWs lose value, we’ve compiled data from several sources and produced visualizations for you to view below. In addition to comparing BMWs against other brands, we also contrast a number of BMW models with one another. Finally, we go through why BMWs are less expensive than other manufacturers and which BMW would be the greatest choice if you were in the market. Read on!
Depreciation of BMW
A brand-new BMW is typically not a wise investment, unless you take enjoyment and nice aesthetics into account. New BMWs typically degrade quickly after being driven off the lot and are ranked near the bottom of the luxury rankings. It depends on the BMW model you’re looking at, much like with the other German premium brands (Audi, Mercedes-Benz). It will ultimately depend on the model and body type you are thinking about, so do your research. The 7 Series should be avoided because the resale figures aren’t great.
Our top choice for the BMW model year with the best value is the 2017. The 2017 would cost you, on average, 59% less than it did when it was brand-new, and it would still have 58% of its usable life left.
For the BMW models, the 2018 and 2020 model years are especially appealing and offer a respectable value. Our rankings take into account a number of variables, such as the original new price, the current price, maintenance expenditures, and the remaining years of anticipated overall spending. Our top-ranked model year is the BMW model that offers the best value for the money.
Do BMWs lose value over time?
Within the first two years, around 25% of that depreciation takes place. A five-year-old X3 should cost about 40% of its original MSRP, however predictions for BMW value over time always shift from year to year.
Do BMWs depreciate quickly?
The seven brands listed in the illustration below were chosen for a specific reason. We believe it is only fair to evaluate BMW against these companies. These companies all provide the same kind of experience (a high-end experience and performance). It wouldn’t be fair to compare a BMW to a Honda or a Kia because these brands cater to quite distinct demographics of consumers.
According to our analysis, BMWs do actually lose value more quickly than other luxury automobile brands. On average, BMWs lose about 23% of their value in the first year. Other auto brands lose more than the 12 to 20% (although Porsche also loses 23%).
A BMW typically has lost 45% of its value after five years. Other automakers have lost between 39 and 47% of their value, therefore the depreciation rate for BMWs after five years is comparable to that of their rivals.
BMWs begin to lose value more quickly than most other automobile brands after five years, though. For instance, after ten years, the value of a BMW has decreased by 76%. The worth of the other automobile brands, on the other hand, has “only” decreased by 67 to 72%. Only Lincoln scored worse; at this moment, the value of these vehicles has decreased by 79%.
Overall, we can conclude that BMWs do indeed lose value more quickly than other premium automobile brands in the first year. All of the brands of cars that were studied have depreciation that is essentially the same after five years. BMWs do, in fact, decline significantly more quickly after five years, leaving them with less residual value than other premium automobile brands at the end of their useful lives.
Why are BMWs so costly?
German motor industry behemoth BMW has a storied history spanning more than a century.
However, while being considerably more expensive than comparable Japanese manufacturers, BMWs are frequently thought of as being unreliable and difficult to repair.
BMWs’ design and construction are primarily to blame for their high price. BMW vehicles are built for luxury, elegance, and performance, like the majority of German automakers. Their luxury status, high-quality construction, safety, comfort, and well-tuned engines all contribute to their astronomical price tags.
Continue reading to learn why BMWs are so expensive, whether they are worth the money, and how much insurance you can expect to pay.
What BMW retains its value the best?
The BMW X3 model years 2015, 2014, and 2013 have some of the highest resale prices. The typical price for a pre-owned 2015 BMW X3 is about 40% of the sticker price. The BMW X3 has obviously only gotten better with time, and the most recent model should keep its worth at an even better rate.
Are BMWs too expensive?
Compared to other executive German automobile companies like Audi and Mercedes, BMWs are not pricey. Due to pricing competition amongst these manufacturers, BMW must continue to be competitive.
BMWs are priced similarly to other premium manufacturers that are likewise famous for their quality, comfort, and performance when compared to their competitors. They are frequently less expensive than some other high-end European manufacturers, such as Jaguar and Maserati, nonetheless.
The company uses high-end components and cutting-edge design to justify its price tags, and it keeps developing its vehicles at the rate of an innovative, forward-thinking corporation.
BMW continually adds new models to its lineup, innovates, and invests in cutting-edge technology. This enables the German manufacturer to keep its automobiles appealing and maintain their appeal as luxurious vehicles with each new generation.
Do BMW or Audi retain their value better?
According to Darryl Jacobson, managing director of True Price, BMW automobiles have the lowest resale value, Mercedes-Benz vehicles are the best, and Audi vehicles fall right in the middle of the two main German automakers in terms of resale value. His conclusions are supported by an examination of True Price data.
Why are BMWs deemed unreliable by some?
On this site, we’ve produced in-depth articles about a number of BMW vehicles as well as the premium brand as a whole. To determine whether BMWs are as unreliable as the general consensus will have you believe, we will now combine all of our prior studies. Let’s begin with a brief response:
BMWs are unreliable because they require unexpected maintenance more frequently (about once a year) and have a greater than average chance of experiencing a serious issue (approximately 15%). In addition, some vehicles only last between 110,000 and 140,000 miles, and a BMW’s average yearly maintenance costs of $968 are more than the $646 average.
That, however, hardly provides a comprehensive response to the query. We’ll go into more depth about every piece of information listed above below. We’ll start by talking about BMW’s reliability in comparison to other brands. Next, we’ll discuss a BMW’s possible lifespan. In addition, we’ll compare the average cost of BMW maintenance to that of other brands and determine which BMW models are the most and least dependable. Read on!
Are BMWs now trustworthy?
Fortunately, ratings of BMW dependability from several organizations support that excellent reputation: Customer Reports Every BMW in the lineup received a score above average in the 2020 rankings. The i3 electric car and the X6 midsize SUV are BMW’s most reliable models, and the brand as a whole is ranked seventh.
What specifically is wrong with BMWs?
Overheating engines, gearbox troubles, oil leaks, and fuel pump issues are a few of the most prevalent BMW issues.
A
Even while we nowadays tend to hope for (or at least anticipate) few to no issues when purchasing our cars, there are no flawless automakers. Even the most reputable manufacturers create cars that unlucky buyers have problems with. A
Will a BMW endure ten years?
However, those projections do count on the consumer using the product on a relatively average basis. High usage drivers may find that their BMW doesn’t last as long, while less frequent drivers may find that their BMW lasts longer with proper maintenance procedures.
A BMW should normally last between 100k and 150k miles in terms of mileage. Although some do reach 200k miles or even more, that is more than you should anticipate from the majority of their lineup.
Not that it’s impossible, mind you! Maintaining your vehicle well will help it last for a very long time.
Although a BMW outperforms the industry average in terms of durability, it falls short of some of the top automakers for the majority of buyers.
Do used BMWs merit the cost?
BMW is renowned for producing some of the best driving machines the world has ever seen, yet the majority of mechanics will advise you to steer clear of pre-owned models.
Once upon a time, BMW was a renowned automaker, a premium German brand with a lengthy history and an amazing collection of vehicles crisscrossing the globe. Sadly, though, circumstances are now different for the employees at the Bavarian Motor Works. The brand has been permanently damaged with prior owners and do-it-yourselfers due to an emphasis on producing mass-market automobiles that don’t age well.
August 2021 revision: You’ll be delighted to know that we’ve updated this post and go into more detail about the many issues a Bavarian automobile owner may run into if they decide to purchase a used BMW. This should assist you in making the greatest choice for your upcoming automobile purchase.
The majority of knowledgeable owners and mechanics will advise you to avoid used BMWs, especially those manufactured within the previous 20 years or so. Simply put, they are not worth the money you will undoubtedly have to invest in them. They are expensive to repair, have expensive replacement parts, and require a lot of labor.
They certainly have a cool appearance and a certain charm. But when you force personal checks to pour in at the neighborhood Euro repair shop, that beautiful siren tune will finally hit a string of unfavorable notes. Here are 15 compelling arguments against buying a used BMW.