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8-12k/32% First Year Depreciation?!

7K views 25 replies 15 participants last post by  Kadena 
#1 ·
Looking at the depreciation of my 2016 Toyota Avalon and it dropped 32% in less than six months from 29000 paid to 20000 USD.

Very disappointed in the value drop. Hoping it levels off...
 
#2 · (Edited)
yeah I have a buddy who just went off lease on '15 or '16 camry and the residual was so low the dealer didnt even want it for a lot used car, letting it go back to toyota and then eventually an auction. dealer said he can get same car at auction for 3-4k less. (K meaning thousand) I know, its hard to believe............thet are not all that bad, overall as a brand toyota is very high, google tacoma and FJ resale value, Done now but the FJs hold 91% its crazy.

dont always believe what you hear, I like checking Autotrader for locally available same year and trim. it gives a more accurate market value, I hardly ever trade in my cars, I always keep the buying and selling separate. even the tax implications can be diminished when you sell at a fair price instead of taking it up the tailpipe trading at dealers.
 
#3 ·
Buy Used

Looking at the depreciation of my 2016 Toyota Avalon and it dropped 32% in less than six months from 29000 paid to 20000 USD.
Good reason to purchase pre-owned. I've found 2 year old lease returns are among the best deals. You generally get a very well cared for vehicle with most of the latest features and someone else has taken that giant first year depreciation hit.

Cheers
 
#5 ·
that's why i did a 16 leftover, sticker was 36k bought it for 26,900,i never purchased a new car before,but i worked for dealers for years and seen this a lot,if you think that's bad buy an american labeled car and watch the value.i'm not sure why the Avalon is not a real popular car but i really like the ride and comfort but they could be replacing it with a high level Camry seeing that there make it a little larger for 18,witch was my issue with the Camry,we all loose value off the sticker price but trading or selling every 3 years on a leftover can be economical if the right deal can be made
 
#6 ·
I have always heard of 20-30 loss when you drive it off the lot.
I expect that people that buy this car are going to keep it for longer than 5 years.
I also expect that people that are concerned with resale are leasing the car with guaranteed with return values.
 
#7 ·
Yea, worked in my favor a year ago when I got my '14 Touring with 16K miles for < $24K. Part of my speculation as to why is many people (typically older demographic) who got the '13+ are disillusioned with the ride and comfort, expecting it to be cloud-like soft as were previous models, resulting in a lot of low mileage late model Avalons on the used car market.
 
#10 ·
Looking at the depreciation of my 2016 Toyota Avalon and it dropped 32% in less than six months from 29000 paid to 20000 USD.
Most Toyota cars (not trucks/suv's) depreciate heavily the first 2 years and then slow drastically years 3-5. This is largely because Toyota whores their cars out to fleets in huge numbers which puts tons of 1-2 year old models into the market. That's fairly common for most brands that sell to fleets. Honda comparatively sells far fewer to fleets and their year 1-2 residual is pretty strong.

That being said, the numbers you list above seem a bit worse than I would expect. The only way I can find a trade value around $20k on a '16 Avalon is for the base "fleet" XLE with 15k miles on it. And if you do have a base XLE you surely paid less than $29k for it. Does the $29k include tax/fees/etc? Those costs normally wouldn't be rolled into the calculation.
 
#14 ·
That has not been what I have heard at all. The dealers always told me the opposite, that Toyota doesn't sell to fleets and if you see a Toyota taxi etc they bought it from a dealer for a deal they worked out. No special "Classic Malibu" rental models Or "Police Caprice" models made just for them long after they have retired that generation from the showrooms.
 
#12 ·
All new cars depreciate rapidly. It's a consumable machine made out of consumable parts engineered to fail after a certain time-span ensuring the consumer goes back and buys a new replacement. IF cars were made out of higher-quality materials, they would last 'forever', thus keeping their value, this putting Toyota out of business...

Planned-obsolescence, invented by Chevy, perfected by Ford, now a staple of the 2nd industrial revolution ensures that nearly everything loses it's value rapidly.
 
#13 ·
Actually.... I don't agree. Modern cars, particularly Japanese cars, last for a very long time if properly maintained. My previous car was a 1998 Lexus ES300 which I had for 16 years before I bought my Avalon and it now belongs to one of my sons. It is a daily driver, now almost 20 years old, and still looks and runs almost like a new car -- quiet, smooth and reliable, with no mechanical issues at all. My own 2013 Avalon Limited remains perfect inside and out with no flaws or problems of any kind in 40,000 miles and I expect to keep it indefinitely. I think its life-expectancy is considerably longer than my own.

Depreciation is an issue only if you plan to sell your car within a few years of purchasing it. If you keep it for many years it is worth far more to you than the low resale price. I can't agree with your idea of "planned obsolescence", and I believe contemporary cars are in fact built of high-quality materials. People buy new cars every few years not because their cars are falling apart, but because of style, appearance, new entertainment features, and plain old ego gratification, IMHO.

Robert N.
 
#15 · (Edited)
I could look but msrp for an xle is 32,500 iirc I got about 4k off msrp. So it was about 27.5-29. They gave me 27k for a range rover 2011 supercharged (I did buy the RRs used) and they wanted to give me 25 or so I think it was an ok deal. Not the best on a new 2016 xle.

I have seen some Avalons for rent but I didn't buy an ex rental so I think my title is accurate. It seems worse than I was anticipating of around 4k-6k per year which I had on my Prius and former Range Rovers.
 
#18 ·
The trade muddies things up. An XLE with no options should have sold for around $27k. They showed you more on the Rover and less discount on the Av. Garbage in garbage out. If you bought at ~$27k, the depreciation is a lot closer to what I would expect for the first year of a model that has a lot of fleet sales. I think $20k is a little light too in the real world. Probably $21k unless you have more than 15k miles on it. I buy a ton of vehicles for my biz so I keep up on the market fairly well.
 
#20 ·
Research, lots of it.

We had a 2015 Camry that we leased and loved the car, it was more comfortable that our previous 2012 Camry and we averaged over 35 MPG with many trips being 40 MPG. Value on that car was $2K less than our buyback so we let it go back. We purchased a 2016 Avalon Touring and love it. We were going to lease again but opted to purchase knowing the big hit up front in the first year or two but they do seem to settle down and hold their value after that.

While I love to save a bundle on purchases I am VERY particular about my vehicles, and any imperfections eat me alive when looking at preowned. That being said, my vehicles are usually spoken for before we even sign for the next one. I am willing to take some loss to know how my stuff is treated from day one.
 
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