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Originally Posted by larryshomework
You can get a hint at depreciation by looking at lease terms on new cars.
BMWs have residuals in the 60-65% range after 3 years. This is strong but it still shows a drop of 1/3 after 3 years.
Many cars have 3 year residuals in the 52 - 57% range.
Sometimes the residual is inflated to get lower (subsidized) leases but across the model line they generally indicate the anticipated depreciation rate -- 5 years out, most everything is going to be below 50% of original value.
My 2002 Box was 48% of original value when I bought it and was between 5 and 6 years old. That doesn't seem like excessive depreciation to me.
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I agree with this as in general I find all cars depreciate within a couple of points of each other when years and mileage are constants. The problem is that 50% depreciation on a $60k car
seems worse than the same depreciation on a $30k car