How not to lose 30% the first year!

There are many sayings along the same tune: full of joy you pick up your new car at the dealership, and by the time you reach the street, it’s lost 30% of its value. With very few exceptions that used to be the case for more or less all new cars, and depreciation would then continue to eat into the remaining value like rust does to an old 70’s Opel, until some day you reach a bottom where values stabilize and if you’re lucky, even start to rise. You could say that my modest garage consisting of my beloved BMW 650i convertible 2014 and my no less loved RR 5.0 SC 2015, both bought in the last two years, were very much purchased along that logic (and if I dare say, pretty much at the bottom).

At least in some cases, what used to be true isn’t anymore, and we can of course thank the moving parts of the global mess we currently find ourselves in for that. The combination of broken global supply chains, the European energy crisis and inflation are starting to change things. I’ve written previously about prices for used cars being on the rise especially in the US. That trend seems to be softening, although it’s a bit too early to say. It’s still the case that delivery times have in some cases gone bonkers, but here as well things are looking slightly better for most cars, as the stress on delivery chains of certain parts have improved slightly. You’ll still have to wait far longer than used to be the case though. But lately, and the topic of this week’s post, is what is perhaps another logical consequence of the current situation, namely that certain new cars barely lose any value during the first few years.

The chip crisis is slowly easing, which is really good news for manufacturers!

It’s still perfectly possible to lose lots of money when buying a new car. An old man’s sedan is for example an excellent way to go about it, especially if you order it in a color scheme that may seem fun at the time of ordering, but far less a week after the car being delivered. Large Mercedes coupés with big engines are also pretty hopeless. Actually, with everything everywhere being about EV’s and with prices at the pump going only in one direction, you’d be forgiven for thinking that buying anything with a big, thirsty engine would be just as good (or bad). That’s not the case though, at least not yet, and it’s also not the case that all EV’s hold their value in the same way the best ones do.

Given that, and if we except the small series hypercars that live in a world of their own price-wise, what should you be looking at if you want a cool, everyday car and prefer buying new, but want to minimize the initial value loss? I’ve taken a few examples below from the SUV world which continues to be the preferred car segment everywhere, and which is therefore a relatively safe bet in this regard.

There’s three different body formats now, from 90 to 130 to choose from

New Land Rover Defender

It was no easy task that Land Rover took on when they decided to build a new version of one of the most legendary cars of all times but in my view, they did an excellent job with the new Defender. I think it balances references to the original car with modern features in just about the right proportions, and apparently the market agrees – not only do you see a lot of new Defenders around, their resale values are excellent. In Europe, when the car was introduced in late 2019 in a version called the First Edition, these 2019 cars today trade only around 10% lower than their original price of around EUR 100.000, in spite of a minor upgrade having just taken place on the 2022 Defender. For now at least, the car that’ll take you anywhere seems to be a safe bet economically as well!

The G63 could also take you most places – it’s just that it never does…

Mercedes-Benz G63 AMG

If Land Rover’s task with the new Defender was daunting, arguably what Mercedes had to do to turn the G-wagon to a modern car (as much as possible) was no less so. It was a year earlier in 2018 that the new G was introduced, and still today you need to look twice to see the difference between old and new – at least from the side. Absurdly enough, the vast majority of new G’s are in the G63 AMG version, that an article I recently read described as “Kardashianesque”, a description as good as any. Few cars have the same street presence though, and 585 hp in car looking like a fridge will keep you laughing all the way to the petrol station. Provided you still see the road that is, because with its completely flat front window, the G63 kills bugs at a speed making you fear bug extinction. Still, should you for some reason want to sell your G63, you’ll be happy to learn that even cars from the first year with moderate km’s on the clock sell for within 10% of their price as new of around EUR 220.000.

The only SUV that looks good in yellow – and many other colours!

Lamborghini Urus

If 585 hp in an SUV isn’t enough for you, then Lamborghini are happy to give you another 65 hp, rounding it off to 650 from the Urus’s 4-litre, 8-cylindre engine. Its looks take more or less getting used to depending on your taste, but the Urus is one hell of a car and no doubt the SUV that drives the most like a sports car. And of course, being a Lambo, it delivers in terms of sound like few others. The Urus was also introduced in late 2018 and costs a bit more than EUR 300′ as new. 2-3 years later without too many kilometres on the clock you will have lost no more than 10%, and it will have been worth everyone of them!

Three examples out of a selection that could clearly have been wider and that illustrates that at least right now, you can buy at least some new cars and not lose much in terms of value even after 2-3 years. If you’re interested in any of these or for that matter other cars with a similar evolution, then the recommendation is of course to buy new, provided the car you’re after can be delivered within a reasonable timeframe. A discount that isn’t larger than 10% doesn’t compensate for neither the compromises in equipment you may have to make, nor for the typically much shorter guarantee you’ll have on the used car.

The Model X hardly sells anymore in Europe, but has fantastic residuals!

What about EV’s then? Isn’t that a safe bet when it comes to resale values? With everything happening in general in terms of clean energy, and in the EV market in particular with new models both from new and old brands, you’d certainly be forgiven for thinking so, but actually the picture is a mixed one. The champion in resale values is no doubt Tesla where the 10% value loss discussed above goes even further in terms of mileage or even age. Had you bought an Audi E-tron instead, perhaps convinced by the fact that in everything except for the range it’s a better car, well, then you would have lost almost 50% in the last 2-3 years (making the E-tron a really great bargain today!). Mercedes’ EQC EV SUV doesn’t fare much better, and there are other EV’s in both camps. At least for now therefore, value preservation seems to be more brand-related than depending on the drive train, and part of Tesla’s strong resale value probably also relates to the Apple-like image the brand has among many.

Where does that take us? Well, if you’re after a SUV and you’ve been looking at one of the three mentioned above, it looks like a relatively good investment even if you’re changing cars now and then. However, as the disclaimer says if you buy a financial product, “past performance is no guarantee for future returns”, which is of course especially true now with an energy crisis in Europe and a general trend towards electrification. Remember though that this will take time, and there will conventional cars around for many years to come. If you’re looking for an EV, the resale value and the range speak strongly for Tesla, but it will require you to compromise in build quality compared to some other EV’s, and the competition is no doubt heating up. Personally, I still think a good bargain beats anything presented here, and if I were after an EV, I think I’d go and look closely at that bargain Audi E-tron!

The ugliest super-SUV competition is on!

Taste is a subjective matter and if you think it isn’t something that should be discussed in a blog, then feel free to stop reading now, as the below are my very honest thoughts on the increasingly hot competition “Ugliest Super-SUV”.

This week Aston Martin joined the other supercar/luxury brands Rolls Royce, Bentley and Lamborghini in launching its first ever SUV. And keeping in the tradition of the others, it’s not pretty. Upfront it’s a strange mix of a Cayenne and a recent Mondeo, from the side the Cayenne also comes to mind, as do current Mazda SUV’s, and from the back, the elevated lip is intended to remind us of the current Vantage (which by the way, I also find less than convincing), but actually looks more like someone gave it a good uppercut. This is all the more extraordinary given on one hand the fantastic designs Aston have spoiled us with ever since the DB9 (until the Vantage) and on the other, the fact that they developed this car from scratch, on a completely new platform, and thus had all the freedom in the world. And yet, this is all they managed to come up with.

The Aston Martin Mondeo

Having said that, Aston joins a club of designs that are far from convincing. I spent a long time studying the RR Cullinan really closely in Geneva in the spring, but that somehow only made it worse. The Audi, sorry, Bentley Bentayga is a rather common sight but the more I see it, the more I interpret the front as a huge pair of frog eyes, suprised at the fact that the car they’re on looks far worse than its cousin, the Q7. The Lamborghini Ursus is spectacular alright, but good-looking? Probably to those that are into stealth planes, but not really those into car design. So with such friends, maybe Aston comes out on top after all?

In 2022 Ferrari will complement the others with its first ever SUV. Expectations are rather low by now, but if they bring us a car that has the slightest resemblance to their current line-up, it won’t be difficult to claim the title of least ugly super-SUV.

Do you agree? Do you disagree? Let us know in the comments!

If this is how the Ferrari Purosangue comes out, there’s hope!

Lamborghini visar URUSel SUV

Nu visar Lamborghini bilder på sin kommande SUV. Den heter Urus och visas i konceptform på bilsalongen i Beijing. Lamborghini har iofs lite SUV-kred tack vara LM002 från 1986, men bilen känns i vilket fall helt onödig, i mina ögon.