2005 Depreciation Rate

Stangston · Jul 15, 2004

Ok, so this is probably not a topic all the new buyers want to think about, but here's a dose of reality.

How well do you think the 2005 Mustang (particularly the GT) will hold its value, specifically in comparison to the 1999-2004 generation?

I was just thinking....I picked up my 1999 GT virtually new in early 2001 for about $16k, when it had stickered at $26k new. Considering the car was only about 1.5-2 years old, that's some rapid depreciation.

So do you think 2005 GT's will be available for $17k or so in late 2006?

SVTdriver · Jul 15, 2004

Maybe.

scottie1113 · Jul 15, 2004

Probably. Most new cars depreciate rapidly in the first three years, then taper off after that. After five, its more gradual. Some cars experience less of a hit, but let's face it. The Mustang is a mass produced car, and even the special editions are not immune to the loss of value.

Because of the volume produced, even the so called limited production classics haven't been very good investments. Compare their so called appreciation rates with something like a mid 60's Ferrari and you'll see what I mean. Panteras are in the same boat.

But hey, that's not why we buy these things, is it?

SVTdriver · Jul 15, 2004

It goes back to that whole thread about buying as an investment. You just don't do it with a gt.

scottie1113 · Jul 15, 2004

Let alone most cars. Buy for enjoyment.

Stangston · Jul 15, 2004

True.

My thoughts were that many considered the 1999-2004 a refreshening of the previous generation. The interior, chassis, and many of the components were recycled, and the overall styling just appeared updated.

As a result, maybe an argument would be that the 1999-2004 was partially stale (especially to an owner of a 1997 or so) the day it was released, and there was less of a "buzz" surrounding it than the 2005. Therefore, the value would depreciate faster.

The 2005 promises an all-new design, interior, chassis, components, etc., or possibly a revolution in Mustangs. Therefore, if the media hyped this car and its updated technology enough, maybe the value of the car would hold up better, especially in its first few years of release.

I guess it all depends on how well the car is received by media, reviewers, and consumers. If it's just another Mustang people see on the road, then I'll be able to afford one in '06.

PimpDaddyGT · Jul 16, 2004

Yes, it's a mass produced American car. It will depreciate rather rapidly, especially in the first few years. There will be tons made, so I don't see it being any better than the previous generation. Buying a newer Mustang is not an investment (even a Cobra), so you can't think of it that way or you will depress yourself. But, on the bright side you can pick up a great deal on a 1-3 year old one with low miles. If you buy new, plan to keep it for a long time and you won't have to worry about resale. Otherwise, if resale is a big issue, buy a Honda.

Eric

ryanrule · Jul 16, 2004

depends how much people think its worth. if theres a bunch of recalls in the first year there will be alot of depreciation, as people will think its a pos

Z28x · Jul 16, 2004

I don't think the new GT will go down as fast as the old GT at first. The people that will get burned really bad are the "got to have it first" group that will pay MSRP for them.

Unless you are buying a end of year left over, buying a brand new car is never a good investment.

Razinhell · Jul 16, 2004

Every car that i have ever owned is used. My next car will be new. I think you can't look at it that way. When you buy cars its a big investment and almost alway a loss. Even when you buy a used car you will buy it at a loss. In some cases you can buy a car and sell it later for profit, but usually that covers classics and rare model.
Get it because you want it, you can afford it and its going to be only yours. Yeah you may spend extra cash to get it new, but its yours. Stop thinking of cars as retirment investments. If you want a car exactly the configuration you want it in then buy new. If you could care less about what colors you want and just want to play it lucky, then wait for a used one. Your choices are limited when buying used. Your choices are limitless when buying new.
Overall Mustangs have a decent depreciation value. Even 93's and older stangs hold a decent price over other cars made in the same year.

HuskerCobra96 · Jul 16, 2004

I paid 26.2K in 1996 For my Cobra Vert, new off the lot.
Sold it for $12k a month ago. The GT's depreciate much faster and deeper than the cobras, but the 2005's will hold their value slightly better than the old GT's for the fact that they will be a better all around vehicle.

If you are thinking about selling your SN95 here anytime soon, sell now before the prices go down the toilet, as they are dropping by the minute. The 1996-2001 cobra's are in the same boat.

351CJ · Jul 18, 2004

Stangston said:
I picked up my 1999 GT virtually new in early 2001 for about $16k, when it had stickered at $26k new. Considering the car was only about 1.5-2 years old, that's some rapid depreciation.

Sticker price means nothing. The ONLY thing that is important is what were 1999 GTs actually selling for after discounts and rebates at that time. Figure depreciation of of actual selling prices not sticker.

For the 05's initially prices will stay higher, even on the used market because they will be selling without rebates. But this is a mass produced car that will be built in quantities of 180,000+ per year. Eventually supply will catch up to and exceed demand and used prices will drop.

Worldwide there is far greater production capacity than there is buyer demand. Simple economics, supply exceeds demand so prices drop. Manufactures have to offer huge rebates and low cost financing to move the iron. The Japanese, Koreans & Chinese are building more assembly plants, so vehicle supply will keep increasing which will put even more pressure on used car prices. This over capacity will even affect the new Mustang.

Razinhell · Jul 18, 2004

HuskerCobra96 said:
I paid 26.2K in 1996 For my Cobra Vert, new off the lot.
Sold it for $12k a month ago. The GT's depreciate much faster and deeper than the cobras, but the 2005's will hold their value slightly better than the old GT's for the fact that they will be a better all around vehicle.

If you are thinking about selling your SN95 here anytime soon, sell now before the prices go down the toilet, as they are dropping by the minute. The 1996-2001 cobra's are in the same boat.

Thats not a really bad price for a 8 year old car. I think everyone needs to remember that all cars are worth as much as the next person is willing to pay for it. If you think of car depreciation based on the cars around you will see that the Mustang holds it's ground for the type of vehicle it is. Flashy muscle cars don't appeal to everyone. So you limit the amount of people willing to buy it.
If you bought a Hyundai Accent back in 1996 and tried to sell it a month ago i bet you couldn't get more then a grand for it. 12K car at 8 years would sell for 1K. A 26K car 8 years sold for 12K. So the Accent would retain 8.3% of its value over those 8 years and that was being generous. While your Cobra retained 46% of its value.

DeadHead23 · Jul 18, 2004

Every car that i have ever owned is used. My next car will be new. I think you can't look at it that way. When you buy cars its a big investment and almost alway a loss. Even when you buy a used car you will buy it at a loss. In some cases you can buy a car and sell it later for profit, but usually that covers classics and rare model.
Get it because you want it, you can afford it and its going to be only yours. Yeah you may spend extra cash to get it new, but its yours. Stop thinking of cars as retirment investments. If you want a car exactly the configuration you want it in then buy new. If you could care less about what colors you want and just want to play it lucky, then wait for a used one. Your choices are limited when buying used. Your choices are limitless when buying new.
Overall Mustangs have a decent depreciation value. Even 93's and older stangs hold a decent price over other cars made in the same year.

I totally agree with razinhell because to some people, me included, it's important to have the car that YOU want, especially if you are going to be keeping it for a while. I know I'd rather spend a few more bucks for what I want instead of setteling for a used car where I have to compromise some of the colors/options I want. Well said razin

Stangston · Jul 18, 2004

351CJ said:
Sticker price means nothing. The ONLY thing that is important is what were 1999 GTs actually selling for after discounts and rebates at that time. Figure depreciation of of actual selling prices not sticker.

Whoa there, down boy!

You are correct, and I did realize that. The problem is that I didn't buy my 1999 GT immediately when it was released, so I can't tell you what people were paying then. Thus, the data I had was sticker, and it has great meaning.

If people were immediately saving $2000 when the 1999's were first released, that's an $8k loss in 1.5-2 years, and so forth.

Clarification about this thread:

This thread is not intended to scare those buying a new '05. It's not claiming that Mustangs depreciate slower or faster than other cars. It's not saying that you should spend your family fortune buying fleets of 05's and storing them in rental garages as investments.

It is perhaps about speculating whether someone could pick one up in 1-2 years for $16k just like the previous generation Mustang.

Z28x · Jul 19, 2004

The V8 cars seem to hold value a lot better than the V6 Mustangs too.

66Satellite · Jul 19, 2004

Yeah, I'll be buying an 05 GT when they get down to about $10-12k. I don't expect I'll have to wait too long. Buying new car just doesn't make much sense to me--I'm not too hung up on options or color. Meanwhile my Satellite seems to be appreciating at a rate of about 20% per year...

351CJ · Jul 19, 2004

66Satellite said:
Yeah, I'll be buying an 05 GT when they get down to about $10-12k. I don't expect I'll have to wait too long. .

It all depends on your definition of "long". You'll have to wait 5 - 6 years to be able to get a good condition reasonable mileage GT at that price.

66Satellite · Jul 20, 2004

351CJ said:
It all depends on your definition of "long". You'll have to wait 5 - 6 years to be able to get a good condition reasonable mileage GT at that price.

Sounds about right. That's nothing compared to the amount of time I've had to wait for Detroit to build a modern car I'd actually want to buy.

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