• Ash Habib

My Top 3: Used over New

Last week I went into detail about 3 cars where it was a particularly good idea to take a look at a brand new model vs. a pre-owned one. This week is the flip side of that coin; What vehicles can you get a particularly good value for money on the used market?


In order to start this section, let's go over some reasons why a vehicle would depreciate quickly. Vehicles from brands with poor reputations, reliability issues, or vehicles that have a demographic stereotype can all be reasons for depreciation. However, there's also one more reason that gets ignored, and that's vehicles that are consistently updated.


Where the Top 3 vehicles to buy new are all models that see infrequent updating, the vehicles on this list are in a constant state of topping not only their market rivals, but also themselves. Basically their resale value becomes an inverse function of their own achievements. Coupled with the fact that the first buyers of these vehicles are typically a little more fickle than average, means there can be some serious bargains to be had.


The Luxury Benchmark: Mercedes S Class


2013 Mercedes Benz S550

Vehicle features and technology are evolving at a more rapid pace than ever before. The Mercedes S Class is the benchmark that most vehicles are measured against in the industry. There's a fairly good chance that if you've purchased a vehicle in the last decade that it has a feature or piece of technology that debuted in the S Class. Mercedes pours an incredible amount of time, effort and energy into the S Class. What it learns from there not only builds the S Class, but trickles through the entire lineup.


Among Mercedes S Class firsts?


Ahem, (deep breath here), padded door trim for safety, airbag in steering wheel, padded dash, headrests designed to protect you in a rear impact, deeper channels to funnel water away from your windshield, crumple zones, ABS brakes as standard, turbo diesel engine, passenger side airbags, 3 point seat belts, seat belt pre-tensioners, traction control, stability control, ventilated seats, air suspension in a passenger car, adaptive radar cruise control, pre-emptive crash systems (systems that protect and react to a crash happening), infrared night vision camera, full stop radar cruise control, Magic Body Control (a system that uses cameras and sensors to read the road ahead and adjust the suspension for the best ride), double glazed windows, soft close doors, & wireless smart key fobs, among others that I've probably left out.


The story here is that the S Class is Mercedes' innovation hotbed. And like all technology, it moves in and out quickly. In 2004, I worked at a BestBuy and we got in a 63" 720p Panasonic Plasma TV for our display area. The retail price? $29,999.99 CDN. Today you can buy a 65" 4K LED TV starting at $550 CDN. I could buy 54 of these new LED models for the price of what that 1 plasma cost 15 years ago. And, much like that, the S Class is a victim of it's own innovation. People who buy an S Class brand new want the absolute bleeding edge of technology and luxury available, so when that no longer becomes the case, they upgrade to the newest S Class.


It's because of this, that the Mercedes S Class is generally regarded as the highest depreciating vehicle on the market. But, that allows you to pick up a 3-5 year old model for $50,000-$70,000 off of the retail price of a new model. And because it's the same body style as the current one, you'll look like you spent way more than you did.



The New Age: Nissan Leaf


2015 NIssan Leaf

Last year in the US, approx 17 million new vehicles were sold. Of them, only around 360 thousand of those were electric vehicles, or a little over 2%. The crazy thing is, that was actually an 80% sales increase over 2017. 5 years ago, that number was only a little over 100 thousand.


The Nissan Leaf was the best selling electric vehicle for the first few years until recently when Tesla managed to ramp up its' own production numbers. The Leaf was popular for a few reasons; Being a 5 door hatch style, it was practical, it's design wasn't overtly crazy or visually offensive, and it was one of the first vehicles offered by a mainstream manufacturer that felt like a regular car. There was ease in knowing you could go to a local Nissan dealership to get a part or a repair done if needed.


The very nature of electric vehicles bares a striking similarity to most technology. It doesn't matter whether it's still functional or not, people want the latest at greatest. Which is great news for pre-owned buyers.


You can pick up a lightly used 3-4 year old Leaf for $15-17K, about $25K less than what a new one would cost. And even base models include things like Bluetooth, Heated Seats, Heated Steering Wheel, USB Input, and power windows/locks.


As far a a daily driver/in city commuter car, the Leaf is a hidden gem.



The Bouncer in a tailored suit: BMW M5


2013 BMW M5

You ever meet someone that was good at everything they've every embarked on? The guy who somehow managed to be Prom King, Class Valedictorian, and Captain of the football team at the same time? You drop your kid off for karate class and see him there, so you go say hi, and it turns out he's also a 3rd degree black belt?


This is what every other car maker feels like when looking at the BMW M5. The original performance sedan, and it's been leading the segment for the last 30 years or so.


The M5 is the kind of car that you can drop your mother in law off at the airport in perfect luxury car comfort, and then race that red Ferrari on the way back. With 560hp available, 2013+ models will leave pretty much anything besides a prancing horse or other supercar staring at it's taillights.


95% of the time it's a regular 5 series, comfortable, luxurious, and runs under the radar. It fits 4-5 adults without an issue, and has a large trunk that can handle anything short of 4 kids worth of strollers. The other 5%? A maniacal lunatic, it feels like you've been strapped to a rocket. Keep a budget for rear tires on this one. Even with that in mind, 5 year old examples of this car are hovering around $40-45K CDN, from an original price in the $110-120K CDN range. That leaves a good budget for tires and gas.


The Warnings


Like anything else, buying pre-owned has it's cautions. If you happen to be looking at an S Class or BMW M5, a pre-purchase inspection is especially important. Being high tech and high performance also means higher than average maintenance costs. Just because these cars cost 60% less now, doesn't mean they cost 60% less to maintain.


With the Nissan Leaf, the obvious point is to check the health of the battery pack, which shouldn't be an issue for any Nissan dealership. The Leafs lack of other parts makes it one of the more reliable vehicles on the road. In Canada, Leaf sales were boosted by aggressive provincial EV rebates, so a larger portion of used units are located in the Quebec region, which is known to use harsher salts and gravel during winter, so getting the vehicle on a lift and inspected is especially important for vehicles in this region.

If you or someone you know is looking for a new vehicle, contact us at www.ashhabibautoconsulting.com/contact/ to book your FREE initial consultation! You can also subscribe to our weekly articles to keep up to date on the latest in automotive news!

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©2018 by Ash Habib Automotive Consulting.