[Tk718]

Hi everyone. I’m trying to see how much depreciation the m5 base incurs. A dealer is selling a 2022 cpo m5 base with 11k miles for $86,xxx. The blue book value for retail is 87k.
However when I check the trade in value to see how much the car really lost if I was to sell it after two years , I get $72k.
That’s a huge difference and this means if the Msrp on that car when it’s new is around $110k (base with executive package ) , the car depreciated $38k in two years. Am I getting this math right ? Or I’m missing something. Please help me understand. Thanks

[jnotrom711]

Well... yes there is some definite errors in your methodology, and likely not in your favor...


1) Edmunds is a terrible source for data regarding real values. So thats not blue book thats Edmunds data unless Edmunds pulls data from Kelly blue book (not sure). KBB.Com would be blue book. They'll give you different data. As will NADA, Black Book, Manheim, and carfax. LOL. it's all just guesses except manheim, that shows real dealer transactions.

2) You're comparing wholesale value to retail value. This shouldn't come as a shock that wholesale values are lower than retail, thats how it works in pretty much any industry for the business to make money/margin. So when you say you go to sell in 2 years do you mean trade in? Because selling yourself private party vs trading in to a dealer you could likely get more. There is also tax credits to deal with, are you trading in something now? do live where there is sales tax? does that state offer tax credits on trade in? A lot of information you need to be able to build a good comparison, and I dont have time to get in to all of it right now.

However... No your numbers aren't right, assuming a couple things.... which brings me to point 3....

3) the screenshots dont show what values you entered for miles and condition. So if you entered 11,000 miles for the retail purchase value, and kept 11,000 miles and excellent condition for the the trade-in part, you're way off, unless you put no miles on it, and traded it in the next day. But youll have 2 years worth of miles on it over 11,000 so maybe assume the car would have 30-40k miles after 2 years? that will bring that 72,000.00 number down significantly... Not sure how much you drive. But even if you didn't drive 1 mile, and kept for 2 years, cars depreciate each month, whether driven or not. Each month and year its a month and year older, regardless if you put miles on it.

Soooo... with that said...

in order to get an even remotely accurate view of a trade in value 2 years from now you need to input a 2020 model with 35,000 miles, and change the condition to "good" and that will give you a more accurate sense of what a 2022 will be worth in 2 years compared to a 2022 now. ... HOWEVER....

This guarantees nothing. The automotive market conditions could change dramatically positive or negative with in the next 24 months, theres no way to predict what the car will actually be worth, but the best gauge would be looking at a 2020 with the amount of miles you assume youll drive, and the condition youll assume it would be in. compare that number to the 2022 now, and that will give you an assumption of how much youll actually lose in 2 years time.

But yes, this is nothing new, BMWs, MB, AUDI, depreciate, a lot as do ALL cars. and 38,000.00 from new to 2 years old with 11k miles is probably accurate for trade in. But again you're comparing retail to wholesale.

The depreciation estimate from new 110k, in your example should be from 110k to 86k, which is 24K. essentially 20-25% from new. Which is actually pretty good. The trade in/whole sale value is only relevant if you're comparing what a BMW dealer's cost /invoice/minus rebates hold backs & dealer incentives was, when the car was new. which would be the equivalent of "wholesale" then.

Cars depreciate, this is nothing new. What (was) new is the lack of supply 2-3 years ago that drove prices way up. But thats a complete anomaly and should never be factored in to valuations today, or any time in the future. Unless another "world wide pandemic" occurs (cough cough, bullsh*t).

[ResIpsaLoquitur]

Originally Posted by jnotrom711

Well... yes there is some definite errors in your methodology, and likely not in your favor...


1) Edmunds is a terrible source for data regarding real values. So thats not blue book thats Edmunds data unless Edmunds pulls data from Kelly blue book (not sure). KBB.Com would be blue book. They'll give you different data. As will NADA, Black Book, Manheim, and carfax. LOL. it's all just guesses except manheim, that shows real dealer transactions.

2) You're comparing wholesale value to retail value. This shouldn't come as a shock that wholesale values are lower than retail, thats how it works in pretty much any industry for the business to make money/margin. So when you say you go to sell in 2 years do you mean trade in? Because selling yourself private party vs trading in to a dealer you could likely get more. There is also tax credits to deal with, are you trading in something now? do live where there is sales tax? does that state offer tax credits on trade in? A lot of information you need to be able to build a good comparison, and I dont have time to get in to all of it right now.

However... No your numbers aren't right, assuming a couple things.... which brings me to point 3....

3) the screenshots dont show what values you entered for miles and condition. So if you entered 11,000 miles for the retail purchase value, and kept 11,000 miles and excellent condition for the the trade-in part, you're way off, unless you put no miles on it, and traded it in the next day. But youll have 2 years worth of miles on it over 11,000 so maybe assume the car would have [...]

Saved me from a long winded response, which was essentially going to come down to, “you’re not comparing apples to apples.”

Agree with you 100%, the numbers are being looked at/weighed against each other incorrectly for the reasons you stated. But the depreciation and numbers you mention in your response are spot on.

[Tk718]

Thank you. Appreciate the detailed response and I will input 2020 as you suggested to see a more accurate depreciation number.
My initial reasoning was to see how much this car depreciated as if I bought it new in 2022 and would have traded in for something else this year after driving for 11k miles.

[SQ5]

Not having the Comp option is going to hurt you big time.

[Tk718]

I live in a city with potholes and the base comes with 19in wheels and softer suspension. I think more practical. Otherwise of course I would choose competition.

[ResIpsaLoquitur]

Originally Posted by SQ5

Not having the Comp option is going to hurt you big time.

I think your response is regarding $ (and even then, I don’t agree). If it’s not, forgive me.

If it’s not about money, but, rather, user experience, as someone who has tasted both base (pre-LCI, ~29k miles) and Comp (LCI, ~15k and rising daily) versions, you can’t go wrong with the base. It’s still a phenomenal machine and will crush anything else in its segment.

Do I prefer the Comp? Of course I do. But was the base an “inferior” car? Absolutely not.

Pop on a piggy and you’ll overcome the +17hp bump in minutes. I of all people understand that it’s not all about hp, and that there are other differences between the two. But it’s still a phenomenal machine.

[MarcoF90]

Originally Posted by ResIpsaLoquitur

I think your response is regarding $ (and even then, I don’t agree). If it’s not, forgive me.

If it’s not about money, but, rather, user experience, as someone who has tasted both base (pre-LCI, ~29k miles) and Comp (LCI, ~15k and rising daily) versions, you can’t go wrong with the base. It’s still a phenomenal machine and will crush anything else in its segment.

Do I prefer the Comp? Of course I do. But was the base an “inferior” car? Absolutely not.

Pop on a piggy and you’ll overcome the +17hp bump in minutes. I of all people understand that it’s not all about hp, and that there are other differences between the two. But it’s still a phenomenal machine.

I prefer to have a comp over a base just because of the overall contents the comp package brings. the black badges and bigger wheels etc.

I recently stopped into a BMW dealership near my job last week and was pleasantly surprised to see a used 2021 M5 Base in Carbon Black on the showroom floor. I sat inside and played with the infotainment and what not. Wasn't a fan of the chrome badges, grille surround trim and wood interior trim.

Overall the M5 Base isn't a bad choice, but as I told the sales rep that "upped" me, I prefer the comp. I learned from my first car (and through life) that I shouldn't settle for nothing less than what I truly want.

Deal was kinda decent on this particular M5 too 51k miles with a $66k asking price.

[ResIpsaLoquitur]

Originally Posted by MarcoF90

I prefer to have a comp over a base just because of the overall contents the comp package brings. the black badges and bigger wheels etc.

I recently stopped into a BMW dealership near my job last week and was pleasantly surprised to see a used 2021 M5 Base in Carbon Black on the showroom floor. I sat inside and played with the infotainment and what not. Wasn't a fan of the chrome badges, grille surround trim and wood interior trim.

Overall the M5 Base isn't a bad choice, but as I told the sales rep that "upped" me, I prefer the comp. I learned from my first car (and through life) that I shouldn't settle for nothing less than what I truly want.

Deal was kinda decent on this particular M5 too 51k miles with a $66k asking price.

I agree on the aesthetics. As I have detailed in another thread and post, I swapped all chrome elements on my previous BSM over black base which came with black 706Ms to all black OE elements, including the kidney grills and grill surrounds, side markers, exhaust tips, and rear badge for the all black look. I got everything the Comp brings in terms of those visual elements (except shadowline headlights) for something in the ball park of $1000.

With all this being said, and my above post notwithstanding, there was no way I wasn’t getting a Comp the second time around, and made sure the aesthetics/color combo matched to what I had done on my base. I like entirely blacked out cars and have been rocking that aesthetic for 10 or 15 years now, even though many here dislike it for one reason or another. I dont see my view changing any time soon.

Wood interior trim is a weird spec for an M5, IMO. Even more bizarre on a base if you ask me, but, hey, to each their own. Aluminum dark carbon structure trim was kind of nice, but scratched if breathed on too hard. Now I have piano black which is difficult to maintain in an entirely different kind of way.

[logicators]

Originally Posted by ResIpsaLoquitur

I agree on the aesthetics. As I have detailed in another thread and post, I swapped all chrome elements on my previous BSM over black base which came with black 706Ms to all black OE elements, including the kidney grills and grill surrounds, side markers, exhaust tips, and rear badge for the all black look. I got everything the Comp brings in terms of those visual elements (except shadowline headlights) for something in the ball park of $1000.

With all this being said, and my above post notwithstanding, there was no way I wasn’t getting a Comp the second time around, and made sure the aesthetics/color combo matched to what I had done on my base. I like entirely blacked out cars and have been rocking that aesthetic for 10 or 15 years now, even though many here dislike it for one reason or another. I dont see my view changing any time soon.

Wood interior trim is a weird spec for an M5, IMO. Even more bizarre on a base if you ask me, but, hey, to each their own. Aluminum dark carbon structure trim was kind of nice, but scratched if breathed on too hard. Now I have piano black which is difficult to maintain in an entirely different kind of way.

That’s a compact only parking 😜

Beautiful car!

[ResIpsaLoquitur]

Originally Posted by logicators

That’s a compact only parking 😜

Beautiful car!

Only used for photos and not for actually parking the car!

And thank you very much! Best DDs I’ve ever had — hands down.

[logicators]

Originally Posted by ResIpsaLoquitur

Only used for photos and not for actually parking the car!

And thank you very much! Best DDs I’ve ever had — hands down.

Yep — and I also like blacks, even though they are a pain to maintain

[MarcoF90]

Originally Posted by logicators

Yep — and I also like blacks, even though they are a pain to maintain

The "50 Years" BMW Heritage Badge looks pretty neat on Black I must say

[ResIpsaLoquitur]

Originally Posted by logicators

Yep — and I also like blacks, even though they are a pain to maintain

But so worth it!

Car looks fantastic.

[ResIpsaLoquitur]

Originally Posted by MarcoF90

The "50 Years" BMW Heritage Badge looks pretty neat on Black I must say

It’s a really nice contrast, especially in person.