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German arithmetic....
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Posted by Mike Lynch [Email] (#81) [Profile/Gallery] (more from Mike Lynch) on Tue, 22 Mar 2005 16:35:30 Share Post by Email
In Reply to: Should I sell my '03 Aero, C.R., Tue, 22 Mar 2005 07:16:45
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Actually a current 330i has a very good chance of taking a big dump as this is the last year for the bodystyle, the new bodystyle 2006 330i's hit this spring. Right now you can get a Saab-like deal on a 2005 330i.

One of the most compelling arguments you can make against a Saab is resale, and it would seem on the surface to be an open and shut case, but there's some German Arithmetic goin' on.

Pay $10k more for a BMW or a Benz (Audi is similar and no better than Saab) and it will be worth $5k more eventually. What I'm saying is the price difference doesn't carry through to the resale. A 5-10 year old BMW will bring $5k more than the equivalent Saab, but cost $10k more new. So your 10 year old BMW is worth $10k, twice as much as the $5k for a 10 year old Saab, but the BMW's orginal cost was $10k more.

Depreciation is calculated from the original MSRP. Cars that tend to sell more towards their MSRPs, like BMW's look better, in the percentages. Saab is an incentive based seller and they sell for bigger discounts and for the 9-5's, sell for over $10k less than the equivalent 5 Series.

A 330i is a nice car, but a 9-5 Aero is really more car than a 530i not a 330i. You'd really be taking a hit on the Saab, short term amortization of the sales tax too, and then buy the BMW with more sales tax which would then still drop like a rock. Keep the Saab, vastly more economical and lower actual total dollar depreciation.


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