MSCA

iTrader: (3)

Yes, of course. Good for them...not so good for me, only because I'd rather not drive a car that I see everywhere I look. That's why I'd never own a Camry or an Accord. I've always gravitated toward cars that are not as common on the roads.

greg_atlanta

two things:

1) a car is not an investment. if you want to "retain value" then put your money in the bank. all cars depreciate, and there's no way you can predict how fast your car will depreciate versus other cars.

2) the japanese yen is very strong right now versus the dollar and nissan is probably making a much slimmer profit margin on these cars. they have to cheapen the cars to increase their profit margin, or add more standard features to boost up the base price. the strong yen is very damaging to the US market for japan-built cars. i wouldn't be surprised to see the next-gen G built in the US.

MSCA

iTrader: (3)

Yes, it is absolutely true that a car is not an investment (unless you're talking about something like an Enzo or some kind of ultra rare car), but I'd still rather buy a car that has a lower rate of depreciation than average. You actually can predict the rate of depreciation by trending. Certain cars tend to depreciate faster than others and that usually holds true for the product line as new generations of the model come around.

For example, when I was buying a midsize SUV, I eventually narrowed down my choices to three vehicles: Toyota 4Runner, Jeep Grand Cherokee, and Nissan Pathfinder. I liked all of them, but chose the 4Runner. A big part of my decision was based upon how well built the 4Runner is compared to the Jeep and the Nissan. Because it's a very well built vehicle with very good reliability, the resale value on them has been MUCH higher than the Grand Cherokee and the Pathfinder. Browsing through the used car values seems to confirm my choice....the 4Runner definitely has a higher used car value than the other two.

BillPaul

You're right about the apparent depreciation of these vehicles. According to Consumer Reports:
Toyota 4Runner: Much better than average
Nissan Pathfinder: Worse than average
Jeep Grand Cherokee: Much worse than average
Unfortunately, CR does not publish actual % retained value/year, but lots of other publications do.

Nevertheless, these ratings may be inaccurate as they are based upon manufacturer's list price rather than price that folks are actually paying. When compared with actual selling price (which may be significantly lower than list), many vehicles may be much better than they seem. On the other hand, Toyotas have traditionally not been discounted, which may account for a lot of the lower depreciation.

MSCA

iTrader: (3)

I'm sure it varies, but I actually shopped all three vehicles after test driving them. The Jeep salesman was willing to give me a big discount right off the bat. He had a lot of Grand Cherokees on the lot and I guess he needed to move them. When I went to the Toyota dealership, there were only 5 on the lot and one of them was the exact model and color combination I wanted. In fact, I would have ordered it the same exact way. The MSRP was $35K and I bought it that same day for a hair over $30K. I thought it was a pretty good discount for a "low volume" vehicle like the 4Runner.

It's also worth mentioning that the Grand Cherokee had a higher MSRP when comparably equipped. But with a larger discount on the Jeep, the end price would have been very similar. Today, my 4Runner is worth quite a bit more than the Grand Cherokee that I considered buying.

BTW, slightly off topic, but has anyone seen the new 2011 Grand Cherokee? I love the styling now. Looks really upscale on the inside and outside. Hopefully they've improved the reliability too...

greg_atlanta

If gas hits $5/gal and stays there the G37 could depreciate more than the G25 (if there's a measurable difference in MPG).

Vasher

The 37's price point edges out a lot of potential buyers, especially in areas with a higher cost of living (like LA). It's no Lambo, but it is recognized as a nice/quick car. The 25 will change peoples views of the G altogether. In a couple years people will be able to acquire used 25's in the mid to high teens, making it more readily available to a broader demographic. The idea of the G being a nice car is changed when you pass 1,000 people on the way home who can say " my cousin Yoker just got a G and it's slo yo".

It effects resale value in a number of ways, most notable- there is a larger portion of the population willing to save a few bucks vs paying for performance. Some of those potential buyers that would have acquired a 37 will instead purchase a 25, devaluing the 37.

If a 25 coupe is announced, I'm trading in my G.

MSCA

iTrader: (3)

Just about everything you said applies to the BMW 3-series as well. But I don't see their resale value dropping because of the lower priced models.

financeman

1) - correct...all new cars depreciate; some more than others. However, I leased rather than purchased my G...and the future value (residual) is locked in at 60% of sticker. If the new G25 causes resale to plumet...its not my problem. I am not necessarily promoting leases, but IFC has a great program right now and I like the idea of making the purchase decision after three years of driving the car.

2) +1

Vasher

First, I'm less concerned with the resale value as I am with the exclusivity of owning a G (what little there is). In just a couple years (when the lease returns start pouring in) the streets of SoCal will be flooded with de-badged 25's with 24" chrome and shopping cart handles (large wings). If there are coupes included in this madness, I want out of the club.

Second, any premium level auto's sale value (both new and resale) is effected by it's lower models. So much so, that BMW underrated the 335's hp so as not to infringe on M3 sales. Absolutely, the G25 will directly effect new G37 sales as well as it's resale value.

An exaggerated hypothetical situation: If there were 10's of thousands of 3 cylinder 2008 Gallardo's available for $17k, it would obliterate the resale value of the V10's, indubitably.

MSCA

iTrader: (3)

Are you making an assumption here? The M3 is rated at 400+ HP (414, maybe? I don't remember the exact number) and BMW rated the 335 at 300 HP. So even if the 335 is underrated, it is still nowhere near the M3. And that holds true for price and performance as well. The difference between those two vehicles is just too great for me to believe what you're saying.

Still though, that is a silly example. A better example would be a 335 vs a 328. I don't see the value (new or resale) being negatively impacted because there's a "lower" model selling along side a more "premium" model. It seems to work for BMW and other manufacturers, so why not Infiniti too?

328HP

And to add on to the very well thought out point you have, the 335i residuals are better than the 328i's residuals, something I expect to apply to Infiniti as well.

If one buys the G for "exclusivity" (whatever that means at this price point), then if the perception is the G25 will damage such "exclusivity", then where do you go, 3 series, C Class. I don't think its going to be any better over there either. Unless if you go S4/CTS-V/S5 where there are fewer cars since the price point is higher.

I actually like the idea of a G25, makes the G37 their premium offering

JohnEnglish

LOL do you read the forums and see what people do to their cars? Besides, the G35 is already suffering from this. I see a lot of G35 sedans and coupes that are "riced up". BMW, MB, and Audi already have this "problem" you see a lot of off lease vehicles that are diven around with huge spoilers and racing stripes.

People who want a car becuase of the badge only will not car about different trim lines. People who want the car becuase of specific performance characteristics and the value it offers will be willing to pay the premium for the the G37 vs the G25. Same thing

greg_atlanta

Another point about the strong yen.... remember the Infiniti lineup in the mid-90s? The yen was very strong then and the '96 Q45 was a LOT more expensive than the $35K pricing for the '90 model (over $60K, I think). The '97 Q45 was based on the lower-end Cima Japan model instead of the President. The I30 came out around that time, basically a rebadged Maxima. Same thing with QX4 (rebadged Pathfinder). The product lineup was suffering, and a lot of that had to do with the low profitability per the strong yen.

If the yen stays strong against the dollar, expect a lot more cheapening and corner cutting.

Vasher

No, the M3 dyno's 365hp/259 tq, 335 dyno's 285(+) hp/ 288 tq. That would mean that if the hp rating BMW applied is correct, the 335 only has 5% drivetrain loss, bs.

It has greater torque and is only down 80hp. Few hundred on a JuiceBox and your faster than the M3. M3 is a little better in the twisties, but $20k better?

The effect on resale is not evident do to the fact that the these models exist. Remove all 328's from the picture and those looking to get into a 3 series will have to pony up for the 335, or look elsewhere. Now, you have the same number of people interested in the 3 series, but fewer available used cars because of the higher initial price of the 335. It's called supply and demand.


In today's economic state there are far more people looking to save money vs acquire performance. Without offering little "incentives" fewer 335's would be sold/leased. It has to be worthwhile to build the car. (?)

It is fairly exclusive (at least in my neck of the woods). The high cost of living leaves a smaller percentage of ones income to be dumped into an auto/autos. I know there are parts of the nation the a condo can be had for a few hundred a month, around here it's just under $3k, apartment over $2k, house $4k+, and nobody's buying unless they're set. For me to have the cars I have and pay my mortgage places me in a particular demographic.

It's current model year autos in the mid to high teens that are bought up like crazy by a demographic I'd rather not be associated with. The G25, within just a couple years, will hit that price point.



You're talking about previous model years. Once these cars depreciate to the point a greater number of morons can buy them is when you start seeing the cars "ruined" in greater numbers.

My point exactly. People acquiring the base model benefit from the "premium" models, via association. Thus the higher percentage of de-badged base models vs the premium. Premium models aren't de-badged because nobody wants their expensive ride to be mistaken for the "cheapy". M, SRT, AMG, Brabus, SS, etc.

Some, but now that there is an option at a lower price, those that would have been on the fence about the cost of the 37 vs another (less expensive) auto will acquire the 25. Again, diminishing the G's "exclusivity".

Sorry about the crazy long read.