Depressing Depreciation

The problem I found when looking for a used diesel pickup was that most of the people buying them new spent way too much for them and were more focused on the monthly payment than the total purchase price. As a result a 3 year old pickup with 60,000 miles was sell for $35,000 or more. I gave up on finding a used truck at a reasonable price and bought a new diesel truck that was fully loaded and paid $41,700 for it.

But I am unusual in that I care more about getting a great deal than getting exactly what I want with a special order truck. My neighbor bought his gas 3/4 ton truck a month before I bought my diesel version of the same truck. He got a 2012 and I got a 2011 and 99.9% of the trucks are the same except mine had the diesel engine and Allison transmission. He paid more for his truck than I did for mine.

Canadians pay more in various taxes but then you get what you pay for up there with better living conditions, better transportation systems, better healthcare, better education, and your government does not involve itself in an endless stream of wars for oil that creates hundreds of thousands of permanently disabled veterans. I would be happy to pay more for a truck if that was the price of true freedom and opportunity.

I buy new. I buy what I want and if possible try to factory order, so I get what I want, not just what's there. I pay cash, unless there's a good deal, like 0 % interest over a good number of years.

I think carefully what exactly I want, in a vehicle....as I plan to have them for a long time.

No impulse buying.

I buy extended warranties. I rust proof with Ziebart. I maintain by the book.

I drive my vehicles for years. One vehicle for 21 years, another for 14, another for 10 years. I usually have anywhere from 2-3 vehicles in my parking lot / garage at any one time.

When I'm finished with them, I feel I've got my money out of them.

I don't worry about depreciation as the way I do things, it's not much of a factor.

Fixed Sight Training wrote:
think in Alberta new vehicles are about 25% more than in the USA but on the used market, our vehicles are often cheaper than across the line. So an American might expect his truck to depreciate about 10% per year where as Albertans will see their pickups depreciate about 17% per year.

That was not my experience buying a 2014 F150 in Alberta. I went to both the Canadian and US Ford sites and "built" the same vehicle as mine to see what type of price differences there are. I used the zip code for Shelby, MT (59474) to get as close to Alberta as I could to keep any geographic differences out of the mix.

I paid $700 more for shipping to Canada and most of the options were priced slightly higher, as you would expect. But once you see the final summary page, one thing jumps out: in Canada we get a "Delivery Allowance" that reduces the net price. When I bought mine it was $8250 and now its $9000 off of the MSRP.

So here are the results:

US build: MSRP - $44,425, Net Price w/ options and delivery - $45,945
Canadian build: MRSP - $46,529 , Net Price w/ options and delivery - $41,519

Remember we are talking about Canadian dollars here. The rate of exchange was around $1.09 Canadian to buy US dollars, so the net price for the American website build in Canadian dollars is actually around $50,000 (what I would pay to buy in the US) and the price of the Canadian website build in US dollars is about $37,700 (what an American would pay up here).

I also have always bought my vehicles at 2-3 years old with some warranty left to ensure that I don't inherit someone else's problems. But when I priced out late model used trucks, the prices were all north of $30,000 and I would have to compromise on the features that I would want. After negotiations, I paid just over $35000 for a truck that was exactly what I wanted with 0 miles on it.

I just couldn't see any reason to not spend the extra few thousand dollars to get a new one. I'll happily take the minor depreciation hit if I can still get over $30k for it in 3 years, although I will likely be keeping this truck for a lot longer than that.

...

I paid $18.00 for a hamburger in Canmore.

The depreciation on new trucks isn't nearly as bad as the depreciation on new food.

Of course the drive-it-til-it-drops scenario has come fully into play on used food. :)

Wes
...

After the recent results of the 1 ton shoot out, I won't be surprised if I start getting cold calls from Ford and Ram owners wanting to buy my GMC for a price higher than I paid for it 18 months ago.

Bamaman1 wrote:
I assume you're talking a 1 ton diesel crewcab 4x4 at the prices you're talking.

If you're someone that trades often, lease. If you buy a diesel for the long run, that's where the value of a diesel lies.

My 117K mile F250 is almost 12 years old, and it still looks and runs like new. My Lariat crew cab 7.3 diesel with all options except 4x4 cost $32K new, and it's still worth quite a bit.

We're sorry to see that Canadians have to pay so much for your vehicles, taxes, etc. It's simply an expensive place to live. We hope to see you in Florida for the long winter, however.

Yep, 1 ton diesel CC 4x4 with all the toys. I think your right that keeping a truck for many years is a less expensive way to go. I need to learn to be content, although, a truck costs money to own wheather it's high depreciation on a new one or lower depreciation and higher repairs on an old one.

Not sure about Florida but certainly somewhere warm to break up the winter.

I assume you're talking a 1 ton diesel crewcab 4x4 at the prices you're talking.

If you're someone that trades often, lease. If you buy a diesel for the long run, that's where the value of a diesel lies.

My 117K mile F250 is almost 12 years old, and it still looks and runs like new. My Lariat crew cab 7.3 diesel with all options except 4x4 cost $32K new, and it's still worth quite a bit.

We're sorry to see that Canadians have to pay so much for your vehicles, taxes, etc. It's simply an expensive place to live. We hope to see you in Florida for the long winter, however.

4x4ord wrote:

nevadanick wrote:
Some people can afford to buy new when they want and it doesn't matter what the depreciation is to them. That said we are going to go buy a new GMC Yukon Denali saturday, anyone want a good used Yukon in about 3-4 years ?

I will buy your Yukon Denali off you in 4 years. How does does $14,400 sound? I'm assuming it will have all the bells and whistles, that you will keep it in excellent shape and not put too many miles on it. (I am assuming you will be paying 60k for your new Yukon and then used a number of 30%/year for depreciation, but of course, that is not of any significance):)

We had an 07 for 3 years (sold it in 2010) and I still drool just a little when I see one. I'm sure the new models are even nicer. Enjoy your new ride .... I'm going to mark my calander.:)

Get ahold of me in 3 years and we will talk. Brought one home from Boise Saturday.

nevadanick wrote:
Some people can afford to buy new when they want and it doesn't matter what the depreciation is to them. That said we are going to go buy a new GMC Yukon Denali saturday, anyone want a good used Yukon in about 3-4 years ?

I will buy your Yukon Denali off you in 4 years. How does does $14,400 sound? I'm assuming it will have all the bells and whistles, that you will keep it in excellent shape and not put too many miles on it. (I am assuming you will be paying 60k for your new Yukon and then used a number of 30%/year for depreciation, but of course, that is not of any significance):)