When buying a high end luxury or performance car, depreciation is always a factor. No one wants to buy a $100,000 car just to have it be worth less than half of that in five years. Depreciation alone is reason enough not to buy something like a Cadillac Escalade, which after five year will be worth less than a pencil sharpener.
So it’s good to do some research on the car you’re buying. Try and find used examples of the car you’re looking to buy, see how much they cost at five years old with average mileage.
Unfortunately, BMW isn’t among the better depreciating brands on the market. The 7 Series, for example suffers from awful depreciation. The current generation, F01 7 Series is one of the worst offenders. A Certified Pre-Owned, 2010 750Li xDrive with 26,000 miles and only one owner can be had for $40,998 or around $53,000 less than its starting price. That’s around a $10,000 per year loss on your car.
But not all BMWs are poorly depreciating cars. Some actually are quite good. The E92 M3 is one of them. This particular M3 I found is a 2011 sedan with 28,130 miles on it and a 6-Speed manual for $49,992. Being that a brand new M3 sedan starts at $62,000, that’s only around $12-15,000 (depending on options when new) of depreciation over four years.
That’s very good.
Another example of good value-holding is the 1 Series M. Not only do 1 Series M Coupes not depreciate very much, they can actually appreciate in value due to their rarity.
A nice example of that is this 2011 Valencia Orange 1 Series M Coupe with 11,763 miles and it costs…$61,900. The starting price of a 1 Series M when new? $47,010. That’s almost $15,000 in appreciation. That’s one hell of a good value. Imagine being able to sell your sports car that you enjoyed for four years for more money than you paid? Your wife could never complain about you buying a sports car again.
Another BMW that holds is value quite well is the previous generation X5. A 2012 BMW X5 xDrive35d with 32,000 miles is listed for around $45,000. The MSRP in 2012 was $56,700 (invoice $52,000), so after three years, the premium diesel SUV is still worth quite a bit of money.
So while some BMWs are bad investments, some are actually quite good. Almost all cars are depreciating assets, so don’t expect your car to gain value unless it’s something rare, but it helps to know which cars minimize the damage.