Why do German cars depreciate much faster than the Japanese counterparts in the US?

Mudassir Ali
Feb 15, 2020 05:09 AM 0 Answers
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Mudassir Ali
- Feb 15, 2020 05:09 AM

In general, the automobile subgroup that suffers the greatest depreciation is luxury cars. German luxury cars depreciate more heavily partially because their average cost is just greater than the average Japanese luxury car. Also, one could extrapolate that one contributing factor could be because German cars are just not as reliable as Japanese cars, at least the most popular Japanese cars, such Toyota, Honda, and Suburu, as shown repeatedly for decades now, and German replacement parts are ridiculously expensive.

There is a saying in the car world, ‘there is nothing so expensive as a used Mercedes.’ So why buy used?

Most people who have German luxury cars lease those cars, and generally don’t have to worry about repairs on a relatively new car. Lease terms are commonly 36 months, whereas the warranty for German cars is 48 months. So any problems with German cars on lease would be covered by the warranty in any case. But after the lease expires and the car is sold on the market, soon to be out of warranty, beware! And this affects resale value.

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