BMW is known for producing a good and reliable car. You might always pair a good car with the word BMW, but there are still things to consider aside from their big name. So let us talk about BMW’s depreciation.
So why do BMWs depreciate so much? There can be many reasons why BMWs depreciate so much. It can be because of the German government’s mandate to use natural or biodegradable rubber, or the way BMWs are over-engineered.
If someone is planning to buy a car, they would always opt to choose BMW. It has been reliable and good even with its earned bad reputation. But before rewarding yourself with any BMW car, you need to know about the depreciation value of these cars.
BMW cars tend to depreciate much faster than you will expect. There can be many reasons why they depreciate so much. And everybody else needs to know this before buying the actual car.
So we will talk about the depreciation of BMW cars. Let us get started.
Table of Contents
Do BMWs Retain Their Value?
If someone buys a car, sometimes they would think and worry about everything else except depreciation. Depreciation is the reduction of a particular item’s price after using it and after a long time.
Luxurious cars are bought at a very high price, but their value will decrease once you use them over a long period of time. BMW is included. BMW will lose its value after five years of driving them.
This gives you a ton to think about. If you buy a BMW, you need to know their depreciation value. A vehicle will immediately lose its value once you buy them, but BMWs depreciate much faster than the others.
Depreciation is essential, so you need to consider this before getting your hands on BMW cars. However, despite the issues with BMW depreciation, people are still buying BMW cars.
They earned their name, and despite BMW’s rumors being unreliable, there are still many people who can vouch about how good and reliable BMW cars are.
How Much Does BMW Depreciate Each Year?
People would always say that buying cars is an investment. But let us go back to the basic definition of an investment. An investment is something you buy that you can sell later on at a higher price.
This cannot be applied to most cars. When you purchase a BMW, these cars will lose their value when you get them from the dealership and bring them home. That is not an investment.
If you sell your BMW years later, you have to sell it at a lower price. That is what we call depreciation. The depreciation of the BMW will differ with every car model.
BMW has a lot of car types and series. Each of these cars has its depreciation value. But on average, BMW cars can depreciate somewhere around fifty-eight percent in five years.
It would be best for you to remember that not all models depreciate this much. This is only an estimate. You have to give or take some percent in other BMW cars.
Related: Are BMWs Reliable?
Why Do BMWs Depreciate So Fast?
There can be many reasons why BMWs depreciate so much. We will list down two of the main reasons why BMW depreciates so much.
1. German Government Mandates
The German government mandates that every part of every car must be made with natural and biodegradable rubber. The German government mandated this law, and it caused a lot of issues with the BMW cars.
Almost all issues and problems encountered by a BMW car have something to do with the rubbers wearing thin and wearing out. The rubbers can last for only six to seven years if you are lucky. That is why BMW cars will start depreciating in their fifth year.
Other car dealerships use synthetic rubber. These synthetic rubbers last for over ten years and more. So the value of BMW cars will lessen after three to five years of using it because these rubbers will also wear out.
If you sell these BMWs, they will automatically need repairs and maintenance. Therefore, they will lose their value much faster than any car brand.
2. Over-engineered Cars
Another reason could be that BMW cars are over-engineered. Some components could have been made into a much simpler state. A mechanic will take more time fixing these cars because they have to go the extra mile.
Mechanics are having a hard time fixing these cars because they are over-engineered. They are made with complications and will make them less reliable.
Related: How Many Miles Does A BMW Last?
Which BMW Holds Its Value Best?
While saying that, BMW depreciates so much. We are talking about a lot of car types and series.
These cars have a difference in terms of value depreciation. And there are still some BMW cars that hold their value best. Here are some of them.
1. BMW X3
This BMW X3 holds its value much longer than any other BMW car. This car offers a spacious interior and an excellent fuel rating.
This car has retained its value longer than other BMW car types, and the resale value is excellent. In buying a BMW car, have this on your options to a good and reliable car with an excellent resale value after many years.
2. BMW 2 Series
This series has been one of the cheapest series released by BMW. But despite that, these series have held their value longer than any other cars.
This series has a sporty look and is not leased very often. That can be one of the reasons why this series takes longer to depreciate.
3. BMW Z4
This car is one of the most affordable there is in the market. This car is unique that adds to their popularity. This is a fantastic car and has a very good resale too.
So here are some of the BMW that hold their value strongest and longest. When you buy a BMW car, always check its depreciation value because it can help you in the long run.
BMWs Depreciation Compared to Other Brands
Yes, BMWs depreciate so much faster, but it’s not just limited to BMWs. There are other car brands that also depreciate. For the record, all cars would depreciate.
If you are thinking of investment, it is not a good investment to make. Well, it is never an investment because investment is selling something at a higher price.
To be fair, all cars depreciate, not just BMW cars. But they have been reported to have the fastest and highest depreciation value.
If you want to compare the depreciation value of BMW to other car brands, we can give that to you. In the preceding content, we will talk about the depreciation value of BMW compared to other car brands.
BMW vs. Mercedes Depreciation
According to Darryl Jacobson, BMW depreciates faster and higher than Mercedes. The rank was from analyzing the True Price data. They have attended a lot of bank auctions.
After, they have compared the prices in the auction versus the original price. And so the result said that BMW has the worst resale price compared to Mercedes. The result might shock someone, and the result may not be new to someone.
They also remind everyone to always consider the resale value of each vehicle before purchasing them. Depreciation is necessary because you can have a higher price when you want to sell the vehicle.
If your vehicle will depreciate so much, you can sell it at a very low price. So always choose the vehicle that has a very good resale value after a long period of time.
BMW vs. Audi Depreciation
In the same analysis made by Darryl Jacobson, the managing director of True Price, BMW is still way below Audi in terms of depreciation. The Audi came first with 62.49 percent of its original price list. Jacob also said that they had witnessed a lot of bidding on Audi cars during the auctions.
They said the Audi is the best option made by young people. It can also be suitable for large groups because of its spacious feature.
One thing also about Audi is that they are labeled safe. So yes, BMW still has the worst depreciation value compared to an Audi.
BMW vs. Toyota Depreciation
Toyota is included in the ranks of having the lowest depreciation in five years. The depreciation price can be different with every car model, but a Toyota can depreciate with only thirty-two percent for five years.
Toyota is doing well in maintaining its value over the years. They have always been included in the lowest depreciation ranking, and they have never been included in the ranks of having the worst resale value there is.
The record of Toyota has been impressive. A BMW has always been included in the ranks of having the worst resale value, and with that, Toyota ranks above the BMW in terms of depreciation value.
So if you want a vehicle with a very good performance and has one of the best resale value, you should consider getting a Toyota. You can enjoy the good performance it can bring and the lowest depreciation over the years.
BMW vs. Honda Depreciation
Honda is also included in the ranks of having the lowest depreciation value in five years. Honda has been keeping their rank in an impressive spot in having the lowest depreciation value.
Honda has been showing their strong retention in terms of its value. Honda has been holding on in their resale value place.
Honda is still better than the BMW in terms of resale value. So if you want a car band that would not disappoint you after how many years, try your hand with Honda.
Their depreciation value is only at 38.1 percent. BMS still ranked lower than them and is still included in the ranks of car brands having the highest depreciation value in five years.
BMW vs. Ford Depreciation
This is a different story. Ford was not included in the list of car brands with the lowest depreciation value in five years.
And BMW and Ford have been included in the list of having the highest depreciation value in five years. But BMW still is way below Ford in depreciation rankings.
There is a chart that shows the depreciation value of these two. The BMW still has the highest depreciation.
You Might Also Read: Is a BMW a Good First Car?
Summary
In summary, every car does depreciate. However, BMW cars depreciate much faster and higher than other brands. The reason could be because of the German government mandates and the use of a biodegradable rubber.
There can still be a lot of reasons why BMW cars depreciate much higher. With that, you have to think through the depreciation value of each vehicle before you bought one.
This will help you in the long run when you will sell the vehicle. Depreciation is a must in buying your car.
Resources
Image credits – Canva
[1] Used BMW
