Why do cars decrease in value so quickly and dramatically?

I heard that even as soon as you drive it off the forecourt it loses value. Why is this?
Why do cars decrease in value so quickly and dramatically?
they are expenses and not assets. time alone will decrease thier value.


They will eventually fall apart.
Why do cars decrease in value so quickly and dramatically?
some kind of game the car makers play on us





sucks doesnt it?





my 2005 expedition


drivin off the lot was 23k bought and finaced for 35k
Reply:Ego and everyone wanting to keep up with the Jones. I gotta have the best, newest and most expensive so I can brag about it. Pretty dumb, huh? Used cars would be a real let down to some folks. Gotta trade for every new model.


We've got the wants, not the needs. Therefore there are so many used cars out there. And the dealers have got to get rid of them. When you move a new car it becomes a used car and is valued accordingly.
Reply:In the early days of automobiles, the idea was to build a car that would last a man a lifetime.





But every time new styles and technology was developed, people needed to buy a new car to get the new technology.





New styles don't really work anymore to get people to buy new cars, and new technology is getting so expensive, people very often opt not to ante up the bucks to get it.





The trend for manufacturers in the 70s and 80s was to conspire with government to make equipment mandatory. Seat belts, air bags, 5mph bumpers, smog equipment. That way they could sell you alot more equipment with your car.





Now computers have changed everything. All a manufacturer has to do is program the computer to make the car run bad when the warranty runs out and everyone goes running for the dealership to buy a new car.





Don't you love progress!


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Reply:A lot of a cars initial value is based on dealer mark-up. The dealer is trying to make money, so they buy the car cheap. They get the cars cheap from a company, like ford, because they have a contract saying they will sell Ford cars. After they buy the cars they mark up the value on the car lot. When you go there they offer cheap financing and special discounts so it looks like you got a good deal off the sticker price, in fact you still gave them more money than they paid for the car. Back on subject... The value of a vehicle is based on what someone would buy it for. So after you drive off the lot and it is in your possession why would the car dealer pay you more for a used car, when he can get a new one for less than he sold the car to you for?


That is just one reason, there are other factors such as gas millage, features, and size. Cars generally lose a lot of there value because of the dealerships.