Would a three year old car with 100k miles generally be worth 25% original price?

[Jumpem]

Am I safe buying a car with a 48 month loan, driving it for three years until the extended warranty is done, and selling it?

Think I would come out ahead?

 

[jlee]

What car and how much?

 

[joesmoke]

depends on the car.

 

[spidey07]

hell no. More like 35-50%.

-edit-
completely misread, thought 25% OFF orig price. New car and 100K on it? probably worth 35-50% of orig price.

 

[Jumpem]

Originally posted by: JLee
What car and how much?

Probably a 2010 Forester or Outback, $24-27k.

 

[ggnl]

with no down payment you're almost guaranteed to be upside down on the loan after 3 years

 

[Jumpem]

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

 

[geno]

Originally posted by: Jumpem

Originally posted by: JLee
What car and how much?

Probably a 2010 Forester or Outback, $24-27k.

Subies hold their value very well. At least around here they do. I think you'll be able to get 12-14K for it with that kind of mileage in a few years.

 

[Capt Caveman]

Originally posted by: Jumpem

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

The outstanding balance on a $25k four year loan will be higher than $6250 after three years.

 

[ggnl]

Originally posted by: Jumpem

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

loan balances don't depreciate linearly, you would owe more than 25% of the original balance 3 years in because you pay more interest at first when the balance is higher

 

[spidey07]

Originally posted by: ggnl

Originally posted by: Jumpem

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

loan balances don't depreciate linearly, you would owe more than 25% of the original balance 3 years in because you pay more interest at first when the balance is higher

No you don't. It's a straight installment loan. principal and interest payments don't change. There is no ammortization.

 

[Jumpem]

Originally posted by: Capt Caveman
The outstanding balance on a $25k four year loan will be higher than $6250 after three years.

Originally posted by: ggnl
loan balances don't depreciate linearly, you would owe more than 25% of the original balance 3 years in because you pay more interest at first when the balance is higher

I know, I was just doing simple math. Assuming a 3.9% interest rate, after three years the balance would be $6619.

 

[0roo0roo]

Originally posted by: Jumpem

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

worth to who? cars always worth more to the seller😉
still, 100k in 3 years would make any buyer think twice. probably have to discount it at the level of a used rental.

 

[mugs]

I'm going to throw an idea out there that's going to blow your mind. Look up the value of a 2006 Forrester with 100k miles on Edmunds.com. Compare it to the estimated price of a 2006 Forrester.

 

[Jumpem]

Originally posted by: mugs
I'm going to throw an idea out there that's going to blow your mind. Look up the value of a 2006 Forrester with 100k miles on Edmunds.com. Compare it to the estimated price of a 2006 Forrester.

I've done that too.

 

[DeviousTrap]

Originally posted by: Jumpem

Originally posted by: ggnl
with no down payment you're almost guaranteed to be upside down on the loan after 3 years

You really think a three year old $25k car wouldn't be worth $6250?

You'll be cutting it close, but you should be okay. Make sure to check an amortization chart, the balance on the loan will not be 1/4 of the loan after 4 years, it will be a bit higher (as loan matures you pay more towards the principle and less towards the interest).

As far as estimating the value of the car, here are the figures for a base model 2006 Forester. The average auction selling price is $11,579, but the average mileage is 39,068. You are going to be way above that average, so here are the results for the cars with the highest mileage that were sold within the last month:

05/21/09 NORTHWY Regular $9,700 51,224 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $9,800 54,401 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $9,200 62,572 Below RED 4G A Yes
05/20/09 BUTLER Regular $8,800 64,765 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $8,900 66,019 Below RED 4G A Yes
05/26/09 COLORADO Regular $7,500 69,335 Below SILVER 4G A Yes
06/03/09 DENVER Regular $9,400 77,089 Below GRAY 4G A Yes
05/29/09 MANHEIM Regular $7,600 86,389 Below GRAY 4G A Yes
05/21/09 FRDKBURG Lease $7,800 93,741 Below WHITE 4G A Yes

Manheim gives me an option to estimate a value of a car and if I put in 100,000 miles on a 2006 Forester it estimates auction value price to be $8,050 in average condition, and $6,200 in below average. In reality (look at the cars above) that huge amount of miles already puts the car in below average condition, so the average is almost meaningless.

The reason I'm giving you auction prices is that these are the numbers that a dealer use to assess a trade-in. If you are selling the car privately you can obviously expect higher numbers than those above.

 

[Jumpem]

Originally posted by: DeviousTrap
You'll be cutting it close, but you should be okay. Make sure to check an amortization chart, the balance on the loan will not be 1/4 of the loan after 4 years, it will be a bit higher (as loan matures you pay more towards the principle and less towards the interest).

As far as estimating the value of the car, here are the figures for a base model 2006 Forester. The average auction selling price is $11,579, but the average mileage is 39,068. You are going to be way above that average, so here are the results for the cars with the highest mileage that were sold within the last month:

05/21/09 NORTHWY Regular $9,700 51,224 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $9,800 54,401 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $9,200 62,572 Below RED 4G A Yes
05/20/09 BUTLER Regular $8,800 64,765 Below BLUE 4G A Yes
05/29/09 MANHEIM Lease $8,900 66,019 Below RED 4G A Yes
05/26/09 COLORADO Regular $7,500 69,335 Below SILVER 4G A Yes
06/03/09 DENVER Regular $9,400 77,089 Below GRAY 4G A Yes
05/29/09 MANHEIM Regular $7,600 86,389 Below GRAY 4G A Yes
05/21/09 FRDKBURG Lease $7,800 93,741 Below WHITE 4G A Yes

Manheim gives me an option to estimate a value of a car and if I put in 100,000 miles on a 2006 Forester it estimates auction value price to be $8,050 in average condition, and $6,200 in below average. In reality (look at the cars above) that huge amount of miles already puts the car in below average condition, so the average is almost meaningless.

The reason I'm giving you auction prices is that these are the numbers that a dealer use to assess a trade-in. If you are selling the car privately you can obviously expect higher numbers than those above.

Thanks. 🙂

 

[ggnl]

FYI, here's the outstanding balance for months 24-48. This is for 27k at 3.9%. Keep in mind that TT&L and finance charges will add at least a couple grand to the price.

24 14,025.38
25 13,462.54
26 12,897.86
27 12,331.35
28 11,763.00
29 11,192.81
30 10,620.76
31 10,046.85
32 9,471.07
33 8,893.43
34 8,313.90
35 7,732.50
36 7,149.20
37 6,564.01
38 5,976.91
39 5,387.91
40 4,796.99
41 4,204.16
42 3,609.39
43 3,012.70
44 2,414.06
45 1,813.48
46 1,210.95
47 606.46
48 0.00

 

[DeviousTrap]

Originally posted by: Jumpem
Thanks. 🙂

Also, make sure get rid of the car before the 100k mile mark. People associate a negative stigma with cars as soon as they roll over the even one hundred. You'll loose less if you get rid of it at 93k instead of 100.

Originally posted by: ggnl
FYI, here's the outstanding balance for months 24-48. This is for 27k at 3.9%. Keep in mind that TT&L and finance charges will add at least a couple grand to the price.

24 14,025.38
25 13,462.54
26 12,897.86
27 12,331.35
28 11,763.00
29 11,192.81
30 10,620.76
31 10,046.85
32 9,471.07
33 8,893.43
34 8,313.90
35 7,732.50
36 7,149.20
37 6,564.01
38 5,976.91
39 5,387.91
40 4,796.99
41 4,204.16
42 3,609.39
43 3,012.70
44 2,414.06
45 1,813.48
46 1,210.95
47 606.46
48 0.00

Good luck!

 

[Jumpem]

Originally posted by: DeviousTrap
Also, make sure get rid of the car before the 100k mile mark. People associate a negative stigma with cars as soon as they roll over the even one hundred. You'll loose less if you get rid of it at 93k instead of 100.

Good tip. Wonder how I'd do selling it at 24 months with 60k.

 

[DeviousTrap]

Originally posted by: Jumpem

Originally posted by: DeviousTrap
Also, make sure get rid of the car before the 100k mile mark. People associate a negative stigma with cars as soon as they roll over the even one hundred. You'll loose less if you get rid of it at 93k instead of 100.

Good tip. Wonder how I'd do selling it at 24 months with 60k.

Easy enough, 2007 Forester:

05/26/09 STATESVL Regular $11,600 45,468 Avg WHITE 4G A Yes
05/28/09 GTR PHNX Lease $11,900 45,695 Avg BLUE 4G 5 Yes
05/29/09 MANHEIM Lease $10,500 53,076 Below GREY 4G A Yes
06/17/09 BAY CITI Regular $9,200 78,858 Below SLVR 4G A Yes
05/20/09 BUTLER Regular $8,600 91,128 Below BLACK 4G A Yes

Estimate is $10,800/Average $9,650/Below.

Yikes!

 

[ponyo]

Originally posted by: Jumpem

Originally posted by: DeviousTrap
Also, make sure get rid of the car before the 100k mile mark. People associate a negative stigma with cars as soon as they roll over the even one hundred. You'll loose less if you get rid of it at 93k instead of 100.

Good tip. Wonder how I'd do selling it at 24 months with 60k.

You'll be in worse shape. Don't buy a new car if you're going to rack up mileage and only keep it for 2-3 years.

 

[Jumpem]

Originally posted by: Naustica
You'll be in worse shape. Don't buy a new car if you're going to rack up mileage and only keep it for 2-3 years.

I don't trust used cars to handle a 100 mile daily commute. I don't have the time or patience to deal with breakdowns. Not to mention how cars even four or five years old start rusting around here.

Only other consideration would be a high mileage lease, and just pay all the $.15/mile overage charges.

And believe it or not, three years is a long time in my mind to keep a car. I've averaged 1.35 years over my last five cars. I am at two and a half years now and starting to look for what's next.

 

[DeviousTrap]

Originally posted by: Jumpem

Originally posted by: Naustica
You'll be in worse shape. Don't buy a new car if you're going to rack up mileage and only keep it for 2-3 years.

I don't trust used cars to handle a 100 mile daily commute. I don't have the time or patience to deal with breakdowns. Not to mention how cars even four or five years old start rusting around here.

Only other consideration would be a high mileage lease, and just pay all the $.15/mile overage charges.

And believe it or not, three years is a long time in my mind to keep a car. I've averaged 1.35 years over my last five cars. I am at two and a half years now and starting to look for what's next.

Buy a used 2009 Forester w/ 10k miles for 18.5k. That's new enough to be reliable, but cheap enough to make your numbers look much better.

 

[ggnl]

Originally posted by: DeviousTrap

Originally posted by: Jumpem

Originally posted by: Naustica
You'll be in worse shape. Don't buy a new car if you're going to rack up mileage and only keep it for 2-3 years.

I don't trust used cars to handle a 100 mile daily commute. I don't have the time or patience to deal with breakdowns. Not to mention how cars even four or five years old start rusting around here.

Only other consideration would be a high mileage lease, and just pay all the $.15/mile overage charges.

And believe it or not, three years is a long time in my mind to keep a car. I've averaged 1.35 years over my last five cars. I am at two and a half years now and starting to look for what's next.

Buy a used 2009 Forester w/ 10k miles for 18.5k. That's new enough to be reliable, but cheap enough to make your numbers look much better.

I was about to post the exact same thing. 🙂