Merits of finding ways for others to take the (initial) depreciation hit...

[Boardmember]

I recognize the actual depreciation curve for my 4runners, and the reason is why my two daughters and wife each drive one.

I've got a good long-time relationship with my local dealership and my last few purchases have been Certified, low mileage, couple-year-old models that fit my need. A'12 SR5 with 49k miles recently fit the bill for my youngest to take to college in the fall. There were, however, scratches on the interior door handle. And it didn't have that plastic/leather off gassing that I so dearly love. Other than that, whatever reconditioning that was done was excellent. Let me restate that I know and trust a couple of the key players in the dealership.

It takes a little patience to run across the EXACT configuration you want, but why do more not do this and/or what are others experience and thoughts about this practice?

 

[didiumus]

It is pretty hard to find one for a good price

Sounds like you have found some gems.

Here where I live recent 5th gens are very hard to come by, and a 2-3 year old truck with 30K - 50K miles on it only saves you a 2 - 4 grand, so in my view it isn't worth the tradeoff. I just ordered a 2016 TEP and I looked for months at used. I also have trust issues that others don't maintain their vehicles like I do.

Scott

 

[mattleegee]

Same issue as above, when i was looking to get into a 4runneri wanted to get 1-3 year old with 10k-40k miles and save a bunch of money because $40k seemed like alot of money.

Ended up getting a brand new one, could only save $2000-$5000 and since i was able to get a few thousand off MSRP it made sense to go new

 

[Blitzkrieg]

Around here 4Runners hold their value extremely well and you are looking at real close to a new one in price for a really clean one or two year old example.

I've had good success with buying gently used 4Runners in the past, but with my 2015 TE I just decided to buy one off the truck before it even hit the lot.

The other issue in Colorado is we have had some really bad hail the last couple of years so the odds of a "nice clean" newer used vehicle having been hailed are not small.

That doesn't always show up on a CarFax because often the dealers will sell them at huge discounts and then people have them fixed at Dent Doctor but the car is sold as new so that never hits the CarFax.

Don't get me wrong, the guys that do paintless dent repair do a great job, but you still have to remove a bunch of interior panels and such and that is an invitation to squeaks, rattles and groans.

Where I bought my 4Runner on Arapaho Rd, there is a whole slew of dealers and a really bad hail storm hit that area last year (bad enough to bust the skylights out at the Nissan dealer and the total inventory loss was like $12.5 million. The storm only lasted about 15 minutes but it wiped out pretty much every vehicle on all the lots.

If I had to commute I would probably pick up like a Honda Civic that was damaged and just leave it damaged so that 1) I wouldn't worry about door dings and 2) If it has to sit outside could just happen again.

You basically are getting a brand new car for $5-10K off, just that the sheet metal looks like shit.

 

[Boardmember]

I know I may get chastised for posting this "What did I Pay?" but for the super clean SR5 Pearl White, cross bars and leather, I paid $26082 + tax, minus good book value on the trade. But it took a few months to come across what I was looking for.

I'm soon to try to do something similar to replace my '11, 150k miles Tundra. Will see how that works out.

Patience boy, patience. (Me)

 

[flyinhawaiian01]

What makes you think people aren't doing this exact thing? Try counting how many 4 runners there are on places like CarMax, then compare it to something like a suburban or expedition, pretty sure you'll find a big difference in numbers there.

FWIW, I bought used, there were NO 4runners in my area and surrounding areas up to 200 miles when I was looking. I got EXTREMELY lucky and pulled into one of the local toyota dealerships while working next door on a new Kia dealership. There it was, just in, only 3 or 4 days on the lot. 3 hours later I had the paperwork done! Picked it up the next day...

I think you'll find that it will get easier to find them as they get older and newer models come out, but toyotas in general keep their value and rarely have major issues, which keeps people from trading them in or selling them. Now, try finding a mint '80's 4 runner with sub 100k mileage for under 8 grand, betcha can't find more than one or two across the whole country!!!

 

[Boardmember]

Flyin' - too many discussions about: What did you pay? Is Premium worth the extra $? Limited or TE?

Those discussions don't seem to mention the "gently used" option and I was asking. I'm a long time Toyota product owner and relatively new to the Certified game. I've had a bunch of 4Runners, starting in 1994' so as I stated, I very much understand the depreciation curve.

That's all.

 

[1engineer]

You are not thinking. Every used 4Runner is being snapped up quickly. So much so there is a higher demand than supply hence the excellent residual value. If they languished on the lot they would be forced to discount them.
This forum is NOT representative of the general buying public.

 

[philsey]

Sorry, but I don't subscribe to your theory. Every vehicle has a life - whether it's in miles, or years - actually it'll be some of each.

So, regardless of the fact that you saved X dollars by buying a vehicle X years old, you also lost X years/miles use of that vehicle because you just bought it X nearer it's end, whatever that may be.

Further (even tho you bought CPO) you simply replaced one (new) warranty with another (CPO), both of which you paid for buried in the price of said new or used vehicle.

Now, did you really save money? I'll give you a "maybe....some" - but in fact it's incalculable as there are variables - two being you do not know for certain it's pre-purchase treatment, nor do you know what or when it's life-end will be.

Bottom line is you're happy with it.

:couch2:

 

[Boardmember]

Really, I was sitting here on a Sunday afternoon and thought this might garner some thoughts. No more, no less. Certainly not needing or necessarily expecting validation from this enthusiast group.

Philsey - generally, you're right, but...a couple things: Your point assumes I will keep these vehicles 10-20 more years until the hubs literally rot off the axles. We won't. It's financially demonstrable how the depreciation curve works for the average 4Runner. I let buyer #1 take the peak hit, become buyer #2 and sell/trade before that 12th/15th/20th year when the vehicle depreciates to "not much," or becomes a collectible (unlikely, but certainly a variable in the model). The curve flattens significantly at that point in the 4R's life.

You lose less than you save.

A huge part that you also appropriately reference is the projected maintenance expense over time...4Runner itself ("screwed together in Japan") affects that as does my 2X reference to knowing the dealer.

Works for me. Might not for anyone else.

Newbies: DO NOT try this bad idea at home.

 

[cjacob316]

You lose money buying cpo vs pre owned vs private sale. You still had a decent depreciation on your 4Runner because you cannot turn around and sell it for what you paid, but the dealer can sell it a year later for the same price they initially sold it to you. The idea that you don't suffer immediate depreciation on a used vehicle purchased at a dealer is just wrong. You pay a couple extra thousand for a vehicle that has gone through cpo, which is basically an inspection and cleaning. I managed to save that fee on my wife's Camry because I got to the dealership while it was in the back waiting to go through cpo and pulled it out of line.

 

[Boardmember]

I didn't say zero depreciation on a used/CPO vehicle, I just said I've caught it on a different place in the curve. You appear to have read that into my point, and I wanted to clear up that I'm not saying that there's NO depreciation.

Yes CPO is ~$1500, but I get some addional warranty that I do choose to pay for. That value proposition works for me.

Look. Alternate views aren't necessarily wrong, but for someone that's not thought through this as an option, maybe they picked up something useful.

Should we talk about leasing now?

 

[salong53]

I bought mine new for a few reasons, but they were all based on the assumption that I plan to keep this thing for a long time. At this point I see no valid reason to trade it within the coming decade, and as long as I can keep my head out of the future 6th gen forum, then hopefully I can resist the urge to buy a new one.

I couldn't find the deal I wanted on used ones in my area that were in that "3 years or less and 50k miles or less" condition. If I did they were former rentals. I searched for at least 6 months. I really wanted a trail edition, but I was willing to go for a 5.5gen SR5 because I like the front end changes.

The other reason was this:
If I buy a new vehicle, finance it for 5 years, and have payments at $XXX, then when it's paid off I have a 5 year old vehicle and I know how it's been treated in the fairly low miles that are on it. Now, if I buy a 2 year old vehicle, finance it for 4 years, and have the exact same monthly payments, then when it's paid off I have a 6 year old vehicle who lost its virginity to some other owner. This was the reality when buying a truck that depreciates as slowly as the 4Runner, so I was willing to pay for another year.

 

[Boardmember]

Perfect example of two differing (not competing) philosophies. Thanks.

 

[internski]

I also looked used 2-3 years but found the difference from new wasn't enough to sway me from buying new 2-3k savings. Plus with a warranty plus I get up to $1k for hand controls that I wouldn't get if I purchased used.

 

[TN_TEP16]

In my city, most of the 2 year old 4R advertised prices are within 10% (mostly less) of a new 2016. Enterprise car sales by comparison has better prices with less mileage (usually less than 35k) than CPO.

Example:
A CPO 2015 SR5 RWD with 16,571 miles lists for $32,000 after sitting at $33,000 since Feburary.
A new 2016 SR5 RWD on the same lot lists for $34,780. This dealership seems pretty consistent on discounting no more than $2000 off MSRP.
Enterprise Car sales has 2015 RWD SR5's around $31,500 with the highest mileage at 28k. (except for one @ $36k with 26k miles and $1552 transfer fee to Memphis)

When I was shopping for my 4R, aside from driving 100+ miles to MS, there was no incentive to buy used in my area. They are just priced too high used and aren't "that bad" priced new. Not many private sales to speak on.

 

[Gotshotgun]

There was nothing used in my area that seemed worth the price so I went new. They are hard to find used, and also at a good price.

 

[cjacob316]

I didn't say zero depreciation on a used/CPO vehicle, I just said I've caught it on a different place in the curve. You appear to have read that into my point, and I wanted to clear up that I'm not saying that there's NO depreciation.

Yes CPO is ~$1500, but I get some addional warranty that I do choose to pay for. That value proposition works for me.

Look. Alternate views aren't necessarily wrong, but for someone that's not thought through this as an option, maybe they picked up something useful.

Should we talk about leasing now?

Your title literally says "ways for others to take the (initial) depreciation". Initial depreciation is inevitable when buying from a dealer, new or used. Any other "depreciation" you get come at the expense of life of the vehicle and it makes no difference weather the first or second buyer pays for it, it's consistant. Whatever they lost on the front end, you will loose at a greater rate on the back end because you're a second owner and the vehicle is drastically older in age and "outdated" in design. There is a big difference in the appeal of a 4 year old current gen and an 8 year old previous gen. If you compare the numbers you provided us on your sr5 dealer vs private sale, you lost $4k without adding a mile to the vehicle. My '15 however has a private sale value of $4k less than what I paid a year ago.

You didn't really "save" on depreciation, you just bought a cheaper 4runner

 

[Boardmember]

Cjacob - I disagree. But that's one thing forums are good for.

Find an old Econ textbook and refresh: depreciation curve. It's not a flat line. We might discuss our opinions of the shape over the life of the vehicle (we appear to be doing that, actually) and we may have life experience showing us two entirely different models. But a curve nonetheless.

You also may have misread the title to fit your opinion. Read it again and start with the word "Merits..." That implies there may be more than one opinion here, which is what I was wanting to see if there was any interest in discussion.

This forum is home to an enthusiast group and some of the responses, in my mind, coincide with that.

 

[1engineer]

Your title literally says "ways for others to take the (initial) depreciation". Initial depreciation is inevitable when buying from a dealer, new or used. Any other "depreciation" you get come at the expense of life of the vehicle and it makes no difference weather the first or second buyer pays for it, it's consistant. Whatever they lost on the front end, you will loose at a greater rate on the back end because you're a second owner and the vehicle is drastically older in age and "outdated" in design. There is a big difference in the appeal of a 4 year old current gen and an 8 year old previous gen. If you compare the numbers you provided us on your sr5 dealer vs private sale, you lost $4k without adding a mile to the vehicle. My '15 however has a private sale value of $4k less than what I paid a year ago.

You didn't really "save" on depreciation, you just bought a cheaper 4runner

Exactly. If he were talking about almost any other vehicle the first hit is the hardest. With the 4runner? Not really.