Why Do BMW Depreciate So Much?

Why Do BMW Depreciate So Much?


so you’re in the market for a used BMW
but you wonder why these cars depreciate so fast I’m going to explain it to you
now welcome back to the channel I’m your buddy mark with exotic car play place
and today so we talked about BMWs and a lot of other premium German brands and
we wonder why we see a lot of cars like this going on the used car market for
supremely cheap dollars and you have to ask yourself why is the depreciation so
aggressive on those cars look at the BMW world when I peruse the autotrader.com
site it doesn’t take long to find tens of thousands of used BMWs on the market
for sale any given day and a lot of that has to do with several things one of
them being of course there’s just such a supply and not enough demand there
aren’t enough people buying these cars so you have to present good quality
well-maintained cars to begin with just to be competitive the other factor is
over 50% of the BMWs and Mercedes Audi’s are leased more than 50 percent so after
three years of lease when the lease is up ultimately wind up with an owner who
decides to sell the car off get rid of it let it go because they realize after
lease is up and after warranty’s expired they often might be faced with a lot of
reliability issues replacement parts and maintenance associated with a hundred
and fifty thousand dollar car to be in line and commensurate of that type of
car you would expect a large dollar amount to buy a part why well part of it
because they’re built in lower production part of it because a lot of
these parts are shipped from Germany that costs you money yeah maybe it’s
just a mirror maybe it’s just an oil filter but those parts often are shipped
overseas via boat plane whatever it is that cost money the shipping cost money
sure some of those parts are higher quality but unfortunately it’s the
shipping that kills you there the other thing is did you realize statistically
35% is law on depreciation on your average used car
or new to used car well German cars are tend to be a little
higher because it’s a luxury item and because it’s a luxury item it’s not
unbasic necessity of life and as such a hundred and fifty thousand dollar car is
going to lose more than thirty five percent on average then a twenty
thousand dollar Honda so they talk about percentage depreciation sure the Honda
comes out looking rosy but in reality it’s the initial cost of that car when
it was purchased and sold new another reason why these BMWs depreciate so hard
is because the cost the cost associated with all this maintenance in parts isn’t
just because of the parts it’s because of the specialists the technicians have
you ever been to a local BMW dealership lately have you not noticed those
gentlemen walking around in white lab coats and their four booklets and they
walk along like a scientist there’s a personification that they have to
present a professional image but it’s goes more than just presentation of that
image a lot of these technicians have to go to BMW school or Audi school or Benz
school because it goes way beyond normal typical mechanical knowledge of your
typical Ford or even your basic Honda’s or your Chevrolet’s or any of those
types of brands are often a lot less complex these German cars particularly
BMW are very very complex cars because they’re so complex these technicians not
only have to get the basic fundamental training that most pop Prentis mechanics
go through and learn the basics these fine folks have to go through special
training to learn how to deal with a lot of the extensive complexities that
you’ll find associated with these BMW cars and so ultimately the expensive
costs for parts because shipping overseas the additional training for the
technicians that all gets handed down to the consumer initial price of purchase
goes up and of course people become a little skeptical because they know the
complexity of these cars are so intense they become afraid to purchase these
cars as a result a lot of these cars stay in
the market people don’t buy them and a lot of times gravitate to simpler cars
cars you know from the Toyotas and the Honda’s and they’ll even the Lexus as a
premium brand is still a simpler car even though they have a lot of
electronics in them these days are not the same level of complexity that you’ll
find in the BMWs or any other German brand for that matter now you have to
remember the Germans are just a strong engineering culture and so a lot of
these cars particularly BMWs are created built engineered by people that aren’t
satisfied with a basic nut and bolt you have to find waste for that nut and bolt
to work even better so they have to re-engineer and then when they’re done
reengineering it then they over engineer it so with a belief that you know we’ll
build it even better stronger faster sometimes unfortunately they neglect the
reliability of it they look at the function the form follows function a lot
of times with the German cars like the BMWs and therefore they get them a lot
more focused and zoned in on the way these parts work together how its
engineered the performance the sound and how it’s all pieced in one nice
marvelous package unfortunately they sort of at times
forget about the Rd and at times forget about some of the simplistic parts of
being reliable after all think about where BMW came from and a lot of the
technology now you see in everyday humdrum mundane cars like you’ll find in
you know generic little cars that cost twenty thousand dollars a lot of that
technology like the displays and the touchscreens and a lot of these
additional safety features like airbags you know 20 different airbags in a car
and Lane Assist and pedestrian warning systems where do you think a lot of that
came from how about airbags a lot of that came from German engineering which
ultimately then over a few generations trickled into the mainstream and of
course all the other brands picked up on that so it’s all of this injection of
engineering and being ahead and state-of-the-art pause money that money
that Rd goes into complexities complexities that aren’t always worked
out they’re not always perfect when they
come out in the first and second third generations look at the iDrive system in
the BMWs the first early generations were sloppy they were intense and you
needed a rocket scientist to navigate through that system so of course those
complexities aren’t always perfect and when they fail and they do often it gets
very very expensive so as a result there’s track records people recognize
that they get shy they don’t want to buy those cars therefore a lot of those cars
stay on the market the used cars that coupled with the fact that tons and tons
of lease returns come back in the tens of thousands yearly flood the market
three four or five year old cars flooding the market on top of the older
cars that are been sitting there for quite some time that all contributes to
the strong depreciation after all people again they get feared for expensive
maintenance which isn’t that far from the truth are they unreliable well
there’s a lot of reliable BMWs that don’t cost a lot of money to own and
operate I have some I’ve owned some myself but unfortunately there are some
very complex BMWs that have a bad reputation for extremely expensive
maintenance and poor reliability coupled together which created just massive fear
by the consumer and so that reputation precedes itself and unfortunately spills
over to a vast majority of the lineup and as a result prices go down and
sumers run away and of course used cars have to go down in price you want to
sell your car you want to exchange hands you want to buy a new car you’re trying
to sell your used BMW you have to make it palatable for the next buyer good
service records low mileage premium cars are often
bought or a very good deal because of the fear and the expensive repairs
associated with these BMWs so everybody I really hope I shed some light for you
there BMWs great brand some phenomenal values there in the used car market they
represent some of the best cars out there for the bang for the buck so do
Benz and some outies as well but know that you’ve got to do your shopping you
have to buy car that’s going to be reliable for you and you
make sure you get good values everybody I really hope you enjoyed that
commentary please make sure you drop me a line subscribe thumbs up and I hope
that shared some light on the whole concept of why BMWs depreciate so
quickly yes they can be very good no they’re not always directly related to
reliability but at the end of the day fear mongering and cost of maintenance
and ownership as well as a flooding of the market are the key primary reasons
why you can get a phenomenal BMW on a used car market thanks again everybody I
hope to see you soon see you then bye-bye

About the Author: Michael Flood

100 Comments

  1. Cost of ownership is really not bad unless you go back the dealer. Then you get killed. BMW's used to be killer lease deals because of their high residual value. BMW financial realized this and flooded the market with down market cars like the 320i for really good lease deals. As a result, the market was flooded with lease returns that nobody wanted to buy. Some of the more upscale models have their problems but are better than most cars with similar technology.

  2. Emperor's new clothes.(looks at many plastic parts that don't last ,but cost more )I don't agree with shipping is the factor ,what happen to all the other car companies shipping all around the world.

  3. BMWs depreciated significantly because they're maintenance nightmares. This guy doesn't know what he's talking about, shipping costs are minimal, if they weren't made in China crap would be much more expensive. Many Honda parts are made in Japan, so shipping costs are at least equal for Honda parts as BMW parts.

  4. So BMWs are over complex, unreliable shitboxes. BMW sends it's parts for the new Supra joint venture to Toyota for quality control.

  5. Because they've become shit, going from rock solid lifetime ownership drivers cars, to Lease Only Don't Dare Own One Out of Warranty status symbols. Disappointing, since I grew up on the good ones.

  6. I own two BMWs. An e46 2006 M3 and a 2001 325xi. Both have depreciated horribly. My M3 only has 70k miles on it too. It’s crazy. My 325 has been nothing but a money pit. But my M is holding up very well since it’s in very good shape and was well maintained. The importance of buying a used BMW is looking at the carfax of it and make sure the previous owners took care of it. BMW are very reliable but they require a lot of attention for that to happen.

  7. Lexus isn't less complicated than BMW or Mercedes but rather the technology they use is way more reliable by design.

  8. My bro n law bought his BMW for 8000. 6 months later that damn car light up like Christmas. Belt broken, bad sensor, engine light, oh my the list goes on.

  9. They depreciate because the car is unrelaible, especially when they hit the 3 year mark. They are expensive money pits and they break down all the time. BMW’s, Mercedes, and Audi’s should only be leased, never purchased.

  10. My first BMW was an 87 325es and I just loved the way it drove. It was better than almost any other Japanese or American car I had driven. I ended up selling it for a truck for work and I kick myself for it every day. Ive been in love with BMW's ever since.I bought a 2013 activehybrid 3 this year and it is just an amazing car. My best friend bought a 2019 Hyundai accent and it doesnt even compare to my BMW that is 6 years older than it is, and even he admits it. Just realize that buying a used BMW comes with the reality that parts and repairs are just going to cost more so do your due diligence and keep up the maintenance on the car.

  11. You forgot to mention that they’re overly mechanically complex and start tearing apart at the seams around when the warranty’s up. They’re not reliable cars.

  12. Of course a bmw will depreciate if you don’t take care of it and treat it like shit. But if you really take care of it, which for me is one of the rewarding things, you’ll be you’ll be able to sell it at a reasonable price.

  13. Biggest mistake I ever made was buying a new M3 for 120k CAD tax in… Left the lot and the car was probably worth about 60k on the market .. lesson learned never buy a new BMW. They simply make way too many of these and lease them to anyone willing to sign. I'm a BMW fan but their business model is what's holding them back from becoming a truly special brand

  14. 6:18 a retired industrial engineering technician Jhon W. Hetrick patented the inflatable cushion in 1952 ( American) , and Walter Linderer in 1953.(German) but continue .

  15. I’ll put it like this anybody who knows jack shit about BMW will tell you to avoid all v8 engines they’ve made avoid all x-drive model vehicles basically avoid anything that doesn’t have a warranty attached to it and when I say warranty I don’t mean that piece of shit cheap aftermarket warranty companies around here who will actively screw you when the repair estimate is presented if it isn’t BMW new vehicle warranty or bmw CPO or ESC do not go near it.

  16. The astronomical cost and frequency of repairs of BMW after warranty has expired. Just hard to understand until you own one used! LOL!

  17. The answer to why they depreciate so much is, they suck, and BMW has no imagination. Great car if your an Asian teenager, other than that, again, they suck.

  18. As a German and owner of BMWs the ones you buy in US and Canada are worse in a quality aspect then the ones in Europe

  19. Certain M cars are actually good investments. I bought a e30 M3 back in the 90s for $4500 solid it last year for $45k. Also my e46 M3 is worth more now then when I bought it. Plus I have a independent BMW repair shop so I’m not worried about repair cost. Parts r cheap if you know where to get them. Also helps to have parts cars around.

  20. blah blah…instead of ranting would be helpful if you show some data. It all comes down to supply and demand. There is just not enough people buying for the ask price so price must fall to meet demand. simple

  21. No different then any other greedy corporation. BMW has used the same basic drive train for many years now, so where is the research and development? I've owned 2 BMW money pits and never again will I own a German overpriced piece of junk. More complex means more problems! All of the casts and molds for parts were made years ago, so the costs are getting cheaper and cheaper for these companies to build parts. Just like Apple Inc., it costs Apple $350 to produce an iPhone, but they charge $1500, and we wonder why they have the highest market cap. There is no innovation between models, just gimmicks.

  22. If you take care of the German cars (BMW), they are very reliable. Get a good mechanic, if you don't have one, then you need to take it to dealership for maintenance. Autozone or Meineke and other bs shops doesn't know jack about BMWs

  23. Yikes sorry to say but you kinda sound like a BMW fanboi.
    I have a friend that knows a lot about what's actually going on at BMW. It's quite simple really: to them, you, their customers, are suckers.
    $400 for an oil change isn't expensive: it's a scam.
    You'd just need to go any website and see the endless complaints about parts under warranty that BMW refuses to cover eventho they have to per their own agreement. Often it ends up in a lawsuit that BMW loses anyways.
    Fun fact: often they will refuse to perform repairs in Canada that they would otherwise perform in the US because they think Canadians are poor and don't have the money to sue.
    Now I'm sorry for all of you BMW fanbois, but truth is BMWs are big pieces of junk. They fall appart incredibly fast, and very quickly become more expensive to repair than to buy a new one.
    Don't listen to the "oh it's a luxury car so it's normal that it loses value" nonsense. The Camaro almost loses no value over 10 years. Not because it's incredibly reliable and well made, but because most repairs cost less than $1000, where they will cost you over $13000 with BMW.
    So why are BMWs so cheap used? Because the sellers want to get rid of them before they're broken and people on the used car market generally settle for a reliable brand like Toyota.

  24. If you can’t maintain it than why buy it just to complain after? You should have never bought it anyway.
    Same thing applies on everything that is expensive.

  25. Parts a Far to Expensive.. We support their Product..
    Then BMW rapes us for Money over simple bloody Parts….

  26. I own a Yellow 1995 BMW 328i Convertible e36 2.8l N50 Stroker… It is 23 Years old. And everything works Perfectly.
    Including the Roof, Air Con, Trip Computer, Elect windows ect..
    I LOVE IT… Ebay for Parts.. Even though nothing is wrong with my car.

  27. Thank you… For reading our Comments. That is just Awesome. That's why I SUBBED ages ago.
    If I need real BMW info. I come here for great advice on a great Product.
    It's funny.. I have owned 4 BMW's now.. And I have had NO Problems at all. I thought they were GREAT CAR'S.
    I do a quick Pre-check in the ENGINE BAY every 2 Day's. That keeps my BMW going. SIMPLE PRE-CHECK'S.

  28. Very informative. Thank you. Finding a good local authorized mom and Papa BMW MBZ Audi repair shop help decrease some of the dealership costs. Thanks again

  29. Don’t care depreciate !!!!! I been driving bmw for 20 years and Porsche and that engineering is A good quality reliable. About mechanic no problem without warranty no problem those motor are the same like Toyota or other brand (piston,can shaft,block the same shit ) easy to fix the only difference is bmw are more strongly and big parts than others easy easy easy to fix and cheap in parts . We buy all from eBay or amazon that it the perfect world .You don’t know what you talked about
    Germán cars are the best with Japan cars too

    The worst cars are stupid American car those are shit depreciation at 100%

  30. I got BMW X5 no issues and new f80 bmw and F30 no problems and my wife got Panamera same deal no issue

    You just talked trash out your pocket. Germán cars are the best
    If depreciation is ok to me in that way I can buy more $$$$ better

  31. This guy he talked trash German and Japan car are the best in market

    Stupid American car are the ones is just junk !!!!!!!!!!! I own few bmw and Porsche are the best and I don’t need warranty. Because is so simple to do maintenance like is a Toyota car is the same shit the same .. about parts we buy all on eBay or amazon simple cheap and ready , About fix something well , people common scene we have the best University in life YouTube just type whatever you want to learn and YouTube go it simple is best tan university with a bachelors degree simple . Oh god love bmw and love TESLA TOO

  32. Just exaggerated all minute 3:10 😂 mechanic technicians with white uniforms like laboratory 😂
    Exaggerated ••

  33. Jap cars have just as many electronics but the failure rate on a BMW is much higher because they aren't designed to last. Plus crappy plastic everywhere in the engine bay especially the cooling system – Quality? – I don't think so.

  34. I'm happy because now I afford a 2011 M3. I really don't care because the driving experience is like no offer affordable performance car . M cars are not for daily drivers anyway .

  35. This Vid is half true, BMW execpt 4 cylinders are realiable, like audi or mercedes. But what is reliable these days, the good old times where toyote leads the list of most reliable cars are over. Every modern car isnt reliable compared to the 90´s. Customer who only drive leased cars take a new one every 2-3 years, not because the old one is bad or unreliable, because they can and they want the newest fancy stuff. I drive 99% Autobahn with a 9 years old tuned BMW inline 6 diesel, befor the bmw i had a v6 tdi from Audi both cars had over 200k miles on the clock with tuning and alot of topspeed runs. i never ever had any issue. i dont know, but only americans have such big problems with german brands.

  36. Why BMW , Purche Audi and new Benz are even worse than BMW in coast of maintenance and there price reduced more than 35%
    Even American cars are the worse ever cars in selling especially in our market

  37. Well, BMWs are designed around robotic assembly that is why they use O-ring seals on radiator hoses (instead of screw clamps); this means you must replace a lot of parts when the plastic clipholders break. And stuff like plastic electric water pumps make sense-except when they break. Really, the plastic parts alone (valve cover, thermostat housing, PCV system) guaranteed and endless stream of expensive repairs, once you hit 100K miles.

  38. I was so surprised when i decided to look for a Bmw 3s or an Audi A4. There were tones of them selling for cheaper than Hondas of the same year and mileage. I scooped one up (bimmer) that was sold and maintained at the same dealership. I'll keep up with the maintenance, i'm handy and do most DIY repairs on my previous cars.

  39. Unless you're a German technician! we are enjoying owning and repairing for pennies. Enjoying the benefits 💯👍

  40. I have an M3 and my partner a 328i, they are both fun in their own way, but I would not advise anyone to buy BMW. They are both unreliable and maintenance costs for anyone who has owned say Toyota/Lexus are simply ridiculous. The 328i is going in to have its aluminum engine bolts replaced before all the gaskets completely fail and let coolant into the engine. Yes aluminum engine bolts. I suppose they could have used chewing gum instead to save even more weight, but that might have failed while it was still under warranty.

  41. I highly doubt that the cost of BMW parts is high because of shipping. Lots of cars are made in a foreign country but the parts won't cost as much. They cost more because they cost more. No big reason.

  42. Cortez says we need to sell all our BMWs because the world ends in 12 years. 😂😂 Liberalism is a mental disorder.

  43. I owned a BMW X6 and both my turbos went out. That was a $15,000 repair bill. Lucky it was still under warranty. They’re great cars to drive, but you must have a warranty.

  44. I have a 2009 BMW 535i twin turbo and that Car will fly. I've had it for 6 years, no major problems. If you cannot afford the maintenance don't buy it and only let a certified BMW technician work on your car. Barbarian Motor Works the ultimate driving machine. I ❤ BMW the smell of that German leather the ride the look the speed YESSSSS !

  45. I love my 2003 e39 530i.I do most the work myself.I do agree if you're not good to do d.i.y then like any car will cost you at the repair shop.

  46. Get any model Tesla. Forget German cars unless 1) you're German or else 2) you live in Germany. Make sure the car was built in Germany instead of Alabama or So. Carolina.

  47. I have owned a number of BMW
    For the most art very easy to work on and parts are similar to the parts cost of a ford or Holden parts in Australia
    If you go to BMW to buy parts or get a service
    You will pay a lot more the the part to have a bmw sticker and bmw sales person
    Go on line
    My Toyota Prado costs more

  48. Always buy a new one which is under 5 years warranty that allows you to abuse the car to the maximum during the warranty period, ppl who buy the old one is the poor trying to be rich

  49. I'm picking up my 1st BMW ever tomorrow…. 2007 540i E60…
    I confess I am a bit scared but I decided to go ahead with my leap of faith…. I just loved the car so much and I have accepted the fact that it will have to be maintained often and properly

    Wish me luck

  50. I liked this video- very reassuring to us of good taste and tight budgets! What was that video of good BMW deals again? 😉

  51. as an ex BMW tech I agree as BMW techs are of the highest standard with lots of support. Yes BMW can be a pain in the ass but I have the bug and a devoted follower of the brand and run one today. I worked for BMW bikes but the same deal. Buy one but with eyes open IMHO

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