Finweek English Edition - - Cover -

TO TEST THE VAL­UES of late-model used ve­hi­cles, a few friends and I tried to trade in our ex­ist­ing ve­hi­cles on new ones. My own car is a Honda Ac­cord bought in March 2006 for R225 000. The out­stand­ing bal­ance in terms of its 60-month HP – that is, the amount to pay off – is R157 000. The car has only done 24 000km.

The first of­fer on the Honda was in Zam­bezi Road in Pre­to­ria, where I was of­fered R105 000. Af­ter some ne­go­ti­a­tion and on the strength of its low mileage the of­fer was in­creased to R115 000, plus a dis­count of R10 000 on a new 2008 Ac­cord, which re­duced its price to R270 000. Honda in any case of­fers a R10 000 dis­count plus R10 000 to any­one who comes in through its doors. The true trade-in value is R105 000.

With a bit of push­ing I could per­haps raise the trade-in price to R125 000. That’s still R27 000 less than the out­stand­ing amount on the car and R155 000 less than the pur­chase price of a 2008 Honda Ac­cord, which ac­tu­ally dif­fers very lit­tle from the 2006 model.

The costs for me are enor­mous. First of all, af­ter 30 monthly pay­ments of more than R5 200 each, the car is still worth R47 000 less than the out­stand­ing bal­ance. The dif­fer­ence be­tween the 2006 model and the 2008 model is R155 000. That’s af­ter only 24 000km trav­elled in the 2006 model. That works out at an ef­fec­tive de­pre­ci­a­tion of R6/km. It’s def­i­nitely cheaper to hire a car from Avis.

Af­ter a day of kick­ing tyres, my friends re­ported the fol­low­ing tradein val­ues on their cars. • HONDA AC­CORD, 2006 model, 24 000km on clock: Trade-in of­fer of R105 000 against book value of R145 000 is a value loss of al­most 30%. • CHRYSLER GRAND VOY­AGER, 2003 model, 120 000km on clock: Trade-in of­fer of R80 000 against book’s R141 500 is a loss of 45%. • VOLVO S40, 2005 MODEL, 72 000km on clock: Trade-in of­fer of R90 000 against the book’s R163 300 is value loss of 45%. • AUDI A4 TDI, 2005 model, 62 000km on clock: Trade-in of­fer of R115 000 against book’s R167 500 is value loss of 32%.

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