In Australia a 2008 Camry is cheaper than a 2008 Peugeot 407.

Here in Malaysia it is the other way round.

Reason :
Used car dealers jacking up the price.
People who didn't do any research and simply buy what is common on the road, uncle aunty recommendation.

In Australia, the new car price was much cheaper than in Malaysia, while their second car price was much cheaper as well. Over they, the Japanese car was not as good demand in bolehland. the maintenance cost especially the spare cost was the same among the japan and continental car. while in bolehland, due to the in flow of cheap and convenient  source for the used part from chop shop, thus maintenance cost for Japanese car like T & H was much easy available and cheaper as well. But over Australia, the labour cost for a mechanic to fix a part was not cheap. Due to geographic location, they are not economic to import the chop part from Japan as well. In Bolehland ,  they are  not much workshop that able to  fix the continental car problem ,and the avaliable of used part for continental car was quite rare and expensive. That above explain why T &  H have higher RV in Bolehland compare to Australia.

No. During year 5, you are getting back 100k for the camry as opposed to 70k for the 407.

Bro, how can u possibly say that maintenance and FC are major elements of resale value? Resale value is resale value. Its not the same as maintenance costs and fuel efficiency. When u add up everything then its called TOTAL OWNERSHIP COSTS. Im not refering to that. Im refering to the RESALE VALUE in particular. Im refering to the ACTUAL COST involved.

Friend, uve already sold your car. What 30K more are u talking about? This calculation is to show 2 separate cars being sold at the stipulated trade in prices.

Friend, RM30k is the difference between what you can get from 407 and Camry (RM70k vs RM100K) when you sold your car at 5th year lo. Simple as that. If we are to take TVM into consideration, the difference would be smaller. But this is not the point, the main point is, why can't you accept the fact that based on the example you have provided, 407 will loss more than Camry from the cash flow perspective although you can buy the 407 at cheaper price for a start?

Friend, RM30k is the difference between what you can get from 407 and Camry (RM70k vs RM100K) when you sold your car at 5th year lo. Simple as that. If we are to take TVM into consideration, the difference would be smaller. But this is not the point, the main point is, why can't you accept the fact that based on the example you have provided, 407 will loss more than Camry from the cash flow perspective although you can buy the 407 at cheaper price for a start?

For your argument to hold through, then you are going to take the cost over the entire period of the loan (early settlement penalty etc at point of disposal). It is no longer a simple net loss calculation based on how much you have paid (which is the basis for part 1 of your calculation) but rather a the gain/loss against the actual loan amount.

Like I mentioned earlier, Part 2 of the calculation at the moment is wrong as you have factored in the difference in installments twice.

An oversimplification and a wrong one at that. If you substitute in the amount that you would need to pay up to settle the loan and then net that off against the 'resale value' of 100k and 70k you would get a much better estimate.

I suspect that the Camry would still be cheaper as the % depreciation is much lower, even after you factor in the interest rate of say 3%.

  Oh your loan tenure is 5 years also, lagi senang then. Your reasoning just plain doesn't hold water cause it is then nothing but a cash flow computation. You paid more out in cash for the 407 as compared to the Camry (disregarding the time value of money of course).

I maintain that the second part of your calculation is double dipping.

Based on TS info
Summarise (just on car price issue)

Pg
- total money need to spent = 85,367
- Downpayment 13,688
- monthly hire purchase 2,361

Camry
- total money need to spent to drive it for 5 years = 75,913
- Downpayment 15,499
- monthly hire purchase 2,673

So it is cheaper to drive a Camry for 5 years, (85,367 - 75,913) = 9,454
With a little bit higher downpayment and monthly payment, save 9K+ over the 5 years.

This calculation was shared by a LYN forumer some time back which ive tweaked to suit.

Very often, we always focus on the resale value of a particular model while ignoring the start up costs and monthly loan repayment costs. This tabulation will show you why cars with lower resale value may actually be a cheaper. This is of course assuming maintenance costs are similar.

Peugeot 407 Premium 2.0L

Purchase price (2008) = $136,888
Downpayment = $13,688 (10%)
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly loan payment = $2,361
Total loan paid = $2361 x 60 = $141679
Total paid for car = $141679 (loan) + $13688 (dp)= $155,367
Resell car 2013 (after 5 years) for $70k (49% loss)
Total loss (after 5 years) = $155,367 (what you paid for) - $70,000 (what you get) = $85,367
Toyota Camry 2.0L

Purchase price (2008) = $154,990
Downpayment = $15,499
Interest rate = 3%
Tenure = 60 months (5 years)
Monthly payment = $2,673
Total loan paid = $2,673 x 60 = $160,414
Total paid for car = $160,414 + $15,499 = $175,913
Resell car 2013 (after 5 years) for $100k (35% loss)
Total loss (after 5 years) = $175913 (what you paid for) - $100,000 (what you get) = $75,913

For simplicity, let's assume service/maintenance costs are equal. Thus, after 5 years, a Peugeot 407 vs Toyota Camry:

407 has HIGHER total loss
$85,367 (407) - $75,913 (Camry) = $9,454

407 has LOWER start-up cost
$15,499 (camry) - $13,688 (407) = $1,811

407 has HIGHER monthly positive cash flow through lower installments
$2,673 (camry) - $2,361 (407) x 60 months = $ 18,720
SUMMARY

This clearly shows that although the Peugeot 407 has RM 9,454 lower trade in value after 5 years but it gains a total of RM 20,531 from lower start up costs and lower monthly loan installments.

Thus, buying cars with lower resale value isnt actually a poor financial decision. So i think with this, we should not allow resale values to govern our choice of vehicles. Safety, value for money, specifications and maintenance costs should take precedence.

What do you think?

You may have comparing the wrong segment or value, you should have compare the 407 with Altis not camry and then you will have totally different answer.

In my opinion I will not buy a second hand Toyota/Honda simply because the resale value is high.

I don't see why I should pay a high price for a used car that lacks features found in another similar car.

Therefore if I were to buy a used car, I'll choose a European car.
It has more features and costs less.
I also won't suffer that much depreciation anymore because the first owner has already absorbed it.

If more people buy second hand European car instead of second hand Toyota. The resale values of these cars will reverse.

Bro, how can u possibly say that maintenance and FC are major elements of resale value? Resale value is resale value. Its not the same as maintenance costs and fuel efficiency. When u add up everything then its called TOTAL OWNERSHIP COSTS. Im not refering to that. Im refering to the RESALE VALUE in particular. Im refering to the ACTUAL COST involved.

Agree!

Good one cybermaster!

But buying used for any car is even better IMHO..

Why is it buying used car is better in terms of resale value? Any good example?