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.

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

Put simply, you lose less.

Eg get a used kelisa 5 years ago at rm20k, today you sell for rm13k. You only suffer rm7k depreciation then.

Compared to the first owner, let's say he bought that kelisa rm40k, sell you rm20k, so he suffered rm20k depreciation.

Nope. If u buy  2nd hand car which needs alot of repairs, u will end up spending more. And btw, when u repair ur car u need to pay cold hard cash. Whereas when u buy new, u can put everything into the loan. So new is always better than old unless u buy from a trusted fren and u knoe the cars history. If not, go for new

Nice one cybermaster, LOL they don't get your meaning of the RM20 531.