Depreciation can be the silent killer - financially. Especially with the Holden Commodore: one of the worst vehicles for your bottom line. The ownership cost has become outrageous, a fact you cannot ignore - no matter how much you like the roar of a big V8
Hi John, firstly I would just like to say well done. I came across your You Tube channel and can’t stop watching your stories on our car industry.
I wanted to pass on my recent experiences, if for nothing more than therapy for myself. I bought a 2011 Holden VE Commodore SSV auto sedan as a demo in 2012 and thought I’d made a great decision. Top of the line with all the fruit. I had never seen myself as a Commodore owner and are certainly not one of those home grown fanatics.
I’m a tall guy with three kids and need a car that has plenty of room and good on the open road as I regularly need to do 500km trips in a day with a couple of colleagues for work. I have had a history of performance cars throughout my life and could never take the final leap and get behind the wheel of a sensible seven-seater (even though my wife and kids pushed me in that direction). I thought with the Holden Commodore SSV i could have the best of both worlds, enough room for the family, and a car that I’d enjoy to drive on the back roads of Tassie.
Don’t get me wrong, the SSV has surprised me. It’s very comfortable, has plenty of tech and luxury items, and I enjoy driving it. It has now done 90,0000km and I thought it would be a good idea to get out of it before the magic 100,000 ticks over.
I did my research and came back to the Commodore. Based on my budget I could get into a new VF Commodore SSV Redline with all the bells and whistles. So I went down to my Holden dealer (only one that has Holdens in Tasmania) and I explained my situation, plus the fact that I needed to get at least the payout figure of my lease.
When the dealer sent me the trade-in quote I asked if it was for the front half or the back half of the car. This car cost me in the $50,000s when I purchased it, and three years later they were offering me just $18,000! I was shocked. I had heard that Commodores don’t hold their value, but really. Really? There are cars on the web of the same age and distance retailing for around $30k, and this dealer is offering $18 (that's a great profit margin if you can get it).
I’m aware that the dealer won’t make a lot out of my new purchase as it’s with a lease company, so he is not highly motivated to move. So I have attempted to sell privately with no luck. I have dropped the price, changed the ad several times, but it seems that not even the fanatics want to buy a V8 Commodore in 2015.
Based on this I’m now rethinking my previous decision on the VF Redline. I don’t want to have a similar problem in three years when I go to sell again.
John, can you suggest an alternative? I have listened to your thoughts on the Sante Fe and it sounds very good, but will I be happy to move from a V8 to an SUV? Can you point me in another direction? I have $50k to $60k to spend and need plenty of room with lots of tech, but an enjoyable drive as well.
Any help would be appreciated, oh and John, would you be interested in buying a second hand V8 Commodore? It's going cheap: $26k with only 90-odd thousand kilometres...
Look forward to hearing from you and keep up the great work. I look forward to seeing many more of your insightful stories. Regards, Adam
Adam, I think there are several factors at play here.
First, the dealer is probably ripping you off, or attempting to. I just looked up a 2011 Commodore SS V auto sedan (rrp new: $57,290). Average kilometres are 60,000-100,000 for this vehicle, so yours is in the ballpark there. My database is saying $21,600 for a trade-in and $26,000 for private sale. The dealer's objective will be to trade you in for $18k and then sell the car on his lot advertised for $30k and transact for $28 (ish) and skim a $10k layer of cream off your deal. Ten years ago, dealers would be doing this all day long but...
...new Commodore sales have dried up. Demand is through the floor. It's done the whole 'lemmings/cliff' thing. Holden has never sold worse quality products, and the market is reacting to the brand being on the nose. You can read more on this in my recent Holden Health Check report >> It's definitely not a good idea to buy a Commodore now, or in the foreseeable future.
Used car prices merely reflect supply and demand. Demand is very low, and the things are in chronic over-supply. Economics 101 tells us only one thing can happen: The price falls through the floor. If you go again with another SS V, history will repeat in 2019 when you trade it in, only worse. A lot worse.
Effectively, any mainstream car that costs you $40,000 over three to four years of ownership is a joke. The depreciation in this scenario probably cost you more per week than the petrol. (100,000km = 25,000km per year over four years. 20L/100km = 5000 litres per year. Even at $1.75 per litre that's $8750 per year ... and the depreciation is costing you $10k+ each year. I mean, seriously, WTF?)
Tasmania is geographically isolated, and this facilitates an effective monopoly for dealerships. In this environment dealers are disinclined to provide the best trade-in or the sharpest price on a new vehicle.
Thankfully, however, the internet and our brokerage model releases the average Tasmanian dealer's grip on this geographically based monopoly. I had a very nice e-mail from a Tasmanian bloke the other day, who managed to save $5000 off a Santa Fe by using our system and effectively shopping elsewhere. Read his Santa Fe Testimonial >>
For comparison purposes, a 2011 Subaru Impreza WRX STI cost $60k new (rrp) and trades in today routinely for an average $33,600. (Private sale: $39,600.) Arguably, I'd have more fun in that car on Tasmanian roads than I ever could in the Commodore - especially in the wet.
I say this because the new WRX STI is available for the first time as a refined 'Premium' vehicle in addition to offering the outrageous grip levels it's always been renowned for. Read my Subaru WRX STI review >> That car is just drowning in technology in the way a Commodore isn't. (Fundamental driveline and performance technology - outrageously capable.) Frankly, as good as the Hyundai Santa Fe is, I don't see you transitioning to that as a totally happy camper.
Here's what I would do if I were you: I'd have a look at that STI and then get back to me here >> Let the broker go to work on two things: cutting the acquisition price of the new vehicle, and pumping up the trade-in price (to the extent that's possible) on the Commodore SS V.
If you decide the STI isn't for you, get back to me as well, and I'll try to track down some other viable options.
Best regards, JC