Anyone starting to realize that this is loosing value at a crazy rate?!

[DocCola]

The BRZs price are dropping like a rock here at the dealers. They were at MSRP or higher this time last year, some with a 2k markup. Now they're listing them for well below. The one I looked at yesterday had a sticker of 28,XXX and a MSRP of a grand higher. They only want 26,500 for it. It was hard to resist that but I'm re-building my credit (nasty divorce a few years ago) and I'm not where I want to be yet before I jump into the BRZ.

I guess the fact is as the car becomes more common and there's more and more on the road, no matter what edition, there's less demand for them which means price goes down for new and used. Personally it doesn't matter to me because once I buy my BRZ it's warrenty will likely be voided within a few months and I plan on keeping it a LONG time.

[extrashaky]

The thing to remember is that ALL used cars are dropping in value more quickly now than they were a couple of years ago. When the economy was bad, more people were buying used cars. The higher demand for used cars drove up the prices. Some used cars were going for almost as much as their new counterparts.

People have gotten used to that, but now that the economy is recovering, the market is shifting back toward new cars. That means the prices of used cars are dropping again. We should be seeing a normal depreciation pattern for used cars again pretty soon, if it's not already here.

So there's no reason to panic. The twins dropping off in value in their first year as a used car should be expected. It's still too early to tell what will happen long term. Kelley's estimates put it at right around 50% depreciation at the five year mark, which is just about average. I think it will beat that estimate if some major defect doesn't make itself known in the next couple of years.

Originally Posted by ZionsWrath

I never understood how investment and car can be used in the same sentence when talking about new or slightly used vehicles.

It's a different sense of the word.

Some people hear the word investment and immediately think "monetary return." How much money will I make from this item? In that sense, stocks are bought as investments, whereas most cars would not be.

But that completely ignores intangible benefits.

Some people hear the word and just think "good purchase." If I find an 80" HDTV on sale at 70% off its normal price, I might colloquially refer to that as a "good investment" even though I don't expect to get any monetary return from it at all. On the other hand, I will get enjoyment out of it, and enjoyment has value. If I could put a monetary value on enjoyment, I'm pretty confident I would get more enjoyment out of that purchase than I paid for it. So in that sense it would be a good investment.

In actuality, these two approaches are well established in business and science. A member of the first group above is thinking like an accountant: money in and money out, with no value placed on intangible benefits. A member of the second group is thinking like a behavioral economist. Economists often attempt to calculate the monetary value of intangibles like enjoyment and utility, and they include those when considering profitability. Accounting profit only considers money. Economic profit includes money AND intangible benefits AND the value of opportunity cost, or what you either gain or miss out on by making the deal.

Usually when people refer to these cars as good investments, they're thinking like behavioral economists. If I get good use out of it, that also has value regardless of its resale value. I bought a purpose-built sports car for less than $30K that I expect to give me more than I paid for it in both enjoyment and utility. I could buy something cheaper, but I would not enjoy it as much. Therefore a cheaper car could easily be a bad investment in economic terms if the value of that enjoyment lost (opportunity cost) is more than the monetary difference in price between the two cars.

I am actually an accountant, so I understand the monetary component pretty well. But I think like a behavioral economist. About everything. I understand that if I only considered the monetary value of my purchases, I would live on rice and beans and never have any fun at all, and there would really be no point in living. Once you understand that, it becomes a lot easier to stop feeling guilty about luxuries or purchases that are not necessary.

Now to put this all in perspective:

I am actually making money on my BRZ at the moment. I drive for work, and I get paid tax-free mileage reimbursement. I am currently receiving more in mileage reimbursement than it costs me to own and operate the car. I expect that condition to continue for the next four years or so, at which time the residual value of the car will still be high enough that I will be well ahead monetarily.

So as an accountant, I'm happy, because this car is profitable to me. Thinking like an economist, I'm extremely happy, because on top of the accounting profit, I also have all the enjoyment I get out of the car. Either way you want to look at it, this car really is a good investment for me, even though it's a "depreciating asset."

On the other hand, I am currently in the process of rebuilding a 14-year old Jeep. I'm estimating that it will cost me a total of $22K to get it the way I want it, at which time the resale value will be about $15K. From an accounting standpoint, this is a real loser, and I shouldn't do it.

But from the viewpoint of a behavioral economist, is the enjoyment and utility I will get out of having the Jeep set up the way I want it worth the $7K? I think so, but I really won't know for certain until it's finished. I'm willing to take the risk. I might end up taking a loss economically. But even if I do, I'll learn something from the experience, and that has value also.

[Annahra]

Thoughts on why the BRZ is holding value better than the FR-S? Rarity? Options?

[gily25]

It's not a Scion Seriously though, different reputation, different set of buyers. I think the people who bought a BRZ invested a little more in the beginning so they had to be more certain of their purchase. Meanwhile used FR-S' started to show up so quickly at the same time people complained about "power" that I think it put some people off being interested. Plus if memory serves me correctly, less were made.

I wouldn't be overly concerned with current value unless you're selling. I don't think we'll see this being a long-term production vehicle so it probably will hit a certain point, say $10k and not really fall below that except for poor examples. At the end of the day it's not an exotic so it was never going to have a "stable value." Don't get me wrong, it's worth cherishing while you own it and keeping it in nice condition but for as long as you can buy a new one and the production numbers are decently high, then used prices are always going to fall.

[fang_gt86]

Originally Posted by MokSpeed

Drive the crap out of it now. Then when the motor gives out slap a 2JZ in it. Problem solved.

Yep.

Buy the car for $25k+ brand new.

Spend $15k+ for mods so you can drive the crap out of it.

Spend another $5-10k for swap and more mods.

I can see $50k into the trash. More power to you if you got that kind of money for fun!

[extrashaky]

Originally Posted by fang_gt86

Yep.

Buy the car for $25k+ brand new.

Spend $15k+ for mods so you can drive the crap out of it.

Spend another $5-10k for swap and more mods.

I can see $50k into the trash. More power to you if you got that kind of money for fun!

Luckily for me, I don't need to spend all that money on mods to enjoy this car.

[driftartist]

supras and rx7s are still at least half the msrp value when they were released and that was 16 years ago so what does that tell you.

[funwheeldrive]

Originally Posted by Annahra

Thoughts on why the BRZ is holding value better than the FR-S? Rarity? Options?

I bet that Subaru badge is helping a little bit.

Originally Posted by driftartist

supras and rx7s are still at least half the msrp value when they were released and that was 16 years ago so what does that tell you.

And yet, you can find clean RX8s for under 10k all day long.

[MokSpeed]

Originally Posted by funwheeldrive

I bet that Subaru badge is helping a little bit.

Throw a Toyota badge on your FR-S then lol.

[glorydays]

Re-sell value means nothing to me, I'm keeping mine.

[DeeezNuuuts83]

Originally Posted by funwheeldrive

I think these cars are going to be like the integra gsr or prelude. They made a decent amount of the twins, but a lot of them are already pretty heavily modified, and that number is only going to increase. Sure, they won't go up in value, but stock, clean examples of these cars will still be desirable years from now imo.

They're not "heavily modified" the way that cars were during the heyday of the cars you mentioned. When the import tuner market started to blow up ~15 years ago, not everyone knew what they were doing. It was trendy for your car to not be stock, and very few people thought about the long term... so people were physically modifying things, especially before aftermarket parts were massed produced. In the beginning before companies were flooding the market with aftermarket parts, people were cutting stock springs, having custom exhausts made, etc. So a lot of mods were done that weren't easily reversible or without their lasting negative effects, especially once people started doing weird paintjobs or putting headlights/taillights from different cars onto theirs with a lot of bondo and patience. Plus since the market was in its infancy while a lot of those getting into it were fairly young, all of that shortsightedness combined with changing laws made things like law enforcement and smog tests a huge pain in the ass in the end.

Nowadays, even the younger crowd who is the same age I was when I first got into modding at least knows what they're up against. Sure, there are some who do things to the car anyway that will end up having similar lasting negative effects (i.e. the Hellaflush crowd), but they at least have the knowledge available that we didn't have, or had to learn the hard way. It is for this reason that I haven't modded a single car since the Honda I had 10-15 years ago.

[Boxer486]

Originally Posted by AVodka14

You'd be surprised someone that values the 'stripped down version' (i.e. '13 FRS) and first MY in 10 years. The special edition rides are nice. But they are as you said "a BRZ with an FRS front-end". Not saying much there. When we have the true FRS. Only time will tell.

Lol, Scion is going to have the stripped down version as long as they exist and they will be all over the place. Plus few people in their right mind wants a first model year Toyota with all those issues.

Btw, us 'BRZs with a FRS front-end' have the true 86. If you want the pared down FRS to be worth something, go sell it in Japan.

Oh, and I bought the car that had exactly what I wanted right now, not to please someone else or get more resale later. Go figure.

[hmong337]

No point in selling. Just keep the car. If I were to sell now, I'd lose $12000. Better to just drive it till the wheels fall off.

[fang_gt86]

Originally Posted by driftartist

supras and rx7s are still at least half the msrp value when they were released and that was 16 years ago so what does that tell you.

Somewhat true. It's extremely rare to find a good condition, 100% stock, un-molested, un-riced out twin turbo or RZ Supra for under $20k. Some poped up now and then for high $20ks to $30k+.

I just have a feeling that whatever make these late 90's Japanese cars popular/holds value may not do the same to the FRS, BRZ & GT86. Different time. Different wants and need?