Daimler AG is one of the world’s most successful automotive companies. Within its many divisions are the Mercedes-Benz Cars. For this article, our focus will remain on these cars.
The three-pointed star is associated with quality and durability dating back to its origins in 1886. From there, the name Mercedes-Benz has been built and today is synonymous with German automobile engineering.
Depreciation numbers for Mercedes
We have had to lean on a lot of research and gleaning from other people’s datasets to establish findings for this article.
To establish trends in this paper, depreciation is sampled across the models to determine a variance or correlation within the Mercedes-Benz brand.
The sample represents the depreciation of a new car over the first three years of ownership.
Here are the depreciation rates after 3 years:
- R Class: 91%
- E Class: 55%
- CLS: 48%
- CLK: 41%
- S Class: 34%
- B Class: 28%
- M Class: 26%
- AMG: 22%
- SLK: 20%
- Vito: 17%
- C Class: 13%
- A Class: 6%
The depreciation disparity between models is quite pronounced, that is, considering these models are all considered luxury vehicles. It must be said that the bigger luxury models are projecting the higher depreciation rates.
This is consistent with the traditional trend for more expensive vehicles.
It’s just that this type of disparity is not typical – consider the difference between R Class (91% depreciation in three years) versus the C Class (performing very nicely at 13% in the same period).
E-Class and S-Class Mercedes-Benz cars are right up there with the luxury cars that depreciate the fastest.
If that’s the case then let’s have a look at what year Mercedes-Benz is typically at its most favorable for purchase. This information would tell us when the depreciation would be plateauing and be at a low level of risk.
The best value would be that year which is best for purchase, so, a 3-year old model would be the best model to purchase in the case of Mercedes-Benz.
Years with good value would essentially be an acceptable buy, it’s just that there might be a spot of unnecessary depreciation, but nothing drastic, or high risk.
Here are the average depreciation numbers for Mercedes cars:
|Year||% Decline (YOY)||% Decline||% Paid||% Left||Years Left||Net Used Value ®|
The table shows depreciation numbers based on prices, sales, and other related automotive data sets.
Here are some brief descriptions of the columns:
- Year – The brand model year.
- % Decline (YOY) – Year over Year price decline.
- % Decline – Total percentage of decline.
- % Paid – Percentage of the original price paid for that model year grouped by the same trim levels.
- % Left – Percentage left of reliable years with relatively predictable costs of the vehicle.
- Years Left – Current industry average of years remaining with predictable maintenance and repair costs.
- Net Used Value ® – a ranking & sorting index to help you find the model years with the most value.
What’s the sweet spot age when buying a used Mercedes?
As shown below you should go for a 3-year-old Mercedes if you want to do the best deal (and retain as much value as possible).
2016, 2015 & 2017 Mercedes-Benz models are currently the best values. On average, one can expect to pay only 54% of the original cost with 75% of the vehicle’s lifetime remaining for a 2016 Mercedes-Benz.
That gives it a Net Used Value® score of 20.69 which factors in annual maintenance costs, price decline, reliable years left and available inventory.
The 2015 & 2017 model years currently have a generally low risk of any significant depreciation over the next several years.
Sales and Depreciation of the C-, E- and S- Class Models
We used data provided by UsedFirst to determine that all three models perform at a better rate than the Industry Average. The E-Class takes a significant dip within the first three years which is in line with the previous dataset we used. The E-Class and C-Class models fair a lot better.
But it looks like the 2016 E-Class model floats a superior depreciating level, and outperforms the C-Class.
Figure 4 A comparison of a sample of models (by UsedFirst)
Let’s try and put these depreciation figures in perspective by looking at the sales figures for these models in the last two years.
If the car gluts the market it will experience unfavorable depreciation, however, if it experiences favorable and steady growth, with reason, then it will work favorably in terms of depreciation because there will remain a healthy demand.
C-Class continues to be highest-volume Mercedes-Benz model
The C-Class models did well in 2018 by scoring the highest volumes of all Mercedes-Benz models. There were 397,000 units of the Saloon and Estate versions produced and sold in 2018. The long-wheelbase version of the C-Class Saloon is built and sold exclusively in China and saw double-digit growth.
It just shows how important it is to respond to local customers’ needs by making a car in China, for China. China, with its fast-growing market, was perfectly ready for the C-Class.
This sort of dynamic has been consistent for the C-Class and is probably part of the reason why the model only experiences a 13% depreciation in the first three years from new.
E-Class continues record-chasing in the second year after launch
More than 355,000 units of the E-Class Saloon and Estate were sold in 2018 achieving a growth of 1.3%. Although Mercedes-Benz is constantly expanding its portfolio, the E-Class sold more in the past twelve months than in any other year.
An important driver of this growth is the continuing popularity of the long-wheelbase version in China (+32.7%).
The E-Class typically has poor depreciation at 55% after three years from new. The growth of 1.3% is a gradual growth of a luxury car that only the wealthy can afford.
It needs to be seen whether the double-digit growth will remain sustainable, or whether that was a single spurt of growth into new territory.
S-Class: Mercedes-Benz flagship shines with double-digit sales growth worldwide
The S-Class has become very popular in the last 18-months after its upgrade; 77,927 units of the S-Class Saloon were sold in 2018 (+12.2%). That includes sales growth of 7% in Europe.
More than two-thirds of the Mercedes-Maybach S-Class Saloon went to customers in China, with more sold than in any previous year (+21.8%).
The S-Class depreciation of 34% was average.
This is a top-end luxury model that will experience an elevation in depreciation levels if sales volumes are not maintained. If a model like the Mercedes-Maybach S-Class Saloon phases out the depreciation deteriorates quickly.
What’s the sales volume impact in other regions?
The biggest markets for Mercedes:
- China: 678K units sold
- United States: 327K units sold
- Germany: 324K units sold
- U.K: 171K units sold
- Italy: 87K units sold
- France: 76K units sold
- Japan: 73K units sold
- South Korea: 68K units sold
- Spain: 57K units sold
- Canada: 45K units sold
The China sales are double those of the United States as the numbers tower over the sales through the rest of the Western countries represented in the Top 10.
Next up is the United States, Germany and then the United Kingdom.
There still seems to be a balanced demand in Western countries to suppress the depreciation of value. Another study might be able to determine the reason for these disparities and the weak correlation in depreciation between models.
4 Basic tips to reduce the impact of depreciation
1) Researching resale values will educate you on the historical resale values of the cars you are interested in buying. It will always benefit to have a basic understanding of the past performance of the value of a car.
2) Consider buying nearly-new while understanding that the depreciation still takes place in a subsequent couple of years. Realistically one can not eliminate losing value. But at least a fairly new, but previously owned, car will have dropped through the initial depreciating hurdles. Then drive the car for three years and get rid of it before the sixth year comes around.
3) Drive it as if you own it by taking care of it for a long-term payoff. Make sure the interior and exterior are always kept clean. This will help avoid scratching the paintwork, and pretty much keeps the polished look which is the first thing people look for when assessing the condition of a car.
Keep to the recommended service intervals and keep a record of these. Make sure brakes and tires are replaced when there is a need to.
4) Keep away from old designs and huge discounts unless you are deliberately buying a collectible classic. Cars nearing their ten-year mark will have been depreciated entirely and will hold very little resale value.
They will probably start costing a lot of money on repairs and maintenance. Big discounts mean no one else wants the car.
Stay away and don’t be caught by something that looks too good to be true. It is too good to be true, with good reason.
About the data
We have had to lean on a lot of research and gleaning from other people’s datasets to establish findings for this article. To establish trends in this paper, depreciation is sampled across the models to determine a variance or correlation within the Mercedes-Benz brand.
Then the data of another sample from UsedFirst was used to establish how the Mercedes-Benz is valued at its best. Within that dataset, we compare the C-, E- and S- Class models with the industry average. This is all done to establish a comparison and plot the car comparatively.
Later in the article, we discussed sales and location and the impact of those determinates on depreciation.
Lastly, we will look at methods to try to avert the cost of depreciation.
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