IMHO:
From my readings about the MINI, the biggest problem BMW has with the car is its relatively high cost of production. The MINI has exceeded all sales predictions but the profit margin on each car isn’t where they should be. For the consumer this is great. We get a great car for not allot of money. You can bet your hard earned cash that the next generation MINI will be cheaper to produce. Ask yourself why did they give the development of the car to an Italian company (name escapes me, maybe Ghia) that specializes in small cars. The reason is probably because they will be able to deliver a car that is far simpler to produce (think FIAT). BMW is great at making premium cars that can demand a premium price. Now, this doesn't mean that the car won't perform as well or have inferior quality. It might take away some of the character of the car and/or the quality of the components. Also, the engine will be shared with hundreds of thousands Peugeots and Citroen cars. This will also take away from the cars individuality. The current engine, though developed by Chrysler, didn't find its way into any other car in significant numbers (some PT Cruisers for European market).

This is only an educated guess and I could be completely wrong.

 

If resale value is a big concern to you, you probably ought to just invest in some real estate and forget the Mini. It's about the driving, by the way. The journey, as the master might say to the grasshopper.

 

MINI has done a tremendous job marketing, selling and reselling these vehicles in a way that has managed to keep resale prices very high.

The notion of reserving a build slot, and waiting for a vehicle specifically tailored to the individual creates much of this, I think. Unlike a number of different foriegn and domestic manufacturers, you can't just go to some lot and pick between 30 different brand new MINI's with 10 different interior packages represented.

The dealers I've seen are lucky to have one or two current model year cars (one of which reserved as a demo). Used MINIs on MINI lots seem to be priced close to 90-95% of what the retail was when new. A private seller may be letting theirs go for a little less... but not the usual 50% depreciation that you see in most cars after 4-5 years just does not exist with the MINI.

I can't help but think that the 1st Gen. new MINIs will retain their die hard following and continue to maintain a premium price in the used market.

 

Well, speaking from personal experience, I initially began looking for a used MINI, but since the resale values were so high, it was better to get a new one. So, high resale isn't necessarily good to for the educated buyer. However, the everyday buyer who maybe didn't research as much may get a used one and not realise they could have gotten a new one for only a couple of thousand more... It really depends. I know I saw an '03 that was going for the same price as the one I configured new! Given it did have a couple more options than mine, those options definately did not add up to the difference in price!

High resale value is nice, but I tend to hang onto my cars for at least 8 years or so, so it's not really an issue for me. I definately plan on keeping my new '06 for a long time. Even with the high BMW parts cost after warranty, etc., it is still cheaper than owning a new car with another payment.

 

I think the high-resale bubble has already burst in some areas of the country, and will spread as the '07 deliveries come on-line. I know of several people who were looking at trading their MINIs for a late '06 in the mid-west, north, and south who were offered VERY low trade-in prices by dealers - thousands of $$$ below the Kelly Blue Book dealer trade-in listing. eg. a late '04 fully equipped - bought new for $24K, showroom condition, 25K miles, last month the dealer valued it for trade-in at $12K, $5K UNDER KBBs suggested dealer trade-in value.

 

Well, you must either be very wealthy..... or you are just happy to be numb and dumb.

The fact is that some people are buying cars that cost as much as salary, and most everyone are buying cars they cant afford on 5 or 6 year loans, rolling negetive equity from the last two stupid car decisions.....all because we just have to have the latest and the greatest, or desperatelty trying to impress people at stoplights..... It is reasonable to bail out of a sinking ship BEFORE it sinks. It is a reasonable question to ask, and one everyone should consider before and after a purchase because a car depreciates to nothing

Can anyone actually cite an example of a car whose previous generation held its value when the next gen is released im not talking first week....but 6-12 months after? I can't think of a single one. the old generation is old news and they will always take a hit once the new designs hit the lots

 

But you cannot depend on it lasting from order to trade-in time, so why pay attention to it at all?

The resale value I mean.

 

Isn't that just the nature of trading in a car in to a dealer? If it's an issue, sell to (or buy from) a private party to get closer to blue book on the outgoing car... or a better deal on your "new" car (since you know the current owner probably got low-balled at the dealer).

I would guess that same dealer will take that car they bought for $12-16K, detail it a bit, then put it back out on the lot for $22,500. ESPECIALLY if it's a MINI dealership. MINI is then able to keep REETAIL resale values high and promote customers (who do the math) to spec out and buy the new model MINI. Brilliant business, really.

 

I could perhaps see the 02s and 03s dropping a bit more, but as long as the cars retain high demand and limited supply, both on the new and used market (the dealer markups in some markets are actually still helping hold the cars' overall value, as well as the extremely low percentages of used MINIs on the market) I seriously doubt there will be any huge drop in resale value for the first generation cars, especially if owners keep them stock and drive under 12K/year.

 

You should pay attention to it because it is a signifigant portion of most peoples incomes being sunk into something going down in value. To just ignore resale values, as I said, is a luxury of those who can stand to lose 20 thousand dollars or a numb and dumb philosophy of just not wanting to think about reality.

I love my car, I bought it with the full intent of never selling it, and I still feel that way. But I still see the purpose of considering resale values because it seems about 90% of people change cars more often than they buy a new pair of underware...It is a valid concideration and I DO think the MKI's will drop several thousand dollars in price as soon as the MKII's hit the lots

I would still like someone to cite a model of when this DID NOT happen

 

All well and good, but that "limited supply" may be going away as well. Combine the MINI owners now rushing to order the last of the '06s, with the MINI owners who go for the new gen as soon as it is available, and the supply of used MINIs may jump way beyond demand. MINIs whole new ad campaign is aimed at existing MINI owners, to jump-start new gen sales. At my local dealer, demand for used MINIs is already almost non-existent. They have at least a half dozen used MINIs on the lot that have been there a month or more with no takers, in a region with a population of close to six million, serviced by only two MINI dealers.

 

You're wrong on all counts about me,(on both sides of the .... in the first line, but thanks for the laughs. LOL

"most everyone" isn't me. I just SAVE and pay cash ( for everything but my real estate) and enjoy what I drive because I like to drive and experience certain cars. Never had a payment book in my life. Drive what you like and enjoy life. I'll be driving a free and clear 07 MCS in a few months, for pure driving enjoyment. Everything depreciates except land, because they're not making any more of it. Performance cars are fluff, icing on the cake. Like I said, do it whatever way works for you, and have fun!

 

Congratulations to you...but why did you reply to this thread then? I actually do have enough money to buy my car flat-out, but I choose to finance, because my money will do more in a mutual fund than it will in a depreciating asset that sits in my driveway. I don't see why you're so snarky about people trying to manage their money responsibly, just because it differs from the way you choose to. Over half this country is in debt. You should be applauding people who are concerned about their economic security...it actually has an affect on the value of your precious real estate.

We all love our Minis...that's why we're on this board, but saying that people shouldn't care about resale value -- or calling 20k+ "fluff" -- is ridiculous. If you have that kind of money to throw around, great. But I think it unwise to buy a car outright.

And I must correct you; real estate does depreciate during certain periods. While it is the safest long-term investment, it got pretty rough for people about two decades ago when values dropped. And it will likely get rough for some people again soon. New home sales are down, and people that got in on overvalued houses with an ARM are going to feel the pinch, and some will lose their asses.

But I digress...the main point here is that how you purchase your car and how much you enjoy driving are two completely different things -- contrary to your original post. That, grasshoppa', is your lesson for today.

 

"We make our own choices and pay our own dues."
Kris Kristofferson

I never said people shouldn't manage their money responsibly. GEEZ! Don't talk to me about the dummies who are in debt. I've never lived like that. MY CHOICE! Like I said before, you drive what you like and have fun. But do remember, there's no luggage rack on a hearse. BYE!

 

I think this is true, but it is only one of the issues addressed in the new MINI. There were others...the pedestrian safety thing, the need for re-sourcing the engine, suspension tuning for run-flats, better low-end torque. I'm not saying that high cost wasn't the genesis of the whole thing, but the picture's gotten a bit more complicated. Someone here said it well...that R56 is a whole re-designed MINI for which tremendous restraint was used to keep the visual package as unchanged as possible.

That said, I think enthusiasts will continue to seek out R50/53 for a long time...and the model will be venerated for an even longer time than that. The general public may not know enough to care. If they're buying they'll want that warranty and I can't blame them for that.

 

if you are worried about resale... lease your next car.


Putting flame suit on...

 

Or, if you are worried about the first year (or for that matter, second and third year) teething problems... lease your next car....

 

Here's my opinion. Buy the car you like and forget about resale value. Its not worth worrying about. If your so worried about it then maybe you can't afford the car in the first place.

 

I personally roll this way...but then I am not financially astute and have no plans to be.

 

For what it's worth. I just ordered my 06 MCS. Was thinking of getting a mini for a couple of years. The imminent release of R56 pushed me to act.

I noted that resale prices seem to be quite high for existing Mini's even though a customer could always just walk up to a dealer and buy a brand new one for a few thousand $ more ( and get maintenance, warranty etc. ).

Well, that option is GOING AWAY. You can't just go buy an '06 ( R53 ) anymore. That should add the wrinkle of - a limited supply. I can't help but thinking there will be enough Mini lovers to keep the R53 high in value for awhile, especially one of the last cars to come off the line. I'm not "Rich", so Resale is a consideration in such a large expense.

The existing car is a known entity, and it seems like there are 100's of thousands of people that love it just like it is.

The R56 is bird in the bush. So this at least gives ME the option of having a choice. I can keep this car for a few years. If it depreciates rapidly - I'll just keep it and enjoy it!

If the R56 is a total winner, and upon seeing them I like the way they look etc. - and when ( the certainly potential bugs) are worked out of the R56 - I can always move up.

If I didn't buy now, but waited a year or so, I might prefer the R53 I'd be forced to shop the used market!

So, I hope to enjoy the car for what it is, and I don't *think* it will plummet just because '07's are different and available. There will be a finite supply of R53's!

Viva la difference!

 

I think your WAY off base

The concept of ordering a car the way you want it has ALWAYS existed. I've ordered MANY cars from the factory just the way I wanted them.

The dealers around us have many cars on the lot and have since I first bought in March, 2005. At least 50 to choose from. The fact is that the factory is behind in production ... each market is different. This isnt magic or voodoo ... basic supply and demand.

As I just sold my car, I would bet first gen models will take a MAJOR dive in prices for 05/06 come January when the first 07s are on the road.

02 - 04 models not so much because they have already depreciated some but the late models cars will be hurting.

In general .... for the masses (not the enthusiasts). they ALWAYS wanted the newest and latest and its is the MASSES that drive the wholesale auction prices ... not the enthusiasts.

Your also, IMO, off base on the response to MKH

In general, car dealers do NOT keep used cars on their lots. They auction them off whosale. The trade-in value has NOTHING to do with KBB, NADA or any blue or black book. Rather, its what a similar car is selling for the last few days at auction. If you trade in for $12K, maybe they can auction it off at $13K. Trade-ins are an annoyance to both buyer and dealers.

IF, and your car better be immaculate, the car is kept for resale on a lot, then most likely for $12k your talking a fair profit of maybe $14 - 15K for the dealer. I think your numbers are just way off base.

 

IMHO the first gen MINI will always be cooler than the second gen, because the first has several classic British cues executed with great finesse that the second is a bit weaker on... from the new padded dash to the new bumpers and lights, I just don't like it, and I don't want one (which is downright amazing seeing as I've gotten a new one every year except for '02).

That's not speaking to dealer lot dynamics, but to the cars out there individually. That said, mine is a high end S convertible, so it's desirability is relatively safe. Thing is, I can't replace it with a better MINI, at least in my mind, so I'll keep it and likely sell my other car and get whatever I want next (currently either a TT or a Z4 Coupe)

 

[quote=BartMack;1149006
mine is a high end S convertible, so it's desirability is relatively safe. [/quote]
Why is that? It would seem to me that convertables are very subject to the market. Easy to sell in Southern CA, hard to sell in the snowbelt?

Also very seasonal dependent. Convertables very hard to sell in the winter ... easy to sell in May.

Not true?

 

...that the depreciation rate of the 1st gen BMW MINIs will be unaffected.

However, you can spin a perceived increase or decrease either way.

If the 2nd gen increases new-vehicle sales, popularity overall will be increasing, and desirability across the board will increase.

If 2nd gen new-vehicle sales lag, popularity overall will be decreasing, and desirability across the board will decrease.

Depreciation will bottom out somewhere, and then the market of the collectors/restorers will pick up from there, but IMO the resale values of 1st gen cars will rise and fall with the popularity of the brand, not due to some special magical quality that the 1st gen possesses. Not until the brand is far enough out to carry with it nostalgia, and we're a good 10 years from that.

-W-

 

Maybe a difficult sell in Minnesota and Wyoming but from Virginia south you can usually put the top down on xmas day (providing it doesn't rain)

Those who want minivans and Ford 500s have their own market made for them anyway