Why are second hand BMW so cheap?

We’ve written extensively about luxurious BMWs on this blog. We’ve mainly focused on their reliability, price, and maintenance costs in the past weeks. Today, we’re going to combine these pieces of research and answer the question of why used BMWs tend to be cheaper than other luxury car brands:

On average, BMWs have a residual value of 24% after ten years which is lower than the 28 – 35% residual value of other luxury car brands. Used BMWs are this cheap because many of them have shorter lifespans and more problems than other car brands, which results in higher annual maintenance costs.

However, that certainly doesn’t answer the question altogether. Below, we’ve gathered data from different sources and created visuals to show you how quickly BMWs depreciate. Not only do we compare BMWs to other brands, but we also compare a bunch of BMW models to each other. Finally, we discuss why BMWs are cheaper than other brands and what BMW you should best get if you’re in the market for one. Read on!

Depreciation Of A BMW Compared To Other Brands

Let’s start by seeing if BMWs do indeed depreciate faster than other car brands. For this (and the different datasets in this blog), we’ve used data from caredge.com. There, we gathered the depreciation data for seven luxury or high-end car brands in the United States.

We took the seven brands mentioned in the image below for a reason. We feel it’s only fair to compare BMW to these brands. All these brands deliver the kind of the same experience (a high-end experience and performance). Comparing a BMW to a Honda or Kia wouldn’t be fair since these brands serve entirely different customers.

What we found in our research is that BMWs do indeed depreciate faster than other luxury car brands. In the first year, BMWs, on average, lose around 23% of their value. More than the 12 – 20% of other car brands lose (although Porsche also loses 23%).

After five years, a BMW generally has lost 45% of its value. Other car brands have lost 39 – 47% of their value, which means BMWs have around the same depreciation after five years compared to their competitors.

However, after five years, BMWs start to depreciate quicker than most other car brands. For example, a BMW has lost 76% of its value after ten years. On the other hand, the other car brands have ‘only’ lost 67 – 72% of their value. Lincoln is the only car brand that performed worse; these cars have lost 79% of their value at this point.

So, as a whole, we would say that BMWs do indeed depreciate quicker in the first year than other luxury car brands. The depreciation is almost the same at the five-year mark among all researched car brands. However, after five years, BMWs do indeed depreciate slightly quicker again, leaving them with less residual value than other luxury car brands at the end of their lifespan.

Also read: This Is Where BMW And MINI Are Made

Depreciation Of BMW Models

However, that doesn’t tell the whole story. Of course, within the BMW group, there are different models. Some of these models depreciate a lot faster than others. Therefore, we took 15 of the most sold BMW models and compared their depreciation over ten years.

In the first year, the 2-series, 4-series, and 7-series depreciate a lot faster than other BMWs. These models lose 25%, 26%, and 27% of their value in the first year. On the other hand, the 3-series, X3, and X7 depreciate a lot less than other BMWs, with a loss of 19%, 19%, and 15% of their value.

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After five years, the 7-series and the Z4 perform the worst. They have lost 52% and 54% of their value, respectively. On the other hand, the M2, X3, and X7 outperform the other BMWs since they have only lost 39%, 39%, and 33% of their value.

After ten years, the 7-series, M5, and X5 are the worst performers. They have lost 83%, 83%, and 81% of their value. On the other hand, the 2-series, M2, and Z4 are the best performers and have ‘only’ lost 68%, 60%, and 69% of their value.

Why Do BMW Depreciate So Quickly?

Now that we’ve established that BMWs do indeed depreciate faster than other car brands (and we know which models specifically have a hard time), it’s time to show why BMWs depreciate faster. Luckily, we’ve already done a bunch of research on BMWs. Therefore, we believe there are three main reasons why BMW tend to lose their value faster than other cars in the United States.

Some BMW Don’t Last That Long

In this blog, we’ve already written extensively about the lifespan of 17 BMWs and how many miles you can expect to put on the odometer before they give out.

We learned that, on average, BMWs tend to last between 180,000 – 210,000 miles. In general, that certainly isn’t an alarming number. However, some cars perform much better, and others perform much worse.

For example, the X4, X2, 2-Series, and 4-Series are the least reliable BMWs with a maximum of 80,000 – 140,000 miles. Then there are the 1-series, X1, 6-series, Z4, X6, and 4-series that all reach a mileage of 140,000 – 180,000, which also isn’t that great.

The only BMWs that did well in this test were the Z3, 3-Series, 5-Series, X5, X3, and 7-Series, which lasted between 180,000 – 260,000 miles (especially the 3-, and 5-series tend to cross the 250,000 miles mark).

Did you know that the BMW 5-series is our top pick for car owners that want a BMW? Check out the article here: Which BMW Series Is Best (And Should You Get It?)

Some Are Very Unreliable

Besides mileage, we also had a thorough look at other reliability factors of BMWs in this blog post.

We learned that BMWs have the lowest reliability rating (2.5 / 5) compared to 26 other car brands in the United States. Furthermore, BMWs have to go to the garage for unexpected maintenance around one time per year, and when doing so, there’s a 15% chance of your car having a severe problem. All these numbers are much higher than average.

Most Of Them Cost Very Much In Maintenance

Finally, we learned in this blog post that BMWs are much, much more expensive to maintain than other car brands. BMW performed the worst out of all the car brands sold in the United States. On average, you have to spend $968 per year on a BMW to keep it on the road. That’s much higher than the $646 average. It even performs worse than Mercedes-Benz and Lincoln.

Not only that, but we also saw that the Z3 and 3-series have the lowest annual maintenance cost, whereas the X6 and the 4-series perform horrendously. Again, check out the articles we’ve mentioned if you want to know more about this.

Should You Get A Used BMW?

By default, there’s nothing wrong with wanting a BMW. However, as you know by now, you have to make a sensible decision when deciding what BMW you want to buy specifically. Yes, BMW can offer good value for their money. But picking the models with the shortest lifespan or the highest maintenance costs can prove to be a financially questionable decision.

If you’re want to buy a used BMW, we highly advise you to go with a second-hand 3-series or 5-series. There are several reasons for this. First of all, 3-series and 5-series have proven to have a much longer lifespan than other BMWs. These cars have been shown to reach 250,000 miles repeatedly, which means you can enjoy them for longer (and get more value for the money).

Furthermore, 3-series and 5-series hold the top two and three spot on the list of BMW with the lowest maintenance costs. Per year, you can expect to pay $773 for a 3-series and $825 for a 5-series. This is much lower than, for example, a 4-series which costs $1,229 per year in maintenance.

Finally, the low maintenance cost and the longer lifespan indicate that these series have fewer problems than other BMWs, which means you’ll spend less unexpected time at a garage. In other words, they’re less of a pain than other BMWs.

Sources

• https://caredge.com/depreciation

Stefan K.

Hi! My name is Stefan; I’m the owner and lead writer at TheDriverAdviser.com.

I’m an active writer on this blog myself, as well as a novice car mechanic. For the really technical stuff, I find writers with experience as a mechanic or who have studied mechanical engineering.

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