gt1209

I've been doing a little depreciation comparison between 04 RX 330 vs. 04 LS 430...

Let me back up a little... So I've done my research and I've decided that my next vehicle would be an LS 430 with $17,000 budget, so a clean 04 with around 100k miles with 1/2 owner(s) should be within my range. Out of curiosity I decided to check out what year of RX 330 (AWD) I can afford with the same budget, and primary results indicates that I'd be looking at an 04 RX with 100k miles as well.

Cut to the chase I've found out that the LS 430 of above year and mileage is worth 37% of its original invoice value, while RX 330 is worth 52%. (see math at the end of the post)

What does this tell me? From value point of view, either buy a new RX (drive for 5 - 7 years then sell)... or a used LS (steal deal)... right?

My math:

Invoice of 04 LS 430 is $47958 (source: MSN Auto)
7 year old with 100k miles value: $17000 (online car research by experience, filtered to show free carfax only)
$17000/$47958 = 37%

Invoice of 04 RX 330 AWD is $32455 (source: MSN Auto)
7 year old with 100k miles value: $17000 (online car research by experience, filtered to show free carfax only)
$17000/$32455 = 52%

Jabberwock

I think your math is correct. I think the depreciation differential is primarily due to difference in demand. There is high demand in the US for SUVs (both new and used) and the RX and Toyota HL are known as ultra high quality SUVs so they have very high resale value as used cars. The current high price of gas is gonna take some of that demand away going forward.


But relative to SUVs, there is less overall demand for a large showboat sedan like an LS in the used market. Only a few crazies (like the folks on this board) are aware of just what an amazing bargain the LS is... especially buying used.

Bocatrip

I was wondering why the calculation for the depreciation used the original invoice price and used retail price rather than the MSRP and used retail values. I have been under the impression that at least the first generation LS430s were being sold for close to MSRP due to high demand. If that was the case depreciation for the LS430 would be even more severe.

CarGuy89

It depends what you intend to use the car for. If you'll be hauling around bigger things or prefer the higher driving height, then the RX is the obvious choice. However, if you're just looking for a DD, the LS430 is MUCH better. I've driven both and while the RX is pretty good for an SUV, the car definitely feels like it was built with a budget (you can slightly feel engine vibration, engine sounds coarse when accelerating, abundance of rattles) while the LS feels like it was made without any compromises (the most solid car I've ever driven, along with the S500). Drive both and you'll know what I mean. I'm not saying the RX is bad, but it definitely is several tiers below the LS in terms of driving experience and build quality.

fergo308

They're very different cars,so it's an odd comparison. the RX is basically a kluger (highlander) with a sleeker body,a nicer interior,and less storage space and towing capacity. The LS is a big,luxo sedan that's designed primarily for cruising comfort.

What about an IS250 or GS? Either of those should easily fit your budget and should be quite common.

Is there any particular reason you've chosen the LS and the RX for comparison?


Justin...

caddyowner

I can see why you are choosing between a LS and RX as they are both great vehicles and both probably meet your needs, though somewhat differently. (If we didn't have the handicap transfer needs of my wife - or if she could still use a small step, the RX would be a great single, year-round vehicle for us.) I think the better choice for RX would be 05-06 as there were some issues with the 04 as it was the first of the new body style. (The 04 LS430, a mid-life refresh, had fewer problems IMO.) 07 and later RXs had the 3.5 engine and are recommended to use premium fuel.

Since you are friendly with numbers, let me suggest plotting the annual depreciation of both vehicles. You should see a curve that starts out fairly steep and then flattens out after a few years. I suspect the financially best year vehicle would be just as that depreciation curve flattens out.

thinkin

Why would you want to live your life by spreadsheet? They're both good cars - buy and drive what you like.

gt1209

Jabberwock - Yes I can see how demand for SUVs would drive the price higher. I always wanted a big sedan growing up... Maybe it's because I was born in Taiwan. I didn't see many SUVs when growing up in the late 80's and early 90's.

Bocatrip - I used the original invoice price because it would make residual value look better. But I do think you're right - using an educated guess number closer to MSRP may reflect reality better.

To the rest - There is a little story behind the scene as to why I compared RX and LS. My wife wants an SUV when she starts working next summer/fall, and right now a brand new Pilot is her number one choice due to reasons that I can respect (but won't agree personally). So because that, I did a comparison between New Pilot/New Highlander/New Traverse/Used RX 330/350 with $28k budget. I then compared RX 330 to my favorite, LS 430, to find out the shocking value difference and mentioned that in my original post.

I'm going to get an LS 430/460 when my time comes.

CarGuy89

+100000

To paraphrase Top Gear: Cars are something you buy with your heart, not your brain.. Do what feels right, although you may want to factor in ownership costs. The LS may be relatively cheap initially, but it's still a $60k car to maintain.

EDIT: You could/should also consider an 01-03 LS430. They are the same car underneath, only real difference other than front + rear is 5 spd auto vs 6 spd (not really a huge deal), and some more gadets on the 04+. Many members who have driven both says they're nearly identical. You should be able to get a pretty clean/low mileage 01-03 for $17k.

MrXerox

Did you say wife? You had better get a 430 now then because when your time comes, you will be the one getting the old car.

airtime

I think while the math is correct, the type of cars and its ways of depreciation differs.

Higher price cars will most likely depreciate more than lower cost cars in general. An extreme comparison would be a $250k+ Bentley that sells for $70k now would get you less than 30% of original, while a Subaru at $17k and now at $10k would be near 60%.

Kind of apples to oranges comparison. Like everyone said above, the LS430 is a bargain right now.

gt1209

That's a really good point. I'll have to keep that in mind!

Thanks for the heads up ... It's too bad that she wouldn't enjoy an LS as much as I would.

That's a good point with good examples. But if you take an 04 LX 470 in the picture:

2004 LX 470

MSRP (MSN Auto)
$64475
Invoice (MSN Auto)
$56091

This is a more expensive vehicle than the LS 430 when new. Should it have a higher depreciation rate?

Per my quick research, the current value for an 04 LX with same criteria as above LS/RX is $29k - $30k. So residual value for the LX is:

High (use invoice $):
$29000/$56091 = 51.7%

Low (use MSRP $):
$29000/$64475 = 44.97%

So the top end Lexus SUV, which is more expensive than the LS 430 when new, still retain its value better than the LS 430.

I think this implies that luxury (Lexus) SUVs just retain their value better than the luxury (Lexus) sedan, which makes used LS a great buy, at least from value point of view. You guys may already know this, but I just found out.

CarGuy89

^Yup! If we look at this from a pure numbers standpoint, there really isn't any reason to buy anything other than the LS430 if you're in the market for a flagship luxo sedan from that era (early-mid 2000s). The LS430 is cheaper than its competitors (save the the VW Phaeton and Jag XJ8, as they seem to cost a similar amount) by at least $5k, usually $10-15k if you shop for the same yr/mileage. The competitors I have in mind are the BMW E65 7 series, Mercedes W220 S-class, Audi A8, Jag XJ8, and VW Phaeton.

Not only will the LS430 be one of the cheapest to buy, it will also have the lowest projected cost of ownership because it earns has the highest overall reliability. There will be far less cost when it comes to maintenance fees AND you'll likely get more mileage out the LS before you trade it in since things should still be working fine. Just one of the reasons why we love the LS so much!

toantran99

I would go with the LS430

GS3Tek

iTrader: (8)

GENERALLY speaking, anything over 30k is bad depreciation.
and if it's german, it's even worse, throw in amg or//M, oh boy