It always make sense to buy and keep cars for a while rather then trade them in after a couple of years or worse yet, lease.
My '03 325CiC was $52K sticker (Sport Package, Premium Package and Cold Weather Package). After a year (2004) and 12,000 miles it was sold as CPO for $40K. I bought it last year (10/2008) with 56,000 miles for $17K and remaining of its CPO warranty.
So, the first year this car was resold $12,000 cheaper then its retail, which means it was purchased from its original owner for about $20K less then he originally paid for it.
First year depriciation: $20K
Next 4 years: $23K or $5,750/year.
Current KBB value (11 months and 14,000 miles later): $15,675 (Good Condition FS BO) or $1325 in 11 months.
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