The 2008 Cadillac STS-V sold new for US$78,775. A high price, but the vehicle was literally one of the zeniths of the Cadillac line, with every possible option in the STS family, as well as a hand-made Supercharged Northstar power train, track-tuned suspension, and Brembo brakes.
Now in 2010, the same vehicle in Good to Excellent condition would receive a trade-in offer from an average Dealer of around $28-29K. That my friends, is depreciation. Heartache.
[Note: values taken from the Kelly Blue Book, via cars.com, April 2010]
Now, if the owner chose to sell the vehicle privately, it would be worth somewhat more. For a private sale in good to excellent condition the owner could expect to garner $31-32K.
On the other side of the table, after purchasing said car the Dealer would prep it then offer it for sale around $36K.
Although a 2008 model seems NEW, remember that this model would have been manufactured in 2007, and is almost a 3 year old vehicle now in 2010, with the 2011 models on their way out soon. Still, even at 3 years that is a sharp, sharp depreciation per year. We all know the joke that a car depreciates as soon as you drive it off the lot. Part of the reason for that is if you pay full retail for a vehicle, you could not possibly resell the same vehicle for full retail — you would only get the reduced, near-wholesale value. So the difference between what you could sell the vehicle for and what you purchased it for is part of the depreciation, and happens as soon as you take possession.
Another cause for depreciation over time is the public perception of a vehicle’s reliability, appearance, and utility. The STS-V did not sell as well as Cadillac had hoped it would. It was always intended to be a limited production vehicle. The looks of the new STS when released in 2005 never popped with the public. It was redone visually in 2008, but by then too little too late. I have always thought that the STS went wrong in the hood/front end treatments, and this is the key part that Cadillac addressed in 2008 as well, restying the grill, but leaving the flat hood lines. The STS-V however gets a domed hood to help fit the Supercharger, which fixes the look of the front nicely. But looks definitely effect depreciation, as beauty is in the eye of the beholder for resale.
In the case of the STS-V Cadillac during these years has had very good reliability. However, the public’s perception of Cadillac reliability still has not caught up with the facts. Buyers are shy to purchase used cars that they perceive as likely to require costly repairs.
Thirsty: The 2008 STS-V is a powerful car. It is also a relatively thirsty vehicle, scoring just 13 mpg city and 19 mpg highway in the current EPA measurement system. It requires premium fuel only. Those are both hard sells in the used vehicle market.
Comparison shopping: Pricing a 3 year old STS-V alongside a new CTS is a very hard sales proposition at the Cadillac Dealer. The average buyer would certainly prefer to have the new CTS.
From my point of view however, here is a jewel-like masterpiece of a Cadillac, largely hand made, with a unique, powerful engine and track tuned suspension. And due to the magic of depreciation, it has almost fallen to a price point where it is attainable. Yes, I feel bad for the Owners who wrote a check for $79K in 2007 and want a new CTS-V but are shocked to find that their prize STS-V is worth less than 1/2 as much now.
But be assured that these wonderful Cadillacs will find good homes. At least if I can find one in my price range that one will.