Sighting the sweet spot in used car pricing

Generally, cars depreciate.  Once you drive your new car off the new car lot, it becomes less desirable for me to buy from you versus buying the same car from the Dealer.    Another way to think of it is that your car’s resale value goes from the retail price you paid for it to the wholesale price you could resell it for.

After a few years, a car’s depreciation starts to level out.  My current 2005 Cadillac is depreciating at around $1.5K per year.  At some point depreciation basically stops, and occasionally a vehicle starts to appreciate in value.  For the most part however in most cases cars lose a lot of value in the first year or two, then lesser amounts until you are ready to sell/trade/move on to your next vehicle.

I’m setting my sights on grabbing up a 2008 Cadillac STS-V, or a 2010 Cadillac CTS Premium Model.  Honorable mention to a 2009 Cadillac CTS Premium Collection, but there is a minor detail that drives me to prefer the 2010 because of the way that the keyless ignition is implemented (button vs switch).

Edmund’s offers a true cost to own analysis.  What they suggest is that a 2010 Cadillac Premium has an initial cost (with no other options) of $46K.  In the first year of ownership it will depreciate around $10K.  Now, no one is going to post their 1 year old car for sale at a $10K decrease, but that would be our target for grabbing up a 1 year old 2010 CTS Premium.

2010 Cadillac CTS Year 1 Year 2 Year 3 Year 4 Year 5 5-yr Total
Depreciation $10,425 $4,887 $4,301 $3,814 $3,423 $26,850

and, to get to closer to $30K as a target, we would need to wait and get a 2-year old 2010 CTS Premium in 2011.

Now, considering the 2008 Cadillac STS-V is a little more tricky, as it can only be evaluated by Edmunds as a used car, so we only see the further down the slope values.  Edmunds estimates that the STS-V is currently worth around $40K.  It originally sold for $78K+. Some examples are creeping into the low 30s but some are in the 50s still, so keep in mind that their estimate is an average. I changed the year #s to tie out with the way that they are evaluating:

2008 Cadillac STS-V Year 3 Year 4 Year 5 Year 6 Year 7 Total
Depreciation $4,826 $4,232 $3,723 $3,302 $2,962 $19,045

So the 2008 STS-V is depreciating at around $4-5K per year.  So if there are 2008 STS-V’s available now for $35K then next year they might be in the $30K range.

Conclusion:  In another 6-12 months one could expect to grab up a 2009 CTS Premium Collection or 2008 STS-V in the high 20s / low 30s if you hunt for the lower edge of the market / find a bargain.  Wait a year and the 2010 Cadillac CTS Premium Model might slide into the right range.

Hidden jewel: the 2007 Cadillac CTS-V 6L V8

The first Generation Cadillac CTS-V was produced from 2004 through 2007.    The re-designed 2nd Generation CTS Sedan was released in 2008, but the V-Series model took a hiatus until 2009 (so there was not a CTS-V in 2008).  The 2nd Generation 2009 CTS-V is a super car and is a well priced starting in the low US$60s.   But for those looking for a bargain in a luxury performance sedan, the 2007 Cadillac CTS-V may be just the ticket.

2007 Cadillac CTS-V

The 2007 CTS-V features a 6L, 400 Hp LS2 V8.  A similar engine was used in the 2007 Chevrolet Corvette, giving rise once again to the image of the Cadillac CTS-V as a 4-door Corvette.

Advantages:

  • Great Acceleration, High top speed (163 mph)
  • 4-door 5-passenger “Clark Kent” daily driver with Supercar performance.
  • Fully featured: Cadillac style; full leather luxury interior; Navigation; Sunroof
  • Flat, high speed cornering and terrific Brakes
  • Reasonable fuel economy (for a performance car) 15 mpg City / 23 mpg Highway

Disadvantages:

  • The Cadillac CTS-V ONLY came with a manual transmission in the 1st Generation.  No Automatics available.
  • The rear differential in the CTS-V has a bad reputation for being fragile.  This was addressed by the factory in 2006 with varying reports of success.  Basically the issue is that due to the luxury isolation customizations in the drivetrain to make this car a great Cadillac, some potential for wind-up and resulting wheel-hop was introduced.  This was addressed by the factory with varying diameter axles left and right in the 2nd Generation CTS-V in 2009.  There are now aftermarket axles available from several manufacturers for the 1st generation CTS-V as well.  So if you intend to drive the CTS-V like a drag racer, there are parts available that let you do that.  If you intend to drive the car like a performance luxury sedan, none of this ‘issue’ is of concern to you.
  • It is not the 2nd Generation CTS-V (but those currently cost twice as much).  One big advantage of the new model is the factory Supercharged LSA 6.2L engine making 556 hp.  Superchargers are available in the aftermarket for the 1st Generation cars which add approximately 140 hp at the wheels.

LS2 6.0L V8 2007 (LS2) for Cadillac CTS-V

Certified engine dyno:

2007 Cadillac CTS-V LS2 Engine Dyno

Stopping

The 2007 Cadillac CTS-V is not only about the engine.  It also has a performance brake package, with Brembo 4-piston caliper disc brakes front and rear.

Turning

The 2007 CTS-V suspension is turned up to “4” on a scale of 1 to 3 for the normal CTS sedan.  The FE4 suspension is custom tuned for high performance cornering and for the dynamics of a V8 Performance Sedan.  A ‘track kit’ FG2 shock package is available as a Dealer installed option if you want even more hard-core cornering.

Kelly Blue Book Value:

The kbb.com Kelly Blue Book is a good indicator of what price you might expect to pay for a 2007 CTS-V in excellent shape at a Cadillac Dealer.  For my zip code, kbb.com suggests that a 2007 Cadillac CTS-V in Excellent condition with around 30K miles would run $33K.  Buying directly from a private party can yield a lower price and an even greater bargain.  The original base price for the 2007 CTS-V was US$52K.

Cadillac Certified Pre-Owned:

Cadillac’s Certified Pre-Owned program allows Cadillac Dealers to issue extended warranties on excellent used examples offered for resale.   The CPO program is one reason to shop at a Cadillac Dealer for a nice used CTS-V.

PRESS RELEASE INFO on the 2007 CTS-V:

CTS-V: The charter member of the V-Series vehicles, the CTS-V is an emphatic statement of Cadillac’s entry into top-level competition with the world’s finest luxury sports cars.

The four-door, rear-wheel drive CTS-V uses the overhead valve 6.0L V-8 LS2 engine with 400 horsepower (298 kW) and 395 lb.-ft. (536 Nm) of torque. It achieves 0-60 mph in less than 5 seconds with a top speed of 163 mph (262 km), and the quarter mile in 13.1 seconds at 109 mph.

Engine highlights include an aluminum block, two-valve cylinder heads with revisions to the air induction system, and an enlarged dual exhaust system for an impressive V-8 sound. The LS2 V-8 provides CTS-V with racetrack-proven performance, along with smooth, quiet operation and outstanding reliability, durability and quality. The engine’s lightweight aluminum construction – including its cylinder heads and block – delivers an excellent power-to-weight ratio (1:9.6) and good chassis balance (53 percent front / 47 percent rear).

Power is delivered through the six-speed manual Tremec T56 transmission that features a dual mass flywheel for reduced noise and vibration harshness. A heavy-duty, increased diameter, 70-mm prop shaft is used for the higher torque requirements. The limited-slip rear axle is fitted with a 3.73:1 final drive ratio to optimize acceleration.

To help develop and manage its higher horsepower and torque output, and to reduce noise, vibration and harshness, the CTS-V features several modifications, including:

  • High-profile camshaft opens the valves faster and higher, enabling more airflow in and out of the combustion chambers and contributing to horsepower gains
  • High-strength pistons help improve engine durability, particularly under high-performance operating conditions
  • Revised valves and stiffer valve springs better accommodate valve operation with the high-lift cam
  • Enhanced induction system enables enhanced engine breathing, helping to increase horsepower output
  • High-flow intake manifold delivers high amounts of airflow to the intake ports, helping to ensure a broad torque curve while delivering maximum power
  • High-flow fuel injectors deliver fuel at the faster rate needed due to increased intake airflow
  • Dual exhaust constructed of 2.5-inch (159-mm) diameter stainless steel pipe to help minimize back pressure, increase horsepower and ensure proper exhaust tone. Polished stainless steel tips cap the exhaust pipes
  • Engine cover helps reduce underhood noise and features the Cadillac wreath and crest in its center and V-Series identification over each cylinder bank

CTS-V chassis refinements include revised front engine cradle to handle the high horsepower and torque from the V-8 engine. The front stabilizer bar was increased from a 23-mm hollow bar to 26.6-mm hollow bar. Spring rates also were increased from 55 to 70 – a 27-percent increase.

Shock diameter was increased from 36 to 46 mm and valving refined to suit the vehicle’s high-performance driving characteristics. For weekend racers and performance enthusiasts, a “Nürburgring” shock package featuring firmer dampers is available through General Motors Service Parts Organization.

A new steering gear also is included for more precise steering tuning.

A Brembo brake system with 355 x 32 mm front and 365mm x 28 mm rear rotors is incorporated in the CTS-V. The vented rotors are complemented by four-piston front and rear calipers, and linings are tuned for reduced noise and outstanding braking performance.

Tires are Goodyear 245/45WR18 EMT (run flats) mounted on 18 x 8.5-inch aluminum alloy, six-lug rims.

Underneath, a belly pan is positioned under the most forward portion of the vehicle to reduce aero drag and lift at high speeds.

Exterior enhancements on the CTS-V are designed to increase performance, including a unique front fascia with an integrated aero splitter for better aerodynamics and brake ducts vented to cool front brakes. Stainless steel mesh grilles, both below and above the bumper, offer a unique front appearance and allow for free air flow into the engine compartment. Sides include a unique aero rocker design that flows into a specific rear fascia.

CTS-V offers a unique instrument cluster trimmed with satin chrome rings around each gauge. Aircraft-style, white lettering on a black field is used on gauges for better legibility. Other interior design features include a three-spoke steering wheel with an aluminum bezel and specific controls for CTS-V. Satin chrome finishes also are used on the shift knob, door pulls and door handles. The center armrest has been lowered significantly for easier shifting during driving.

CTS-V is produced at GM’s Lansing Grand River assembly center, the award-winning manufacturing site for the CTS, SRX luxury utility and STS luxury sedan.

SPECIFICATIONS: CTS-V

Overview

Model: CTS-V
Body style / driveline: rear-wheel drive, high-performance luxury sedan
Construction: unitized welded steel body with direct-mounted front cradle and rubber-isolated, multi-link independent rear suspension assembly
EPA vehicle class: midsize car
Manufacturing location: Lansing Grand River Assembly, Lansing, Mich.
Key competitors: BMW M3, Mercedes-Benz C55 AMG, Audi A4

Engine

Type: 6.0L V-8 (LS2)
Displacement (cu in / cc): 364 / 5970
Bore & stroke (in / mm): 4.0 x 3.62 / 101.6 x 92
Block material: cast aluminum
Cylinder head material: cast aluminum
Valvetrain: OHV, 2 valves per cylinder
Ignition system: coil-on-plug with extended-life iridium spark plugs
Fuel delivery: sequential fuel injection
Compression ratio: 10.9:1
Horsepower (hp / kW @ rpm): 400 / 298 @ 6000
Torque (lb-ft / Nm @ rpm): 395 / 536 @  4400
Recommended fuel: premium unleaded recommended but not required
Redline speed  (rpm): 6600
Emissions controls: evaporative system, close-coupled catalytic converters, positive crankcase ventilation,  electronic throttle control feedback air-fuel-ratio control
Estimated fuel economy
(mpg city / hwy / combined):
15 / 23 / 18

Transmissions

Type: Tremec T56 6-speed manual with skip shift and reverse lockout
Gear ratios (:1):
First: 2.97
Second: 2.07
Third: 1.43
Fourth: 1.00
Fifth: 0.84
Sixth: 0.57
Reverse: 2.90
Final drive ratio: 3.73

Chassis/Suspension

Front: independent, short/long arm, with elastomeric ride bushings, coil-over springs, 26.6 mm stabilizer bar
Rear: independent, multi-link, coil springs, Nivomat load-leveling shock absorbers, 21 mm stabilizer bar
Traction control system: full-range
Steering type: performance-tuned, speed-sensitive, power-assisted rack and pinion
Turning circle, curb-to-curb
(ft / m):
36.1 / 11

Brakes

Type: Brembo 4-wheel vented disc ABS, 4-piston front and rear calipers and performance brake linings
Rotor diameter  (in / mm): front: 0.55 x 1397 / 14 x 355
rear: 0.57 x 14.37 / 14.4 x 365

Wheels/Tires

Wheel size and type: 18-inch x 18.5-inch aluminum alloy
Tires: Goodyear Eagle F1 W-Rated P245/45R18 (run flat)

Dimensions

Exterior

Wheelbase (in / mm): 113.4 / 2880
Overall length (in / mm): 191.5 / 4864
Overall width (in / mm): 70.6 / 1793
Overall height (in / mm): 57.3 / 1455
Track (in / mm): front: 61.1 / 1552; rear: 61.4 / 1559
Curb weight (lb / kg): 3850 /  1746
Weight distribution
(% front / rear):
54 / 46
Interior
Headroom (in / mm): front: 39 / 990.6
rear: 36.9 / 937.3
Legroom (in / mm): front: 42.4 / 1076
rear: 37 / 940
Shoulder room (in / mm): front: 56.6 / 1437
rear: 56.2 / 1427
Hip room (in / mm): front:  53.4 / 1356
rear:  53.8 / 1366

Capacities

EPA passenger volume
(cu ft / L):
111.3 / 3151
Cargo volume (cu ft / L): 12.5 / 354
Fuel tank (gal / L): 17.5 / 66.2