Why does Mercedes Depreciate so fast?

This article will answer the following questions: why do Mercedes depreciate so fast? Is there a buyback program in Mercedes Benz? Which Mercedes Benz Models do not depreciate quickly? Should you select the buyback option offered by Mercedes Benz? Should you buy an Old generation Mercedes Benz?

Why does Mercedes Depreciate so fast?

Mercedes Benz models depreciate so fast because of the following reasons:

  • Long Product life cycle
  • Fleet vehicles
  • Retention of vehicles by the  customers

The factors responsible for the fast depreciation of Mercedes Benz models are discussed below:

  • Product life cycle

Mercedes Benz follows a 7-year product life cycle, 7 years is a considerable amount of time before a newer version is introduced in the market. The luxury car segment is very competitive and technology is evolving at a rapid pace. Therefore, to stay updated and remain ahead of the competition Mercedes Benz also introduces a facelift model halfway through the life cycle of the model. The facelift models have updated exterior styling and more advanced interior features. This results in faster depreciation of the older model as it significantly begins in terms of features and styling.

  • Fleet vehicles

A significant portion of Mercedes Benz is regularly used as a fleet vehicle. Fleet vehicles are owned by renowned establishments and businesses to chauffeur around high-ranking officials and businessmen. The fleet vehicles are regularly maintained and Mercedes Benz dealerships also offer quick turnaround times for fleet vehicle customers. Therefore these vehicles have a very high mileage even if the age of the vehicle is not too old. The resale value of Mercedes Benz models with high mileage is very low as there can be unexpected repairs in the vehicle and Mercedes Benz has very expensive spare parts and labour rates. 

  • Retention of vehicles by the  customers

Mercedes Benz offers star ease service packages that can cover the cost of a vehicle for up to 10 years, there are extended warranties available for 6 years from the date of purchase and both the stare ease and extended warranty can be purchased anytime after taking delivery of the vehicle. The entire experience of ownership of a Mercedes Benz car is very easy and customers are also satisfied with the comfort and performance offered by the Mercedes Benz models.

Therefore the models available on the used car markets are usually old generation models with very high mileage. The certified pre-owned Mercedes Benz program is the only way to buy a used Mercedes Benz car with a 1-year standard warranty and low mileage.

Is there a buyback programme in Mercedes Benz?

A buyback programme is usually designed to keep the customer within the brand and encourage the customer to upgrade to a newer model/ higher model. Mercedes Benz also offers buyback with the star agility plus program. Customers get an option to retain the ownership of the vehicle at the end of the financial contract or the dealership can buy the vehicle and offer a discount on the price of a newer model.  

The standard tenure of the buyback is 3 to 5 years regardless of mileage. A quick technical appraisal is performed on the vehicle and if the vehicle is in good condition dealerships can offer up to 50 per cent buyback value for the car. 

Mercedes Benz also uses various tactics like giving a newer or higher car to a customer whose car is in the dealership for service or repairs. Some dealerships even offer to buy the car if the customers are not satisfied with the vehicle.

Which Mercedes Benz models do not depreciate quickly?

Mercedes Benz has sister companies like Mercedes AMG, Mercedes – Maybach and Mercedes Benz EQ. all the sister companies make a special version of regular Mercedes Benz models. The Mercedes AMG is known for making high-performance versions of regular models while the Mercedes Maybach is known for longer wheelbase models more focused on comfort and performance. The EQ brand is a recent addition and it mainly manufactures full-electric Mercedes Benz cars.

The AMG and the Maybach models can retain their value for a longer duration compared to standard models. Most of the Maybach models even offer premium sound systems and special colour interiors which help in getting high resale value in the used car market.

The Mercedes Benz AMG models are very rare, especially in the international markets like India, China, America etc. certain models were also produced in limited numbers and the cost for special edition models has gone up instead of depreciating. Even the regular AMG models like the 43, 45 and 63 series retain their value better than their standard counterparts. The mileage on these models is also less as most of the vehicles are driven around cities for shorter communities and occasional track days. 

Should you select the buyback option offered by Mercedes Benz?

Mercedes Benz makes some of the most expensive cars in the world so, to make the purchase more accessible, Mercedes Benz offers various finance options so that more customers can enjoy the joy of owning a Mercedes Benz car.

Star agility plus is one of the financial options and its availability is based on the location of the market. Star agility plus not only offers flexible monthly instalments and balloon payments but customers can choose to either keep the vehicle after completing the last instalment or upgrade to a different model.

The buyback option is also available and after a technical evaluation of the vehicle, the dealership can offer the assured buyback value agreed at the start of the contract. The assured buyback value protects the customers against the risk of any depreciation. 

If a customer chooses to upgrade the model then Mercedes Benz offers 3 upgrades over a tenure of 6 years. Therefore, customers who wish to buy the latest models as they are released without worrying about the depreciation should take advantage of the buyback options offered by Mercedes Benz.

Other articles about Mercedes Benz you may be interested in

What are the Million Dollar Cars in Mercedes Benz?

What are the types of compressors used in Mercedes Benz?

What are the modifications for a Mercedes Benz C Class?

Conclusion

The technology in luxury passenger cars is becoming more advanced with the introduction of new models and luxury car manufacturers like Mercedes Benz are at the forefront of innovation in the automotive field. Therefore the older models become outdated more quickly and depreciate faster. The rate of depreciation is predicted to increase as leading manufacturers like Mercedes Benz have planned to discontinue production of internal combustion engines and go all-electric.

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