Cars in Public Housing | Are Luxury Cars Always Expensive?

Brands like Mercedes-Benz and BMW have always been considered luxury vehicles. A brand new Mercedes-Benz or BMW can easily cost hundreds of thousands, even over a million. However, it's not hard to find a used Mercedes-Benz or BMW on used car websites for just tens of thousands of dollars. Why is it that a new car valued at hundreds of thousands of dollars can drop to just tens of thousands on the second-hand market? Here are 5 factors that might directly affect a vehicle’s market value.

A vehicle’s brand is one of the key factors influencing its value. For example, German brands are more popular among Hong Kong car owners than Japanese brands, so new car prices for Mercedes-Benz, BMW, and Audi also tend to be higher. However, Li Yiu Pui, Honorary President of Hong Kong, China Automobile Association, states, "You cannot evaluate a car based solely on its brand; you must also consider factors such as ownership duration and the number of previous owners."

Newer vehicles are generally in a better overall condition, reducing the need for major repairs, which also makes the car more valuable. However, used cars in Hong Kong depreciate relatively fast. For example, a 7-year-old BMW 2 Series tourer may retain only 20% of its original value due to high maintenance costs. By contrast, a 7-seater Japanese vehicle of the same age might retain more of its value because it’s more popular among users and has lower maintenance costs, resulting in less depreciation. Therefore, the effect of the year of production on a vehicle's market value also depends on its brand and type.

Vehicles are consumables; the more miles a vehicle is driven, the greater the wear and tear, increasing the chances of needing repairs and lowering its value. Generally, in Hong Kong, an annual mileage of around 10,000 to 15,000 km is considered normal, and exceeding this range can lower a vehicle's value. So the market value of a vehicle is not something that can be judged solely based on its brand or look.

In Hong Kong, there is a common perception that the fewer previous owners a vehicle has, the higher its value. However, the number of previous owners does not fully reflect the condition of a vehicle. The crucial factor is whether the previous owners have maintained the vehicle properly. If the vehicle lacks regular maintenance, even a car with few previous owners could still develop significant mechanical issues.