Theoretically this used BMW 5-Series should be valued at between RM190-210,000. In real world conditions the depreciation on a 5 year old BMW 5-Series assuming no accident damage and in near perfect running condition and with an engine wear of about 20,000 kilometres a year should be near RM30k a year. This means the new car selling price which was about RM360k minus RM150k (over 5 years) leaves it at RM210,000 or so.
So why is the current generation 5-Series on sale for just RM153,000 negotiable? (Which means you could probably press the owner to release it to you for about RM145,000 or so).
Let us assume the service record is fully documented to date and the car is totally accident free with original paint and no electrical or gearbox issues. This car starts sounding like a good used buy. Yes, it sounds good because the 1st owner, has taken more than a 50% loss in value. So why the big loss in value for this BMW 5-Series owner? Well the issue is not with the car itself or the running costs of the car. The issue starts at showroom level when BMW dealers for years have been offering pre-registered cars for sale. Pre-registration in theory means a car that has some mileage on it and it has been used by the dealership for promotional, roadshows, staff company cars and or dealership test drive units.
BMW Malaysia has created a market condition where for the past few years in order to put as many BMW cars on Malaysian roads, they take pre-registration as a loophole to offer good high discounts on new cars. Yes, most or nearly all pre-registered cars from all BMW dealers in the country are new cars that immediately have a good discount posted on them. Using the word ‘discount’ is not favourable as it deems the car to be less popular. However when a potential buyer walks into a BMW showroom to look at a RM360k 5-Series and the sales person wants to close the deal, the buyer is offered a pre-registration car at RM320-330,000 to prevent the buyer from thinking about visiting a Mercedes or Audi showroom next.
The BMW pre-registered car has become a normal sales pitch and today many car buyers know of this and will mostly never buy a BMW at full selling price. This hefty showroom discount reduces the value of the used BMW as buyers know what the market pricing can be and sellers will have to take in slightly more losses as compared to rival brand cars.
So, knowing this, the seller of this BMW 523i has priced his car to match expectations and sellers can look forward to a buying a luxury sedan with great features and drive dynamics at the price of a brand new Japanese sedan. The decision is now yours.