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On the road during lockdown

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Why these vintage and modern Mercs could offer an unusal investment for 'solid returns’

2020-05-15 16:00

Ferdi de Vos

Mercedes-Benz

Mercedes-Benz. Image: Daimler

In this time of uncertainty, traditional investment havens and sanctuaries such as stocks and bonds, property and commodities have proven fragile and unstable, and smart investors are looking at different options to safeguard their hard-earned cash.

Now, conventional wisdom dictates that a vehicle is not a good investment. It depreciates in value quite rapidly, and with associated overheads such as financing, insurance and running costs, it is a costly asset with a low yield.

Yet, given the current volatility and unpredictability of most other investment markets and channels in these uncertain times, the purchase of a vehicle from a trustworthy, dependable brand with a scrupulous history can be a wise decision.

The name 'Mercedes', as used on the passenger cars made by Daimler-MotorenGesellschaft from 1900 onwards, is probably the most famous of automotive brands. The oldest luxury car manufacturer in the world extended its name to Mercedes-Benz in 1926, giving the company worldwide recognition.

Using its name both as the basis and incentive to carry forward a tradition of luxury and advanced technology, the brand has shaped personal mobility for more than 120 years. And, and over the decades, every Mercedes-Benz car range has delivered classic and collectible models, still sought after today.

Mercedes-Benz

2020 Mercedes-Benz A-Class. Image: Daimler

Collectibles and classics

Evidence of this is the performance of Mercedes-Benz in the annual Motor Klassik Awards, with the 300 SL 'Gullwing' of 1954 this year again winning the 'Classic Sports Cars' category. 

The 'Gullwing' was selected as the 'Sports Car of the Century' by an international jury in December 1999 and this year's Motor Klassik Awards underlines the fact that, two decades later, it still holds the top position.

Other examples of iconic Mercedes-Benz models, now worth a small fortune, include the 280SL 'Pagoda' (1967 - 1971), the 300SEL 6.3 (1968 - 1972), the 540K (1936 - 1940), the 600 Pullman Landaulet, the G-Class (1979 - Present) and the 190 E 2.5-16 Evolution II. 

It is not just the value of classic Mercedes models that have increased, as according to a Knight Frank survey the value of all classic cars has appreciated in value by more than 400% over the last decade, outperforming coins at 250% and art at just over 200%.

Mercedes Benz 280SL

1969 Mercedes Benz 280SL. Image: Getty Images

Resale value

However, it is not only specialised or expensive Mercedes-Benz models holding their value; normal run-of-the-mill models also do – as elucidated by recent evaluations of vehicle resale values done in South Africa.

In a report published late last year by the vehicle evaluation group True Price to identify the luxury German car brand with the best resale value, it was found Mercedes-Benz cars retained their value best, followed by Audi and BMW.

The data, based on thousands of vehicles sold on auction around South Africa, focused on vehicles that have done a maximum of 150 000km and were registered between 2016 and 2019. 

The actual price achieved on auction was then calculated as a percentage of the original list price to determine a resale value percentage. Using this data, the group found that Mercedes-Benz, at a percentage of the original list price of 70.10%, is head and shoulders above the competition.

Audi ranked second at 62.49% of the original list price, with BMW coming in third with 58.65%. Said Darryl Jacobson, MD of True Price: "Mercedes-Benz vehicles have long held their value, and I strongly believe that they always will." 

Mercedes-Benz

2020 Mercedes-Benz  B-Class. Image: MotorPress

Entry-level resale value

Jacobson says it is interesting to see younger buyers avidly bidding on Mercedes-Benz vehicles: "The company has done an astoundingly good job of making its product range relevant and enticing to a large audience."

This strong resale value also applies to the entry-level Mercedes-Benz A-Class. Using the same methodology, True Price established that compared to the BMW 1-Series and Audi A3 Sportback, the Mercedes-Benz kept its value best.

The model achieved 76.69% of its original list price at auctions, while the runner-up, the 1-Series, attained 68.74% and the A3 obtained 66.46%.

According to Jacobson, the new baby Benz launched locally in August 2018, is a magnificent vehicle, further emphasised by being chosen as winner of the coveted 2019 AutoTrader South African Car of the Year competition.

So, with Mercedes-Benz South Africa currently offering innovative deals on online purchases and via dealerships, whether you choose a sedan, a coupe, an SUV or a cabriolet now is probably the best time to make a sound investment during an uncertain period.

Mercedes-Benz

2020 Mercedes-Benz A-Class. Image: Daimler

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