Not all depreciation exists because the car is a raging turd. I mean sure, some of it is because of that but you also have to consider the target demographic of these cars. Wealthier people. And when they get rid of them do you think other wealthy people want them? Generally no. They too want the latest and greatest. So the flagship cars skip an entire demographic and generally slip from really expensive to bargain hunter.
Compare two cars:
Toyota Camry - Scenario: Buy it for $25,000, drive it, sell it after 3 years. Any putz can afford a Camry. When they sell it used it's worth maybe $16,000. Someone buys it at that price to save some money. Likely that person could also afford it new. They just choose not to buy it new.
Mercedes S550 - Same scenario: buy it for $100,000, drive it and sell it after 3 years. Now you go to sell it. Let's say like the Toyota in my example it suffers from a depreciation rate of 35% after the first three years. You're looking at $65,000 for a 3 year old high tech Mercedes, close to being out of warranty and it's still a ton of money. Who's going to buy that car? People that can afford it aren't generally dumb enough to pay that much. They'll just go out and buy a new E Class. So that second buyer is generally someone making substantially less than the first.
The car's skip entire pricing demographics. The other half of that depreciation curve is certainly based on poor reliability. Not only that but the last Gen S class is a turd inside. Go drive it and then drive a 2008 or 2009 A8. It's not even close. The A8 blows it away in almost every aspect. Other than that, I have no real experience with Mercedes but hear it's similar to Audi and high end Audi's suck.
I wouldn't buy either though. If I had to go down this road again I'd look for a 2011+ Msport 535i and be done with it. The F10 5 series is an amazing car and it's cheap. This is after a 30 second search but this past fall I was looking at 2013 535's with 40,000 miles fully loaded for $32,000. That is so much car for the money and it's a car I feel like I could still fix a lot of stuff on myself.
535i BMW 2011 Sedan
The Tesla is a good looking car but for the front end, I can't think of a modern car I like more than the F10 5 series with the LED headlights and m-sport package. Plus the interior blows the Tesla away.
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