Vehicle depreciation

Submitted: Friday, Jun 13, 2003 at 13:39
ThreadID: 5429 Views:3194 Replies:16 FollowUps:25
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I recently asked the Lexus dealer what my nearly 4 yo LX470 would be worth as a trade in on the new mid-size Lexus 4WD ($86,000 OTR). The LX470 is immaculate and fully serviced by Lexus. Purchase price was some $120,000. OK its done 140,000 km, but mostly highway, and its got to be good for a half a mil. Trade in Value ...... What would you reckon?
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Reply By: Fredo - Friday, Jun 13, 2003 at 13:51

Friday, Jun 13, 2003 at 13:51
I'd hesitate a guess $50,000 - $55,000??? (by the way i'm laughing my head off) Alot of money to outlay for an overpriced Landcruiser - and the amount you have lost is enough to purchase your mid-size Lexus.

CRAZY
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Follow Up By: Member - Bob - Friday, Jun 13, 2003 at 14:00

Friday, Jun 13, 2003 at 14:00
Fredo, I was anticipating that the Lexus would maintain its value pretty well, and that in the long run the cost of ownership wouldn't be too unreasonable. The mid sized Lexus wasn't around 4 years ago so wasn't part of the equation. I was in a position to afford the Lexus at the time, and it has several major advantages over the Landcruiser. Some people might say that the Landcruiser offers no more than the vastly cheaper Patrol? What do you drive Fredo?
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Follow Up By: tristjo - Friday, Jun 13, 2003 at 15:20

Friday, Jun 13, 2003 at 15:20
Too bloody right, Freddo!!!

An extra 60 k for a fridge, a bit of leather and IFS???? You have got to be kidding!!!

Sometimes I think that people have more dollars than sense!!!

Tristjo.
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Follow Up By: Member - Bob - Friday, Jun 13, 2003 at 15:48

Friday, Jun 13, 2003 at 15:48
Not to mention the V8 (only available in the $90k GXV then), variable ride height suspension, two diff locks, bigger brakes, and a level of quietness and comfort that makes the GXL seem pretty crude in comparison. Maybe the Lada Niva driver would use Tristjo's last comment about all the rest of us.
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Follow Up By: Old Soldier - Friday, Jun 13, 2003 at 15:58

Friday, Jun 13, 2003 at 15:58
Ignore it Bob,

the "tall poppy" syndrome is still alive and well in Oz

enjoy the bush

DennisN
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Follow Up By: tristjo - Friday, Jun 13, 2003 at 16:15

Friday, Jun 13, 2003 at 16:15
Ignore what, the fact that you got completly ripped off??? I don't have a problem with people who are wealthy, in fact, I would go as far as to say I am proud of them, because wealth follows years of persistance, and bloody hard work, things that alot of us are scared of!!

My problem lies with the way alot of people like to demonstrate their wealth. Why buy a car that really doesn't have much over one that is 60-70 thousand dollars cheaper???? Maybe for their public stature??

And your comments about the GXL being " pretty crude in comparison", that would have to make an 80 series, in your eye's, only comparable to a T model!!!

Please, mate, you don't have throw your money around for people to respect you!!!

Tristjo.

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Follow Up By: Member - Bob - Saturday, Jun 14, 2003 at 11:38

Saturday, Jun 14, 2003 at 11:38
I didn't buy the car for "respect". The real reason was that I had been diagnosed with cancer and was recovering from the surgery/chemotherapy/radiotherapy. It was time for new vehicle and I recalled that I hadn't struck too many people on their death beds wishing they had driven a crappy car for the last few years of their life. So I thought with a 50% chance of being here in five years I might as well get a car I will really enjoy. Which I have.
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Follow Up By: tristjo - Saturday, Jun 14, 2003 at 13:54

Saturday, Jun 14, 2003 at 13:54
Bob,

Mate, as I said, I have a lot of respect for people who have worked bloody hard to be where they are now. I never posted my response to incite an argument regarding "tall poppy syndrome". I don't hold any grudge against you whatsoever, and find it offensive that you would think of me as being such a jealous, small minded person.

I don't doubt that you worked very hard to own your Lexus, and I am very sorry that you have been affected by such a terrible condition.

I will say, though, that I don't find it surprising that your vehicle has depreciated so quickly, when, essentially, it is not 60k different than a GXL spec. It is the same with TI Patrols. When they were new, the sold for 70k, but you can pick up a 98 model, with around 100k on it for 35 grand!! A ST diesel Patrol, same age, same klm's, can be had for around early to mid 40k, but when new, sold for around 55k.

It's all about supply and demand, and what the current market is willing to pay for a vehicle, which now has an equivelant for around 65k in the V8 GXL.

Tristjo.
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Reply By: Fredo - Friday, Jun 13, 2003 at 14:15

Friday, Jun 13, 2003 at 14:15
I've just picked up a Mitsubishi Challenger, but this isn't a Toyota v Nissan v Mitsubishi debate. I've recently sold my Surf which was fully optioned that I imported personally 13 months ago. I added ARB bars, suspension etc and made a $6K proffit.
I hate losing money on cars thats why I try to buy sensibly and also sell at the right time.
It's obvious i'm not about to dip into the over $50K 4WD market as there is exactly what I need in the lower price bracket - and obviously a fully optioned Lexus LX470 is coming into my window of opportunity.
I personally like the options, or more like "fully optioned" cars. I prefer 4WD'ing in comfort with everything at the push of a button - probably like yourself.
FREDO
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Reply By: monty - Friday, Jun 13, 2003 at 14:32

Friday, Jun 13, 2003 at 14:32
my BMW depreciates at about 10% p.a. which is about as good as it gets( about 6k a year)
I'd guess the Lexus would be about the same which would add up to about 48k over 4 years so I'd say market value would be about 78k and the dealer wants a profit so he probably quoted around 70k.
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Reply By: Member - Rohan K - Friday, Jun 13, 2003 at 14:48

Friday, Jun 13, 2003 at 14:48
I doubt it held its value as much as a BMW. I'm going for between $48,000 and $53,000.

Bob, I suffered the same with my Subaru. Different class, I know but I was led to believe they held resale value well. The dealer offer was a joke and I noticed he was selling the exact same model (different colour) with 6,000 kms more on the clock, for $10,000 more than he offered me as a trade-in. I understand they're in the business business to make money but pleeease!! I told him to shove it and am now trying to sell it privately (for not much more than he offered me. Hmmm).Talk is cheap ...
Rohan (Sydney)
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Follow Up By: Truckster (Vic) - Friday, Jun 13, 2003 at 17:26

Friday, Jun 13, 2003 at 17:26
Rohan,

Did you confront the dealer pointing to the other car of same model, more klms etc and say, $10k more for that? $10k profit, shiat he wanted his money that week! must have been a slow week..

Just interested to see what they would say, havent been in that position myself to do that to one, but ID LOVE TO!!!!
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Follow Up By: Member - Rohan K - Friday, Jun 13, 2003 at 17:39

Friday, Jun 13, 2003 at 17:39
No I didn't. I was on the way out after scoffing at his offer anyway. Saw the one in the yard, looked at the wife, shook the head and wandered off.Talk is cheap ...
Rohan (Sydney)
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Reply By: Old Soldier - Friday, Jun 13, 2003 at 15:55

Friday, Jun 13, 2003 at 15:55
G'day bob,

Heres what the red book says:

Being 4yo I based it on 1999 model

LX470 100 wagon trade price $50,000 - 57,100 [new approx 116K]

LX 470 UZ [August 99 on] $53,000 - $60,000 [new approx 122K]

Average KM should be 85-105,000 KM - yours is quite a bit over that and this will count with the dealer.

Get all the red book prices here:

http://www.redbook.com.au/vehiclesearch/default.asp

enjoy the bush

DennisN
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Reply By: Member - Bob - Friday, Jun 13, 2003 at 16:07

Friday, Jun 13, 2003 at 16:07
Dennis, I checked Redbook as well. Interestingly the values listed for the GXV were only $2000 less than the LX470. The dealer offered me $40k. The reason I started this post was to alert people to the fact that Lexus has appalling resale value, and for prospective owners to factor in very poor trade in valuations when it might come time for review. I have been very happy with the car and will probably keep it for several more years. It still feels like a new car to drive. If I were in the market for a second hand truck aroundf the 40 to 50 k mark I would serioiusly consider the Lexus as it seems a real bargain at that sort of price.
AnswerID: 22433

Follow Up By: Old Soldier - Friday, Jun 13, 2003 at 16:16

Friday, Jun 13, 2003 at 16:16
G'day Bob,

Yeah - it's sort of a Fairmont/Fairmont Ghia type of thing

At the end of the day people still see them as a Falcon - just with a few luxury bits to tart them up.

Normally they are mechanically the same vehicle, though I don't know if this is the case with the Cruiser/Lexus.

Anyway - sounds like you enjoyed your purchase and the time spent in it, and really thats all that matters.

enjoy the bush

DennisN
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Follow Up By: flappan - Friday, Jun 13, 2003 at 16:51

Friday, Jun 13, 2003 at 16:51
I recon the Lx's are a nice piece of kit.

If thats your thing, and you can afford it, who gives a toss anyway.

Its a bit disturbing about the resale though.

I suspect, as Old Soldier mentions, that it gets compared to a Cruiser.

How do the Lexus Cars fair, nothing else to compare them to.
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Follow Up By: Truckster (Vic) - Friday, Jun 13, 2003 at 17:32

Friday, Jun 13, 2003 at 17:32
I'm with Dennis on this one, ignore the rest, it aint my cuppa T either, but if you got the $ go for it... bleep if I had the $ Id order a custom GU with the new TD42T in an AUto if Nissan would do it.. But I couldnt face myself scratching a $40k car, let alone $100k!

But if he only offered you $40k (beats my thread on Rip off of the year hands down!!!!!), I would laugh at his face and walk out.. Id love a photo of your face when he offered $40,000! I think he would have known instantly he had no sale!!!!

As you say, enjoy it for another 7 years, and sell it for $45k then!

Have you looked in the trading post to see if others are for similar prices, and if they are selling?
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Follow Up By: Member - Bill- Friday, Jun 13, 2003 at 17:33

Friday, Jun 13, 2003 at 17:33
With the last model update they reduced the price and increased the features to better compete with the rash of new luxo 4'by competition. Predictably this hurt the resale of older models.Regds

Bill
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Follow Up By: dp - Saturday, Jun 14, 2003 at 19:13

Saturday, Jun 14, 2003 at 19:13
When you do get round to selling it. Get a trade in price and then do the second hand world a favour by selling it in the paper at that price. Then demand same deal from dealer with cash instead of trade in. If he says no just walk away and find one who will. Nice to know the depreceiation will go to someone who wants a good vehicle and not some parasitic dealer. I recently had to do a trade on a late model 4 x 4 as because of work I couldnt be without a truck while messing around selling and buying, certainly hurts when you drive past a month later and see it in the yard at 7 grand higher than you got for it. If I had have had the time would have rather passed on that deal to an honest punter who would have got a great truck for a good price.
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Reply By: ThePublican - Friday, Jun 13, 2003 at 17:47

Friday, Jun 13, 2003 at 17:47
Bob ,reading the replies show that jealousy is still very much alive and well, on a slightly different note,the annual survey of the " most trusted and respected proffessions" .. top 100.. used car salesmen come in at no99 ,used car saleswomen at no98 ,and NEW car salespeople manage to reach the dizzy heights of no96 just in front of " no win no fee " solicitors,,,
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Reply By: Member - Willem- Friday, Jun 13, 2003 at 18:09

Friday, Jun 13, 2003 at 18:09
I just love to get into Bob's threads but this time I have no comment that might make him angry :-)

All I can say is that I would most likely have to PAY someone to take my truck off my hands!!!

Next time you're passing this way Bob drop in for a cuppa and take me for a ride in your Lexus.
Cheers, Willem
Never a dull moment
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Follow Up By: Old Soldier - Friday, Jun 13, 2003 at 19:54

Friday, Jun 13, 2003 at 19:54
Hey Willem,

I hope you never get rid of Rosie.

I had the use of a blue one of those some years back and this one was called "Flossie". [I wonder if they knew each other :):):) ]

It was a ripper, and took me an my son on a great jorney of discovery throughout SW Queensland at a time when he needed some time out with his old man.

It was my first taste of a Patrol and I have had a soft spot [and owned a few of the later models] for them ever since.

enjoy the bush

DennisN
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Follow Up By: Member - Willem- Saturday, Jun 14, 2003 at 18:09

Saturday, Jun 14, 2003 at 18:09
Hello Dennis,

No, I have no intention of getting rid of the 'old girl'. At the moment I am doing some dustproofing and rust repairs to the floors and firewall I should have done 5 years ago. The model I have is the 'Heavy Duty' one and everything in it has extra strength especially in the drive train and chassis. I this is my 20th 4x4 and it is the most reliable one I have ever owned. Even when I was earning good money I still drove an old car. Now that I am retired and on a pension I have to watch my pennies. With this old vehicle I find that I worry less about it, I don't care about insuring it, I can drill holes in the bodywork, I can shape its configuration to suit my needs. It has no resale value but to me it is worth everything. I still find parts for it at the wrecking yards. It goes anywhere I point it and has incredible low gearing(has a 5 speed) for real rough stuff. On a good day I can sit on 110 km(with a tail wind). Apart from that I am the only one tall enough to get into the drivers seat and without power steering there aren't many takers to drive it !! I figure that I have about 15 years left of active travels out into the bush and if I make that age then this old vehicle will make it as well unless there is a government decree to ban all orange Nissans off the roads:-)

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Follow Up By: johnsy - Saturday, Jun 14, 2003 at 20:45

Saturday, Jun 14, 2003 at 20:45
Willem said "unless there is a government decree to ban all orange Nissans off the roads:-) "there is one for sale at this very moment opposite Araulen Park wouldnt have been resprayed out of the same can of paint would it by any chance. :-)
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Follow Up By: Member - Willem- Sunday, Jun 15, 2003 at 20:58

Sunday, Jun 15, 2003 at 20:58
Hey Johnsy, That is special Haymes Paint, mixed to just about the same original colour. A tad brighter though. Pity I applied it with a brush. :-) If you see a G60 for sale for 500 bucks let me know as I need some sparesCheers, Willem
Never a dull moment
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Follow Up By: johnsy - Monday, Jun 16, 2003 at 09:18

Monday, Jun 16, 2003 at 09:18
Willem Ill sus out how much this ones going for and post later.cheers.
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Reply By: Member - Wherethehellawi - Friday, Jun 13, 2003 at 19:13

Friday, Jun 13, 2003 at 19:13
Bob if it were diesel I reckon it wouldnt have depreciated so much like the petrols do...my next is going to be diesel even if it costs a little extra per litre.
Richard
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Reply By: bruce.h (WA) - Friday, Jun 13, 2003 at 20:14

Friday, Jun 13, 2003 at 20:14
Gday bob
interesting coments on the purchase of your car resale is not suprising
was told by adealer that you loose between 20 to 35% the minute you drive it out the doorof the car yard as to the comments on buying a lexus hell i bet if you looked at what those who are bitching spent on buying thier cars in comparsan to what they urn per year they probably spent / streched their budget more than you & will feel the pinch at resale time a hell of a lot more than you the whole point of wirking hard is so you can have what you want & if you can afford it why not . to those who bitch about people who have money never judge a person with money for you never know what they have had to endure to get it
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Reply By: Allfour4x4 - Friday, Jun 13, 2003 at 21:24

Friday, Jun 13, 2003 at 21:24
If you think all this stinks, spare a thought for a Porche 928 owner
New in '95 cost 241k
Trade in 60k
So much for luxury cars value holding potential
By the way doooon't own one! though I often dream't of one
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Reply By: Member - Bob - Saturday, Jun 14, 2003 at 11:47

Saturday, Jun 14, 2003 at 11:47
Thanks for the entertaining remarks everyone. I added a comment to Tristjos post which might have been missed above so I add it here. I probably am a wanker, but that isn't why I bought the Lexus
From above : "The real reason was that I had been diagnosed with cancer and was recovering from the surgery/chemotherapy/radiotherapy. It was time for new vehicle and I recalled that I hadn't struck too many people on their death beds wishing they had driven a crappy car for the last few years of their life. So I thought with a 50% chance of being here in five years I might as well get a car I will really enjoy. Which I have." Looking on the bright side, if the resale value had been really high, I probably wouldn't have been here to worry about it.
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Follow Up By: JC - Saturday, Jun 14, 2003 at 15:41

Saturday, Jun 14, 2003 at 15:41
Hi Bob,

My Mum was diagnosed with metastatic liver cancer just before Easter and has undergone an operation and chemo.
Since then dad has bought her a brand new Merc to drive in (she absolutely love it!), a dirty big big diamond ring (which she loves even more!!) and believe it or not, she said that she has never been happier and really enjoying life to the fullest.
I am planning to take her out 4wd and camping when it gets a bit warmer.
A wanker, definitely not, I'd love an LX470. I hope you enjoy your cars for for at least another 20 years.

JC
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Follow Up By: Member - Wherethehellawi - Saturday, Jun 14, 2003 at 16:07

Saturday, Jun 14, 2003 at 16:07
ditto the last 2 lines of JC
Good luck Bob and enjoy life to the fullestRichard
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Follow Up By: Member - Bob - Sunday, Jun 15, 2003 at 10:17

Sunday, Jun 15, 2003 at 10:17
JC, I hope she's around for while to enjoy them. But then, you tend to appreciate everything more after a bit of a scare.
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Reply By: Brad - Saturday, Jun 14, 2003 at 17:08

Saturday, Jun 14, 2003 at 17:08
New (and used) car prices have undergone effective depreciation over the last several years - some attribute this as one of the benefits of the internet which has allowed car makers to aggressively pursue lower prices for their materials and parts. So what we all gain with better (and effectively cheaper) new cars we will also all lose with our trade ins.
I've just bought a new LC100 V8 GXL (5sp) auto for $60k on road which I think is good value, I suspect that means Bob that your V8 is worth a lot less with 140k on the clock.
You'll get to laugh at me in 4-5 years when you buy an even better Lexus/ Toyo !!!
By the way Bob, what sort of fuel economy have you got (on-road, off-road, towing),
Regards,
Brad.
AnswerID: 22514

Follow Up By: Member - Bob - Sunday, Jun 15, 2003 at 10:15

Sunday, Jun 15, 2003 at 10:15
Brad, around town it uses about 20 L/100km. On Hwy at 110kph about 16 L/100km and towing seems alot worse ( maybe 25 to 30) - I haven't measured it. On a recent trip my mates were responsible for fuelling the Lexus and it was always stopping for drink while the TD5 seemed to go forever. I agree the current V8 for 60 k is good buying. Esp given that the rotten 4spd transmission has been upgraded.
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Reply By: Bill - Sunday, Jun 15, 2003 at 09:56

Sunday, Jun 15, 2003 at 09:56
Bob I bet you're glad you didn't buy a Land Rover - you haven't seen depreciation till you've had one of them - mainly because noone wants to buy them second hand as they're heavily discounted new, and also you'd be risking a lot to own one not covered by warranty!!
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Follow Up By: Member - Bob - Sunday, Jun 15, 2003 at 10:07

Sunday, Jun 15, 2003 at 10:07
Hah hah Biil, I did. The other car is a TD5 disco. Other than for replacement of CD player and immobiliser control unit, I've had a good run with it. Its driven day to day by my son but used for bush trips when Lexus not appropriate. I suspect reliability concerns relate to older models.
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Reply By: Wil - Sunday, Jun 15, 2003 at 20:25

Sunday, Jun 15, 2003 at 20:25
Guys

As a guideline, we should not be driving anything over the 10% value of your entire asset value. e.g. If your personal asset (Houses and all) is 500K, you should look at a 50K wagon (give or take). Otherwise you will be worried about resale and depreciation. They are designed with a certain lifespan, irrespective of make or model.

Enjoy the years your have while driving it. The world might not be around tomorrow. Have fun and buy a new one. Call it a life cycle...
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Follow Up By: Member - Willem- Sunday, Jun 15, 2003 at 21:02

Sunday, Jun 15, 2003 at 21:02
Yep Wil,

Cars are just recycled earth.

Yeah, my car equates to about 10% of my asset value :-)))Cheers, Willem
Never a dull moment
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Reply By: Member - Melissa - Tuesday, Jun 17, 2003 at 13:42

Tuesday, Jun 17, 2003 at 13:42
Hi Bob,

Scary aint it! Can't help but wonder if the Lexus dealer honestly thought he might get a deal out of you. Let's face it, we all know you don't buy cars to make money on them but from what I've seen over the years, most medium to large 4WD's still hold there values better than your average sedan.

Lesson I learned many years ago was don't buy a new car because the biggest drop in value (between 10-20% from what I've seen) occurs the moment you drive out of the dealers yard. Ever since then, we've made a point of looking for near new or demo models with minimal k's on the clock. You still get your warranty and can save big $ on purchase price. We bought our 4 year old GU with 28,000k's on the clock. Friend bought a demo model Camry with 4,000k's on the clock. Got full 3 year warranty and saved $7K.

:o) Melissa

:o) MelissaPetrol 4.5L GU Patrol &
Camprite TL8 offroad camper
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