Changing a car ever 3 years

gk172

grumbler wrote:

Is not it too optimistic? :think: Example (from http://www.autotrader.co.uk/):

2002 DAEWOO MATIZ SE, 02 reg. 27000 miles, fsh, ... , pas, r/cassette, airbags, one owner, MoT Feb 06, main dealer service history, just serviced, ready to go, px, . . . . (trade) £2,295

Sorry ive got to agree, 2 years ago we were on the look out for a newer car, our p reg escort 46000 (7 year old) started going wrong in a few places so we looked at a few cars and decision was between a 52 primera with £500 trade in and a 52 plate mondeo same trade in, and in autotrader we saw p escorts same spec and condition (very low milage) going for £2500 so that shocked us and peeved us off then we found our ideal car a pre registered black mondeo 12 miles on clock but a 52 plate model for £4000 under the book price and they offered us £750 trade in so effectivley a brand new car except the plate was older and we plan on keeping this for minimum 6 years.

italiastar

It's a said fact of life that after 3 years, most cars are worth about half of their original price - trade in even less!

jjames_3

Very true.

There is a way to take advantage of this though, if you're not badge conscious. I've done this myself.

Buy a Hyundai at 3 years old. They're only worth about 30-40% of their already low new price by this stage. They come with a 5-year, unlimited mileage warranty, so you still have a 2-year full manufacturer's guarantee when you buy one. To cap it all off, Hyundais have above-average reliability, so not much goes wrong with them in any case. And when they do go down, the engineering is so simple that even though the parts are a little expensive they're cheap to repair, because it doesn't take long for the garage to turn them around.

OK, so my Accent is unlikely to turn any heads. But I don't care. I'll get 6 or 7 years out of this 1.6l car, with the gadgets, and I'll have only paid £3000. That's even better than bangernomics in my book It's a car you choose with your head rather than your heart, but it's a better plan than buying an 8 year old car for £2000 IMHO.

Whichever way you do things though, buying second-hand is far more sensible than buying new. Most newer cars are generally very reliable things.

mattrgee

It would appear there is more to be gained from keeping a car for more than 3 years than getting rid of it.

Another equally stupid comment is:

'paying for the repairs of a car more than 3 years old is just dead money'

Errr, well what would happen if I didn't pay for the repairs? Thats right, no car! It all comes down to cost, unless the car needs some serious work doing on it, it will always be more expensive to change the car than get the old one repaired. Thats the way I see it.

dougk_2

Why anyone buys a new car its beyond me!

First you loose so much money as soon as it leaves the showroom
Secondly you end up with all those niggly initial problems
Thirdly you are so scared of getiing a dent or scratch you worry about it!

Buy an older car where the initial value has been lost (so pref 3 years old+)
You then have all the niggles fixed and you don't worry so much about the car.

Xbigman

grumbler wrote:

Is not it too optimistic? :think: Example (from http://www.autotrader.co.uk/):

2002 DAEWOO MATIZ SE, 02 reg. 27000 miles, fsh, ... , pas, r/cassette, airbags, one owner, MoT Feb 06, main dealer service history, just serviced, ready to go, px, . . . . (trade) £2,295

Two points

1. I based that price on comments on one of the car price sites for trade in values / resale prices (71% I think it was for under 20K mileage) and the fact I was offered 2400 trade in on my current now older Matiz.

2. I can show you two ads like that in Bristol right now but when you phone up that car has 'just gone' or its 'a mistake' but they have some very nice higher mileage ones for just a bit more.
Average price on a 3 yr, 50K ish mileage Matiz seems to be around 3400. So I'd now expect around 3200 private sale (ouch). I heard second hand car prices were dropping and this would seem to apply to the smaller car market too.
With the free servicing from Daewoo (which I think you still get) it might just be worth it for low mileage owners but outside that, forget it.
Regards



X

jjames_3

mattrgee wrote:

It would appear there is more to be gained from keeping a car for more than 3 years than getting rid of it.

Another equally stupid comment is:

'paying for the repairs of a car more than 3 years old is just dead money'

Errr, well what would happen if I didn't pay for the repairs? Thats right, no car! It all comes down to cost, unless the car needs some serious work doing on it, it will always be more expensive to change the car than get the old one repaired. Thats the way I see it.

Absolutely.

I hear comments from people who are going to sell their car "while it's still worth something". The argument goes that if you wait until the car is worth very little, you'll end up paying more when you get your new set of wheels.

I think this is complete tosh. If you get rid when the car is worth £3k still rather than £1500, fine. But that £1500 of value is probably about 3 years or so. By putting the £200/month away that you'd be paying for that newer car, by the time you come to sell the "worthless" car you'll still get the £1500, *and* £7200 in savings (plus interest). Making that new car £5700 cheaper.

And if you're worried that the car won't make it for another 3 years without something going bang, well just take out a warranty. OK it'll eat about £600, but that's still a damn sight less than the depreciation on the new car.

The art to buying and selling cars is to buy just after the bulk of the depreciation has been stripped away from the car's value, and get rid just before it starts giving trouble. Generally, that means buying at 3 years old and selling at about 9 or 10.

biblejohn

As others have said, you only have to do a bit of research on autotrader to get some idea of the depreciation of new cars. Unless its a very highly sort after car you`ll loose thousands as soon as you drive it off the forecourt. Some cars do hold their value better than others, but you`ll still loose money.

Some of the best buys are ex fleet cars which are just 3 years old. They usually have high mileage, but have full history and enable you to get a newer car cheap.

I personally run an old banger. I bought my car 2 years back for 800quid and looking at the 2nd hand prices, its currently worth about 800->1000quid. Its cost me about £200 a year in total so far for its MOT and various parts which have gone wrong. But, its 100% reliable, cost me 150quid to insure and does 55mpg.

If id had bought a newer car, the depreciation a year would definately have been more than my car actually cost me to buy.

Jacster_2

My six year old car just cost £55 in repairs to get through it's MOT. It's a gamble, but it can work. I'd never buy a new car.

Paul_Varjak

If you can get a big discount on a new car that suffers little from depreciation and you also qualify for VAT releif because of a disability then, yes, get a new car and sell after three years.

From memory, typical depreciation on a three year-old car is in excess of 40% (not sure if this is based on trade or private sale). Just look at at Autocar (or something similar).

I think people often have unrealistic expectations of their car's value - hence the reason so many dispute offers upon write-off. When my car was written-off I did my research before an offer was made so I knew that the insurance company offered me top price!