How much would you spend on a new car?

enthusiasticsaver

How much do people generally spend on new/replacement cars these days?


I will be trading in my Renault wind convertible which I bought brand new 5 years ago next summer and will be buying a more practical car to carry our new grandchild around in. I am saving up to add to the trade in price and will be using my National Savings index linked certificates which mature next May as the interest on those is negligible with low inflation. I am estimating I will have around £20k at my disposal but would rather spend nearer £15k for a 1.6 5 door automatic practical car.


I had a great interest free deal on my brand new Renault 5 years ago and there still seems to be a lot of those deals around but the price of the cars are so expensive I wonder if I should go back to used cars instead.


Does anyone have an opinion on whether it is better to go for used and pay less or go for brand new with all the deals that sometimes go with it - free servicing, interest free finance etc and no worries about buying a dud car that is going to need a fortune spent on it in a few months time?

DUTR

Spend what you can easily afford, if you are not buying it outright, then spend the monthly repayments you can afford with a contingency plan should your circumstances change.

FreddieFrugal

One thousand, five hundred and sixty-seven pounds, and seventy three pence. No more no less.

In reality I'd hope to pay no more than £5,000 plus trade in value of old car for a Focus sized car.

No more than £2000 plus trade in value for a city car.

But if another K meant a considerably 'better' car than I'd be flexible.

This is buying used obviously. Used, with the understanding that you get something that's been fully serviced and looked after reasonably, will pretty much always be the best bet financially. The 'best' cheapest car you can get, so long as it's in good condition.

You can always get finance on used if you don't have money available and can't wait to save.

iainscomputer

I was told not to spend more than £5000 on a car! I know lots of people spend more than that, I bought a car in 2003 for £4300 & kept it till 2009. Then I bought another for £5000 which I still have.
My previous cars were all under £1000.
I think it depends on how much driving you do, I only do a low mileage, so it's mad to spend lots on a car to sit on the drive all day.
The problem is that cars lose such a large part of their value in a short space of time. A £20000 new car, can be a £9000 used car in two years very easily.
Good luck with choosing your new wheels.

forgotmyname

Upto £2500 now, but closer to £2000 initially. If i cannot find one for under £2000 then i up the price a bit until i find one.

If nothing suitable pops up then i wait a few weeks and try again. Quite funny to see the same cars up for sale several weeks later.

bowlhead99

enthusiasticsaver wrote: »

How much do people generally spend on new/replacement cars these days?
Does anyone have an opinion on whether it is better to go for used and pay less or go for brand new with all the deals that sometimes go with it - free servicing, interest free finance etc and no worries about buying a dud car that is going to need a fortune spent on it in a few months time?

A car always loses the most in its first few years. Depending on the make and model, a car might last 150-250k miles before becoming a banger. But in just the first 3 years / 30k miles it can lose 30-60% of its initial headline price.

So, it takes a brave person to ride out that particular part of the depreciation curve, and the premium to buy new can be a huge amount to pay for the ability to build your exact preferred spec and the comfort that your service costs will pretty much just be oil changes in that time.

To be honest, it's pretty unlikely that a 3-year old car with 20-40k on the clock is "going to need a fortune spent on it in a few months time". Sure, it might need its first replacement brakes and tyres around that mileage but you can assess that when buying and know what you're getting into ; these are just ongoing consumables that any age of car might need, and you can still pick up a warranty when buying from a dealer at that age if you're concerned about bigger components going pop.

So if you are comparing buying at three years old versus brand new: the dealer trying to get you to buy new is going to need to give you a hell of a lot of freebies, cheap finance and insurances together with deposit contribution for it to be worth a third anything like a half of the initial value of the car, which is what you can save off the headline price by buying second-hand.

From time to time there are occasional good deals on buying new and some people's personal circumstances might get more out of the dealer freebies than others - for example if you are a new driver living in a city centre without great credit history who would otherwise pay through the nose for insurance and finance, you will get much much more out of a deal that gives you a year or two insurance and a competitive finance package, than someone who only pays a few hundred a year for insurance and could easily get a loan at under 4% from their building society or supermarket.

But for someone who can already afford to pay cash for whatever they buy, a dealer offer of 'free servicing' during the initial years when there's nothing much to service anyway, can't possibly make up for the chronic depreciation. You're paying a lot for that 'new car smell'!

I am saving up to add to the trade in price and will be using my National Savings index linked certificates which mature next May as the interest on those is negligible with low inflation.

Not the main thrust of this thread but as a side note, beware of looking at what the ILSCs paid you recently - during a period of 1% RPI inflation when a lot of the price rises for general goods and services were offset by the oil price dropping from $100 to $50 a barrel and helping out with energy and petrol bills - and using that as a benchmark for what the ILSCs might be worth to you in the future. As we come out of recession and levels of employment and workplace pay rises improve, and oil price doesn't fall by another $50 over the next year or two... inflation will inevitably rise.

The purpose of ILSCs is to give a guaranteed return and prevent your long term cash savings losing value in real terms; and once you cash them in you can't buy more because they are a such a good product that the government can't afford to offer them to everyone who wants them... so I would be wary of cashing up to get a slightly shinier car.

How much do people generally spend on new/replacement cars these days?

This is a question that is not really worth asking because everyone's circumstances are different; there will be some people who have always spent £500-£2000 on their cars and paid high service bills (or are canny DIYers) and there will be others who buy or lease cars in the £30-50k range and change them every year or two or three, and there will be people who have a £100k car that to them is just a toy. And everything in between.

I don't do a lot of miles, and prefer to buy after the initial crazy-ness has come out of the depreciation curve and then keep for a long time. I bought my previous car in 2002 at five years old for £7.5k (new would have been ~£16k). I bought my current car in 2014 at three years old for £32k (new would have been ~£66k).

Davesnave

I've never paid much more than £2k for a car, because my disposable income doesn't sit comfortably with owning something that could depreciate by that much in a single year.

Yes, owning a newish car is pleasant, but when I had a brand new model for 6 weeks, courtesy of an insurance company, I didn't feel that it had enhanced my life very much, or increased my self-esteem. After all, I know plenty of fools who drive £20k cars.

Indeed, where I live, any newish car soon develops the tell-tale signs of country living. The shine soon goes from the left side, and in winter, or at harvest and ploughing times, the mud is enough to make the car washers in Sainsburys look the other way!

The one vehicle I really enjoy owning is my van. It's large enough that I usually only have to give way on lanes to tractors and other vans, but better than that, it lets me see over so many hedges. Besides, it's often extremely convenient to have a shed on wheels, wherein to hide a multitude of sins.....

I paid a good deal more for the van than for my last car.

gilbert_and_sullivan

Your mechanical aptitude is a big influence here, if you rely on garages to do everything then buying the right car new can make sense, especially if it comes with a proper warranty and not the 3 years that some makers trust their cars to last.


You won't get cheaper than buying the right car when its older, but ongoing maintenance and the odd repair can be costly unless you do it yourself, especially if you use fast fitters.

Piggywiggy

For a car up to 5k plus a grand or 2 for trade in so around 6 or 7 all together, for a 4x4 though I would spend twice that.

martinsurrey

Since you don't need a new car now I would start researching when the main manufacturers are releasing new models.

you can normally pick up a great deal as the dealers get rid of the old shape.

I got a 1.6 Astra Sport hatch SRI for £10k, which was cheaper than a similar spec Corsa at the time, when they released the Astra GTC.

Herzlos

There are too many factors, like how much you rely on your car daily.

I tend to budget for around £5-7k for a car, because I can pay that off over 3 years comfortably and be OK if it's worth nothing at the end. But then I'm usually looking at out of production luxo-barges that noone else wants.

I'm considering going up to about £11k on the next one as I want something more specific and plan to keep it longer.