Buying a £20k car, sell in 2 years, just pay off depreciation

MEM62

marlot wrote: »

I bought a 4,000 mile 11 month old landcruiser in March 2008 for £24k.

Nearly eight years later, and with 57,000 miles it's still worth about £10k, so a bit less than 2k a year depreciation.

Over 8 years that may be the case but I bet it didn't loose value at a steady rate. How much did it loose in the first two or three years? More than 2K a year I reckon.

AdrianC

victor2 wrote: »

But what did it lose in the first two years, which is what the OP was looking at? A bit more than the 2K a year referred to, I would imagine.

Current list price for LandCruisers is £32-52k...

marlot

victor2 wrote: »

But what did it lose in the first two years, which is what the OP was looking at? A bit more than the 2K a year referred to, I would imagine.

The OP didn't say the car had to be brand new. I bought this at just under a year old. Indeed, the first owner likely lost £6k in 11 months.

It wouldn't surprise me if the value was around 20k after two years of me owning it.

It's just an illustration to show that it is possible to buy cars which depreciate more slowly than you might think. But you have to get out of the mainstream.

[I reckon the reason landcruisers depreciate slowly is partly because people are reluctant to own landrovers when the warranty ends - and there will always be people who need a proper 4x4]

Edited to add: If I were buying a car at the moment, I'd be tempted to get to a VW group dealer and haggle hard on a pre-registered or nearly new car car. Buying something that others are shunning puts you in a good position. And a couple of years should be long enough for most of the issues to be resolved/blow over.

bigjl

marlot wrote: »

You have to choose something a little unusual.

I bought a 4,000 mile 11 month old landcruiser in March 2008 for £24k.

Nearly eight years later, and with 57,000 miles it's still worth about £10k, so a bit less than 2k a year depreciation.

On the other hand, I've lost a lot more on our other car - an mx-5.

You can't compare a vehicle like a Landcruiser with a normal passenger car.

The Discovery 3/4 also depreciates slowly after the big initial drop. Probably due to the fact many people use them as business tools rather than as a car.

As you rightly say some cars that are made/sold in tiny amounts such as a LandCruiser will Buck the trend.

As will buying a car at auction.

But I don't think the OP is intending to get a Landcruiser or buy a ex lease car at auction.

More likely something more akin to automotive bling.

forgotmyname

MEM62 wrote: »

marlot wrote: »

I bought a 4,000 mile 11 month old landcruiser in March 2008 for £24k.

Nearly eight years later, and with 57,000 miles it's still worth about £10k, so a bit less than 2k a year depreciation.

Over 8 years that may be the case but I bet it didn't loose value at a steady rate. How much did it loose in the first two or three years? More than 2K a year I reckon.

Your missing the point of what was the vehicle was worth after just 2 years. I bet it was a lot less than £20k.

Depreciation slows as the vehicle ages. I bought a 5 year old car and sold it when it was 10 yearss old and only lost £1200 if you only take in the purchase price. £240 a year depreciation.
But in the first 5 years it dropped at least £16k.

securityguy

"Depreciation slows as the vehicle ages"

And you reach a point where you can write the vehicle off to zero and run it into the ground. I've currently got a ten year old Skoda that I paid four grand for five years ago, which is for practical purposes in perfect condition (just service items, everything works, drives like new). It's close to worthless, and that four grand has all disappeared over five years' ownership. So all it's now costing me is a service per year, plus the occasional larger job like a radiator or brake discs or (I suspect next year) rear shocks.

My gut feel is that a lot of people inherit their attitude to the age and mileage of cars from their parents, and that means the past in which cars rotted in less than ten years and 100k was a massive, bag of nails, mileage. As cars now don't rot and engines routinely do 200k, the economics are different.

eamon

I concur. The 1st owner of my car took a massive hit circa £10k over the 3 years that he owned the car.

vansboy

Cars are MUCH better value these days and all the deals and packages make them even more 'affordable', so it would be not the easiest thing to get depriciation predictions right.

And buying the right car helps.

When I bought a 1990 Jaguar for myself, when I had my own motor business, so it was trade rather than retail deal, so saving around £3000 potential dealer mark up, back in 1993 it cost around £9000. New it was nearer £50k. I sold it five years later for £3500.

At the same time, another garage owner bought a 1973 Porsche for himself, similar money, to my Jaguar He sold it a little after me, for £8000.

We both had some above average spends to keep them as good as they could be and I'd prefer to ride in the Jaguar than the Porsche, but he was the depreciation winner.

VB

almillar

Best loan for £20,000 on MSE today is Sainsbury's for Nectar card owners. 3.4% *representative* APR. Let's say you do get that rate.
You'll be paying back £585 per month as you say for THREE years, and you'll pay back £21,065.
Here's an X6 for £24k. 2010. 2 years newer is £40k. It's done most of its depreciation. How much more will it do in the next 2 years? Nobody knows, but it won't be another 20k.I doubt it'll be as little as £2k per year though. Plus maintenance!
http://www.usedcarsni.com/search_results.php?search_type=1&make=2&model=16855076&keywords=&price_from=0&age_from=0&mileage_to=0&trans_type=0&price_to=0&age_to=0&user_type=0&fuel_type=0&distance_enabled=0&distance_miles=50&distance_postcode=&search.x=69&search.y=11&search=1

MARKMAKAVELI

Yeah so I'm sober now and see the massive holes in my idea!

Stay tuned for more gibberish from yours truly!