Most cost effective way of avoiding excessive depreciation

Smellyonion

I originally owned a 2005 mini cooper s which needed everything doing to it. It was also expensive to run, insure etc.

I decided to go for the cheapest brand-new car that I could find based on the monthly PCP deal. It was a c1 at 120 a month with no deposit, no road tax and around 57 mpg. it was 3 years long with a balloon payment of 4.7k at the end. My contract was for 10k miles per anum, I calculated that I would far exceed that with the new job. I also noticed a dent (on the door bigger than the limit for wear and tear) and scrapes on the bumper -
none of which were my doing .

I decided last month, around 1.5 years in to request a settlement figure and not have to pay any additional fees to hand the car back. I borrowed 8k at 3% from Tesco to purchase the car at 6.4k. I borrowed more than I needed to get the 3% rate.

Anyhow, I am now in a position where I have another job that involves 60 miles return everyday. I am not happy using the c1 for my journeys.

I was hopefully looking for an economical diesel motorway cruiser like a Mazda 3 or 3 series. The c1 is worth (according to we buy any car 5.5k) that leaves almost a 900 gap and I am obviously not too happy to take the hit. It's a 66 plate 1.2 flair 23k miles.

What would you do or did I make a poor judgement in buying the car?

jk0

Depends if you go into London.


There, any diesel pre 2015 will cost you £12 a day from 2020. In that case you might be better keeping the c1.

forgotmyname

Mazda 3 = efficient? Online figures suggest that it give the same MPG as my Mondeo estate.

Why wont a C1 do a 30 mile journey? I used top commute further than that in a 1000cc classic mini.

peter_the_piper

As the C1 is a zero tax and the Mazda is about £145 that also needs to be taken into account.

Nasqueron

Mazda 3 diesel 2.2 is £20 a year VED and does about 50mpg average with mix of motorway and the odd shopping run. I get 70+ on motorways driving sensibly.


Depreciation is only an issue if you intent to sell the car, otherwise it's meaningless - if you bought a new or nearly new one and ran it for 10+ years then the fact it's worth 2-3 grand at the end is irrelevant as you had good use out of it. If you intend to sell after 3 years then it is a serious issue so get a nearly new or one that was registered but not sold etc to avoid the drop in the value from owning new.

Mercdriver

As Above +1. Motoring websites bang on about depreciation all the time and include it in costs. Sounds sensible but is only really relevant if you are changing your car every 3 - 5 years. I wonder whether they are pitching for ads from car companies...hmmm

foxy-stoat

If you dont like the C1 then either hand it back (if you have paid 50% of the total purchase price) or take out a loan, clear the PCP and sell on the open market - for more than We Buy Cars undervalue and buy a car you want.

I would buy a car for £5000-£6000 using a bank loan. I dont think you made a bad choice in buying the car unless you knew you would exceed the mileage when you took out the agreement.

Mercdriver

foxy-stoat wrote: »

If you dont like the C1 then either hand it back (if you have paid 50% of the total purchase price) or take out a loan, clear the PCP and sell on the open market - for more than We Buy Cars undervalue and buy a car you want.

I would buy a car for £5000-£6000 using a bank loan. I dont think you made a bad choice in buying the car unless you knew you would exceed the mileage when you took out the agreement.

A clarification: once 50% of the total amount on the agreement has been paid.

Smellyonion

Thank you for all your help.

If I knew what I knew when I took out the agreement, I would have purchased a 2 year old c1 for 5k rather than a brand new one for 8k. The 120 pm with no deposit was very enticing.

Autotrader values a good private sale at 6.2k. almost the exact cost of what I paid to clear the finance . It would be great to sell it at that. To purchase a new one, I would like the money before hand but use it every day for work etc.


How do you guys go about avoiding the interim of selling and being car less?

Smellyonion

I suggested a Mazda 3 because they are affordable with good acceleration for the economy achieved. Not as good as a 320d but not as expensive either.

Not going into London. You're right, I could stick with the c1. It's more a comfort thing that anything. It feels like a boat at 65 mpg +.

System

I'd hardly call a car like a Mazda 3 a motorway car. In my mind motorway cars are more Mondeo, Insignia, Mazda 6, BMW 5 series and the like, not a hatchback like an Astra, Mazda 3, Focus.

Mercdriver wrote: »

As Above +1. Motoring websites bang on about depreciation all the time and include it in costs. Sounds sensible but is only really relevant if you are changing your car every 3 - 5 years.

No, it is always relevant unless you're practising bangernomics where the car has already hit the bottom value other than scrap.