How to beat depreciation

SharkMoney

Over the last 15 years I have tried bought various cars, but always getting more expensive each time.

My motoring days started with a £500 car that I sold on a year later for £400.
I then had a couple of £2k cars, kept them a couple of years and got around £800 back.
I bought a £6000 car which was just over a year old, kept that for 3 years and got around £2250. Call it £104 a month.

More recently, I had a brand new car for £18k which cost me £237 per month (no deposit) for 48 months
My current car was 6 months old and cost £20,000 and i am looking at depreciation of around £184 a month having had the car valued at 31 months.

I am looking at changing cars due to change of circumstance and thought about spending £20k again but on a 3yr old car instead seeing as apparently cars lose most their value in yrs 1-3. However if you look into GFMV or estimate the value yourself of the car at 6 years old, you’re still talking losing 50% of its value so in excess of £250pm lose or thereabouts. I have based this on dealers own projections using PCP and finding the same car 6 years old and running a HPI calculator against it.

Is the answer here to look at even older cars or spend less e.g. 10k and maybe depreciate to 5k after 3 years? 

DUTR

Do you want to drive it?

DrEskimo

Go EV. Depreciation levels are quite incredible at the moment, although admittedly this has been largely due to the increases in RRP and the reduction of the PICG, which is difficult to predict going forward.

My own experience so far is a £14,500 used EV that 21months later is still worth around £14,000....Couple that with £0.01/mile 'fuel' costs and you have a winner!

SharkMoney

DrEskimo said:

Go EV. Depreciation levels are quite incredible at the moment, although admittedly this has been largely due to the increases in RRP and the reduction of the PICG, which is difficult to predict going forward.

My own experience so far is a £14,500 used EV that 21months later is still worth around £14,000....Couple that with £0.01/mile 'fuel' costs and you have a winner!

Interesting, i have not looked at EVs at all, just assuming they are too expensive (Tesla), low range etc.
What EV did you buy?

Herzlos

Any car is going to lose about half it's value every 3 years. More expensive cars lose value faster in absolute terms but maybe not relative terms.
You can minimize depreciation to an extent by holding onto the car for longer, or just buy older, cheaper cars.

Mickey666

Buy a classic car instead.  Always a bit of a gamble, but at least there's the possibility of its value increasing.

I have a 2005 Land Rover Defender 90 TD5 (the last of the 'real' Land Rover engines before they started using a Ford Transit engine).  It's worth about the same today as I paid for it, probably more if I cleaned it

FWIW - I also have a 1972 tractor that has become quite popular since I bought it 12 years ago and is now worth about 3x what I paid for it.  Not recommended for comfort though

DrEskimo

SharkMoney said:

DrEskimo said:

Go EV. Depreciation levels are quite incredible at the moment, although admittedly this has been largely due to the increases in RRP and the reduction of the PICG, which is difficult to predict going forward.

My own experience so far is a £14,500 used EV that 21months later is still worth around £14,000....Couple that with £0.01/mile 'fuel' costs and you have a winner!

Interesting, i have not looked at EVs at all, just assuming they are too expensive (Tesla), low range etc.
What EV did you buy?

I have a Renault Zoe 41kWh and I own the battery outright (these models comes either at a lower purchase price and you lease the battery and pay monthly, or you can pay a bit more and own the battery outright, which comes with a 8yr/100k warranty).

I've averaged 3.8miles per kWh, so given it's a 41kWh battery I get on average ~150miles. This ranges from ~130miles when temps <0degrees in the winter to 170miles in the summer when temps are >20degrees.

foxy-stoat

The less you spend = the less you lose.  Why spend £20,000 on a car if your only going to keep it for a couple of years and selling it for £10,000.

[Deleted User]

My car is worth around 6-7k looking at Glass estimates, it's "lost" around 2/3 of the value. However, I beat depreciation as I'm not a plate snob and don't care it's 6 years old, I won't care it's 10 years old in 4 years, I am not selling the car so there is nothing to worry about, when it gets to a replacement in another x years it can be a deposit/trade-in/WBAC thing for a bit of cash after I've had 6+x years use out of it. Why worry about depreciation and keeping up with the Jones and just buy a car, look after it and replace it when you have to?

caprikid1

Don't stress over depreciation you need to look at the full cost per mile over your ownership, IE repairs , maintenance , insurance etc.

Biggus_Dickus

A lot depends on the ‘image’ you wish to convey, OP;...whether you buy into it or not, ‘image’ is important in some professions and certain walks of life.