I need your opinion

[Deleted User]

Supersonos said:

Petriix said:

We're doing it. MG are giving £4k on top of the trade in value for any ice vehicle against a new MG5. Range is good and it's really practical. There's nothing else out there which comes close in terms of value. The 7 year warranty is pretty reassuring.

It's adding £100 per month to our mortgage. It will save us about £75.

The depreciation on an MG will be huge, so that "great value" is not what it seems.  And, of course it depends on how long you have left on your mortgage, but that can be quite an expensive way to borrow for something like a car.

Depreciation isn't a cost or related to value of the vehicle unless you intend to sell the car before the end of the useful life and hope to recoup some cash. I bought a new car 6 years ago, still awaiting the bill from the car company for "depreciation" which people claim is the biggest cost of a car. When the car is retired at some point in the future when it's been run to the point of not being economic to repair, I will still be waiting for the bill.

Tesla as an example, last a predicted 1800-3000 full charge cycles before they drop to below 80% capacity. If we took their range as 400 miles and the average mileage of a UK driver (7000-8000 miles) that's 20 charges a year, be generous and say it's 5x as much, 100 charges a year - that is still 18-30 years before that battery drops below 80% (and that still means a useful range of over 300 miles.

One of the first Tesla S owners has a story here - done 450,000 miles in 4 years and on the third battery - first lasted 194,237 miles, second 129,807 which is over 15 years of average UK driver use. Tesla reckon they will shortly launch a battery that should last close to 1,000,000 through charge cycles but even so, real world data shows little degradation over the average Tesla, most are over 90% even at 250,000 which is the average vehicle life

AdrianC

Deleted_User said:

Supersonos said:

The depreciation on an MG will be huge, so that "great value" is not what it seems.

Depreciation isn't a cost or related to value of the vehicle unless you intend to sell the car before the end of the useful life and hope to recoup some cash. I bought a new car 6 years ago, still awaiting the bill from the car company for "depreciation" which people claim is the biggest cost of a car. When the car is retired at some point in the future when it's been run to the point of not being economic to repair, I will still be waiting for the bill.

That's not how depreciation works...

Depreciation is the amount you paid, minus the current value of the asset.
You buy a £25k new car.
In two years, it is worth £10k or £17k. But, of course, you do not crystallise that depreciation if you continue to keep the car.
In four years, it's worth £5k or £10k. But, of course, you still do not, if you continue.
In six years, it's worth £3k or £8k. But...
In ten years, it's worth £500 or £5k. But...

Of course, that IF is not always in your control. You may intend to drive it until it is beyond economic repair - the average age of a car being scrapped is currently about 14yrs. But that intention is one inattentive idiot away from being taken away from you.

And, of course, £3k-worth of car is far more likely to be written off than £8k-worth. Would you buy it back with the Cat N marker, and a £4k repair bill?

Of course, that's always assuming that SAIC haven't disappeared from the country, leaving patchy parts and technical support. Sales figures are small - albeit growing. 14k cars for the entire brand, all models, across the whole of Europe in 2019, pretty much 100% in the UK. Yes, this year is already better... they did that to the end of Q3. But that's still only about half of one good month for Nissan's Qashqai sales alone.

Grumpy_chap

Deleted_User said:

I bought a new car 6 years ago, still awaiting the bill from the car company for "depreciation" which people claim is the biggest cost of a car. When the car is retired at some point in the future when it's been run to the point of not being economic to repair, I will still be waiting for the bill.

You had and paid that bill when you collected the car.
If you stick with the plan of running the car into the ground, then the residual (scrap) value is pretty much the same £200 for any car.
If you bought a typical, say £15k car, brand new, you incur £1k/year if considered as straight line depreciation before scrapping the car at 15 yo.
If you bought a more exotic, say £200k car, brand new, but be generous that you make that last longer, so scrap it at 20 yo, straight line depreciation £10k/year.
Obviously, real depreciation is more complex than that but, ultimately, whatever the cost of the new car is, the depreciation over the life of the car is 100% less £200 scrap value.  The lowest "whole-life" depreciation comes from a budget car at £8k brand new, scrapped for £200 at end-of-life, 15 yo, only 97.5% loss to depreciation.

Petriix

The scrap value for an EV with a 52.5kWh battery isn't going to be below £3.5k unless there are some incredible technological breakthroughs in the near future. The net cost of the MG5 (including the hypothetical depreciation) will average £150 per month over the first 4 years compared to running my old diesel car, and reducing to £0 (or below) from year 4 onwards.

That cost is a reasonable price to pay for the comfort of switching to a new car. That's before you consider the real benefits of reducing Co2 emissions and (aside from some tyre and much reduced brake dust) eliminating particulate emissions. The smooth, vibration free, easy driving; and the rapid (immediate and constant) acceleration are added bonuses.

The low running and maintenance costs make the net expense equivalent to buying an ice vehicle costing ~ £1000 less per year of ownership. I'm not totally sure what range of alternative vehicle I could have bought for around £15k (assuming I keep the MG for 8 years) but nothing that would appeal to me.

Ultimately though, it's about being able to wake up on a sunny spring morning to my daughter excitedly telling me that the car is (albeit slowly) charging from our own solar panels. I know it's not a silver bullet but, as part of our overall attempts to reduce our impact on the planet, it feels like we're doing *something*.

Supersonos

Petriix said:

Ultimately though, it's about being able to wake up on a sunny spring morning to my daughter excitedly telling me that the car is (albeit slowly) charging from our own solar panels. I know it's not a silver bullet but, as part of our overall attempts to reduce our impact on the planet, it feels like we're doing *something*.

Reproducing is by far the worst thing for the environment.  I have made the decision to not have children in order to ensure my impact on the planet doesn't continue beyond my death.

Ditzy_Mitzy

Grumpy_chap said:

Deleted_User said:

I bought a new car 6 years ago, still awaiting the bill from the car company for "depreciation" which people claim is the biggest cost of a car. When the car is retired at some point in the future when it's been run to the point of not being economic to repair, I will still be waiting for the bill.

You had and paid that bill when you collected the car.
If you stick with the plan of running the car into the ground, then the residual (scrap) value is pretty much the same £200 for any car.
If you bought a typical, say £15k car, brand new, you incur £1k/year if considered as straight line depreciation before scrapping the car at 15 yo.
If you bought a more exotic, say £200k car, brand new, but be generous that you make that last longer, so scrap it at 20 yo, straight line depreciation £10k/year.
Obviously, real depreciation is more complex than that but, ultimately, whatever the cost of the new car is, the depreciation over the life of the car is 100% less £200 scrap value.  The lowest "whole-life" depreciation comes from a budget car at £8k brand new, scrapped for £200 at end-of-life, 15 yo, only 97.5% loss to depreciation.

Not necessarily, if one buys wisely.  20 years ago, according to a little bit of research, £200,000 would have bought a brand new Lamborghini Diablo.  Such a car is, in many cases, still worth about £200,000.  The right ones are worth even more!  

Supersonos

Ditzy_Mitzy said:

Grumpy_chap said:

Deleted_User said:

I bought a new car 6 years ago, still awaiting the bill from the car company for "depreciation" which people claim is the biggest cost of a car. When the car is retired at some point in the future when it's been run to the point of not being economic to repair, I will still be waiting for the bill.

You had and paid that bill when you collected the car.
If you stick with the plan of running the car into the ground, then the residual (scrap) value is pretty much the same £200 for any car.
If you bought a typical, say £15k car, brand new, you incur £1k/year if considered as straight line depreciation before scrapping the car at 15 yo.
If you bought a more exotic, say £200k car, brand new, but be generous that you make that last longer, so scrap it at 20 yo, straight line depreciation £10k/year.
Obviously, real depreciation is more complex than that but, ultimately, whatever the cost of the new car is, the depreciation over the life of the car is 100% less £200 scrap value.  The lowest "whole-life" depreciation comes from a budget car at £8k brand new, scrapped for £200 at end-of-life, 15 yo, only 97.5% loss to depreciation.

Not necessarily, if one buys wisely.  20 years ago, according to a little bit of research, £200,000 would have bought a brand new Lamborghini Diablo.  Such a car is, in many cases, still worth about £200,000.  The right ones are worth even more!  

That is not buying wisely - that would be a terrible investment.  Factor in inflation and you've actually lost around £140,000.  Add to that the cost of maintenace, insurance, storage etc and you'd probably be looking at another £100,000+.

Today, you'd have to sell the car for at least £440,000 just to break even.

Had that £200k gone into property you'd have a property worth something like £700-800k now, and that's not including the many thousands of pounds in rent you would have earned over the 20yrs.

Grumpy_chap

Petriix said:

The net cost of the MG5 (including the hypothetical depreciation) will average £150 per month over the first 4 years compared to running my old diesel car, and reducing to £0 (or below) from year 4 onwards.

There is nothing hypothetical about depreciation.  It is very real and very large.

I don't understand the net cost you are referring to.  Is this built around the £25k investment will save £x per month in fuel?

AdrianC

Grumpy_chap said:

Petriix said:

The net cost of the MG5 (including the hypothetical depreciation) will average £150 per month over the first 4 years compared to running my old diesel car, and reducing to £0 (or below) from year 4 onwards.

There is nothing hypothetical about depreciation.  It is very real and very large.

I don't understand the net cost you are referring to.  Is this built around the £25k investment will save £x per month in fuel?

I can only presume that he means that running the brand new car for the first four years will cost £7,200 more than his current one, while running it thereafter will cost the same.

Grumpy_chap

AdrianC said:

I can only presume that he means that running the brand new car for the first four years will cost £7,200 more than his current one, while running it thereafter will cost the same.

That could be an interesting thought come October, and I am sure the marketing genii are already planning.  With the £12.50 daily ULEZ covering largely residential areas, scrappage and monthlies structured to have a new car effectively for "free"...