Used car price increase

havingaball74

I'm trying to work out financially and practically whether it is better to buy an old car for a few thousand pounds and then sell it and buy newer when and if the prices correct themselves or to just bite the bullet and go for a newer more expensive one and take the hit when prices drop. I definitely need a car as I've got to get to work. What would you do?

Alanp

Does it have to be a Honda jazz? For 11k you could get a fairly new Kia picanto ( 7 year warranty), or a Hyundai i10 ( 5 year warranty) , both will last a long time if maintained correctly, 

Herzlos

havingaball74 said:

What would you do?

I'd look at leases instead, and see if I can get a decent deal on 3 years fixed price motoring.

My current plan is to sell my car (worth almost what I paid for it 3 years ago) and move onto a lease until prices go back to normal.

StevieD54

This is my current dilemma.  I’ve got a 09 Megane with 69k on the clock and want something new/newer.  Recently looked at car leasing after seeing the Zen advert on tv.  Never considered it before, I have always bought used cars for cash.  But current second hand prices are making me think again.  I can drive a new £28k car on a 3 or 4 year lease, but have no car at the end of it though, obviously.  The used market is so volatile atm, especially with EV’s coming in.  Is leasing the way to go?

JJ_Egan

Key here is as you say no residual value at the end .But you can roll on to another lease .

jimjames

havingaball74 said:

I'm trying to work out financially and practically whether it is better to buy an old car for a few thousand pounds and then sell it and buy newer when and if the prices correct themselves or to just bite the bullet and go for a newer more expensive one and take the hit when prices drop. I definitely need a car as I've got to get to work. What would you do?

Financially probably, but all depends on getting the right car. I've just had another year of very low cost motoring. Last year cost me £278 in total for all costs (servicing/MOT etc) other than fuel. No depreciation and car is probably worth marginally more at end of year than the start despite being 20 years old.

havingaball74

How does depreciation work?
When the market readjusts a stop-gap car could be worth less

So a car bought now for £3000, could be worth 20% less so I lose £600.
A car bought for £10000 could be worth 20% less so I lose £2000. Is that right?
Wouldn't the £3000 car sell for very little in a year's time anyway?

motorguy

havingaball74 said:

How does depreciation work?
When the market readjusts a stop-gap car could be worth less

So a car bought now for £3000, could be worth 20% less so I lose £600.
A car bought for £10000 could be worth 20% less so I lose £2000. Is that right?
Wouldn't the £3000 car sell for very little in a year's time anyway?

Typically its proportionately less.  And there is the argument that a cheaper car might hold its value better given we're going in to a difficult year with rising prices too.

If a £10K car drops 20% then you lose £2,000

If the £3K car drops 20% then you lose £600.  At that point you buy the £10K for £8K so you've saved yourself £1,400.

Thats the theory anyway...  Not sure how much of that would hold true in practice.

rigolith

havingaball74 said:

I love Jazzes so I'm tempted by the more expensive one. Does £11k seem alot for a 2017 Honda Jazz with 16,000 miles on the clock?
If so, it's back to the drawing board with other makes and I'm assuming they'll be overpriced too in the current market

It's completely insane, but that's used car prices at the moment. Nothing is sensibly priced.

If you buy now it will deprecate like crazy as prices get back to normal. If you need a car though... The only alternative is check some PCP or lease deals, some are about the same as the depreciation will be so you might as well have a new car.

getmore4less

Now might be a good time to try out an electric on lease if the use cases fit.