Thinking for car change

[Deleted User]

Petriix said:

iwb100 said:

Can I ask what the equity figure is based on? And why an old diesel has zero equity? That part is messing with my mind. 

I should have labelled it 'increase in equity'. It's the change in difference between what the car is worth and what I still owe on that part of the mortgage. 

In my example the old diesel was effectively worthless - they scrapped it when I traded it in, but would probably have some value in today's inflated market. 

And that's where your accounting goes all wrong - it isn't an income when you have a net increase in equity. Equity is the balance of all your assets minus all your liabilities. You are saying that because you are reducing your liabilities by £100 per month and your equity is increasing therefore by £100 per month, that offsets the cost of having a car by £100 per month - but it doesn't.

If you were say to inherit £25k and pay off all the mortgage debt taken out for your car, that doesn't suddenly reduce the total cost of owning and running the car by £25k yet you seem to think it does.

The whole mortgage thing is irrelevant, just think in best case terms that the OP has £100k sat in the bank doing nowt. If they buy a £25k MG5 it doesn't mean it costs nothing, it costs the depreciation .... and on that note....

Petriix said:

While you call it a 'gross miscalculation' to factor in the residual value of the EV, I'd suggest it's wildly inaccurate to completely ignore it. Of course you don't get the equity in your pocket each month, but you do receive it all as a lump sum on the day you sell. The OP could drive their £15k Zoe for a year, then likely sell it for the same or more, having only actually cost them some interest as all of the capital repayments would come back to them. 

Do you really think that a £15k Zoe will lose significantly more value than a £5k Fiesta over say 5 years? There aren't any EVs under 7 years old for < £7,500 on Autotrader. Demand is high and will only get higher in the medium term. Now is a great time to buy.

All you need to do to include the residual value of the EV is include a good estimate of the depreciation into the balance sheet, you don't need to add the equity as actual income in accounting terms. If the depreciation is zero then just include that.

I know there is a bubble of increased used car prices at the moment but that bubble will burst once supply chains are back to normality - potentially causing a significant crash in 2nd hand prices. The old saying "Past performance is not indicative of future results" applies right now, we are in exceptional times, a car will not be worth more in 12 months if the new car market gets back to normal.

£15k might get you anything from 2017 - 2019 Zoe right now on Autotrader but the car does lose value (new ones are £26k to £33k) , if the OP keeps it 5 years then Autotrader suggest £7k to £10k for 2012-2014 Zoe. Clearly they do depreciate in line with norms.

And now is not a great time to buy a used car but it is a good time to sell one.

Petriix said:

And you're completely barking up the wrong tree suggesting that an EV tariff might cost you more money than the standard variable rate. All you have to do is switch 30% of your usage to the off peak window and you're saving money. It's saving me hundreds because I was able to fix in January at 5p/24p while no other fix made sense. That's another massive benefit of EV ownership. 

Octopus EV is 12:30am to 4:30am for the off peak window - Personally I can't move my lights, fridge, oven, TV, computers to that time. Spinning a washing machine at the time is just anti social. Just the dishwasher and that is it. All my heating is gas, I really can't see how 30% could be moved to off peak. But again you've based your calculation on your specific electricity consumption, circumstances and a deal that is no longer available so again, great if it works for you but what about the OP?

It just feels very "me me me" in your responses on this thread without considering the OP's circumstances.

So if they buy a £15k Zoe + £1k charger installation and keep it for 5 years, spend £400 on elec and it is worth £8.5k looking at average on Autotrader then it has cost £7.9k

Or spend £15k on a 2020 1.0L Ecoboost + £3k fuel and find that they are selling for about £10k 5yrs later according to Autotrader and therefore it has cost £8k.

It is about the same either way.

Add in the fact that the Zoe is an awful looking car with poor reviews, the latest model given zero on the NCAP safety test as well and your beloved MG5 got 3 stars.

I'm not against EV at all, I looked very hard into whether it would work for me when I recently bought a 2nd hand car with £10k budget and it was impossible to save any money with EV - I'd challenge you to find me a better deal with EV than I have with a 2.0 turbo diesel that does 43 mpg without trying to be eco, oh and it has 7 seats so avoids using 2 cars when I fill it up with people.

Ibrahim5

I remember thinking about used motorhomes. 20 year old ones were selling for £20K. Great for the seller who paid £20K 20 years ago and now got their money back. The buyer though would probably get enormous repair bills. If you have paid £20K you don't want to scrap the vehicle so just keep paying more big bills. Petriix has bought a new EV without much risk. He can only say it's good value if he can pass it on without much depreciation. The buyer of old EVs is taking on a massive risk. They will have to pay the repair bills. I don't think anyone really knows the cost of those repair bills but could be £000s. Much less risk keeping current car. It's the owner of older EVs who will be left stranded without power as the batteries deteriorate. Could imagine people buying them, finding hardly any range left, massive repair bill, quickly try to sell on to another unsuspecting buyer taken in by EV hype.

Herzlos

It's almost like you have no idea what you are talking about.

Motorhome prices are completely nuts because of Covid induced staycations; people can't go abroad and are stuck at home so buy something to do up and holiday in.

There's absolutely no parallel between a 20 year old motorhome and a 3 or 4 year old EV.  The motorhome is essentially already scrap and will cost more than it's worth to rebuild from the rust up. A 3 year old EV will still have most of it's range (like 95% upwards) and will still have much reduced running costs compared to a similar ICE.

The reduced running costs and things like ULEZ will keep EV residuals high.

I'd buy a 3 year old EV in a heartbeat, but the one I want has only just launched so I've got 2 years to wait. 

Herzlos

The NCAP thing is a bit of a red herring IMHO as the tests have just gotten a lot stricter and put a lot of weighting on active systems, which is making cars look a lot worse safety wise since many new models have lost stars compared to the previous.

Dacia in particular is doing pretty badly with the new ratings due to lack of stuff like lane departure and collision detection warnings.

Ibrahim5

The budget is £5-10k which means getting a much older EV. They are the ones that will have battery issues. So you could end up paying the same again for a new battery. Much less risk with the tried and tested petrol they already have.

[Deleted User]

Herzlos said:

The NCAP thing is a bit of a red herring IMHO as the tests have just gotten a lot stricter and put a lot of weighting on active systems, which is making cars look a lot worse safety wise since many new models have lost stars compared to the previous.

Dacia in particular is doing pretty badly with the new ratings due to lack of stuff like lane departure and collision detection warnings.

NCAP has always progressed since it was introduced 25 years ago. At first nobody achieved a 5 star rating, in fact manufacturers said it was impossible. Then ironically it was the Renault Laguna that first achieved 5 stars 4 years after NCAP was introduced and now they are making 0 star cars.

It isn't just about active systems - the Zoe has removed the head protection on the front side airbags and doesn't even bother with rear passenger airbags for your children. Watch the side impact crash test, the head of the dummy takes the side window out and on the pole test the head directly strikes the pole, that is one nasty car for safety.

As for the active features, these avoid a crash in the first place which is far superior to surviving an impact due to seat belts and airbags. They also avoid injuring vulnerable road users such as pedestrians. 

Features like lane departure and collision detection aren't new either, I have them as optional extras on my 8 year old car, along with ESC as standard, blind spot radar, speed limiter, reverse camera, fatigue warnings etc - they've been around long enough now to be standard and more advanced than mine yet the Zoe has none of them.

And I haven't got some premium over the top marque, I have a Ford just like the OP, and going back on track of this thread, I still believe an upgraded Ford Fiesta is the better choice than a Zoe for both cost and safety.

ontheroad1970

Ibrahim5 said:

I remember thinking about used motorhomes. 20 year old ones were selling for £20K. Great for the seller who paid £20K 20 years ago and now got their money back. The buyer though would probably get enormous repair bills. If you have paid £20K you don't want to scrap the vehicle so just keep paying more big bills. Petriix has bought a new EV without much risk. He can only say it's good value if he can pass it on without much depreciation. The buyer of old EVs is taking on a massive risk. They will have to pay the repair bills. I don't think anyone really knows the cost of those repair bills but could be £000s. Much less risk keeping current car. It's the owner of older EVs who will be left stranded without power as the batteries deteriorate. Could imagine people buying them, finding hardly any range left, massive repair bill, quickly try to sell on to another unsuspecting buyer taken in by EV hype.

Inflation doesn't mean anything to you, then.  £20k 20 years ago isn't £20k now.  It's closer to £35k.  Also as stated, there are other pressures on the prices of motorhomes. Even less than perfect conversions are commanding high prices because of travel restrictions.

Ergates

On the resuing old EV battery front - one thing that is worth noting:

If you look at having solar panels with a battery store, then most of that time that will be a 5KWh battery.  A "standard" EV battery is in the 40-50WKh range.

So, even when it's dropped to 50% of it's capacity, an old EV battery would still have significant value for home energy storage.

Ibrahim5

The point is that these second hand markets are toxic to the naive. Some people will pay £20k for a motorhome and buy a load of rubbish. EVs tend to have 8 year battery warranties. 8 year old EVs seem to go for about £10k. If the battery is dead you may have a £10k bill to fix it. A knowledgeable EV buyer may offload his EV at the right time and benefits from high residuals. The naive buyer might buy a 8 year old and need to pay another £10k to keep it on the road.

Grumpy_chap

Ergates said:

On the resuing old EV battery front - one thing that is worth noting:

If you look at having solar panels with a battery store, then most of that time that will be a 5KWh battery.  A "standard" EV battery is in the 40-50WKh range.

So, even when it's dropped to 50% of it's capacity, an old EV battery would still have significant value for home energy storage.

Yes and no.
It would be possible to treat a lower cost EV as a home battery with a free car added on.  Except, V2G or V2H is not really possible, so the battery needs to be taken from the car and made safe plus configured for use as a stand-alone battery.  Even without that, most people don't have the space to keep a spare EV whereas a battery design as home storage for solar is more appropriately arranged.