"Best" Way of Car Ownership

scaredofdebt

OK so I know this is a very ambiguous question and everyone will have their own ideas but interested to know as it might help me decide on my next car.

I have owned ~20 cars in my lifetime, been driving for about 35 years now and I have tried every option - bangernomics, buying nearly new, buying new, leasing etc.

The criteria I am interested in is total cost of ownership including depreciation, reliability, suitability etc.

Now obviously bangernomics should be cheapest but to be honest I cannot be bothered with the hassle, don't have the knowledge any more and I need a reliable car.  The problem I find with older cars is they can suddenly go wrong and cost a lot to fix and be off the road for a while which is really inconvenient.

I'm currently leasing an EV, so great cost per mile (fuel) but I'm paying the thick end of £300 a month (no deposit) over 4 years and will have nothing to show for it at the end.  But the car is nice to drive, if a bit boring, very reliable and it is under warranty etc etc.

My thinking is if I borrow an equivalent amount that the lease is costing (£10k over 4 years is about £300 a month) can I get something nearly new with a warranty and then I've got most of the benefits with something to show for it at the end, ie a car I can sell/px still worth some money.

Would be interested to hear other ideas and experiences.

bluelad1927

What do you consider nearly new. There won't be much available nearly new with a warranty for 10k

fatbelly

You can get a 2 year old Dacia Sandero for that money

https://www.autotrader.co.uk/car-details/202309071677098

jimjames

scaredofdebt said:

Now obviously bangernomics should be cheapest but to be honest I cannot be bothered with the hassle, don't have the knowledge any more and I need a reliable car.  The problem I find with older cars is they can suddenly go wrong and cost a lot to fix and be off the road for a while which is really inconvenient.

Old cars don't need to be unreliable. My 22 year old car is currently doing 100 mile daily commutes as well as 500 mile weekend trips without issue. My 15 year old car did 2000 miles across Europe in the summer. If well maintained they can keep going well.

valueman1

Depreciation tends to the biggest cost of all, so worth focussing on that in the total cost equation. With EVs there are a lot of unknowns, cost of battery replacement, residual value, risk that a superior form of battery could make your car obsolete etc. I think insurance can be high.

fatbelly

300 a month over 48 months is 14400. Do you have any savings?

WellKnownSid

If you're in Scotland, go for a 0% used EV loan which ups your budget to around £15-18k and gives a whole load of choice under a year old.

If you're not in Scotland, try to find a dealer offering a low rate or 0% deal.  These offers will likely grow - especially as manufacturers need to sell more EVs next year.

WellKnownSid

valueman1 said:

Depreciation tends to the biggest cost of all, so worth focussing on that in the total cost equation. With EVs there are a lot of unknowns, cost of battery replacement, residual value, risk that a superior form of battery could make your car obsolete etc. I think insurance can be high.

There are plenty of EVs that have been around 10+ years.  A one year old EV may have already depreciated by 60% but will probably have 7+ years of battery warranty left.  Unlike ICEs which depreciate to nothing, EV still have a residual value which never really goes away unless they are broken.

I'm not convinced by the obsolescence argument.  Superior battery technology has been touted for some time - but isn't here yet.  If this miracle new battery ever appeared and was so cheap and instantly available as to render existing cars obsolete overnight, then the owners of said cars would just swap their batteries.  The reality is that cars are pretty ephemeral anyway - although I get why the FOBO argument might hold some people back.  I think Toyota has championed that approach with their hydrogen claims - 'don't buy now, hydrogen is coming...'

Although car insurance never changed much this year for us, I have seen plenty of quotes in the press that some guy swapped from a 1 litre group 3 Fiesta to a group 50 Tesla and ended up paying thousands more for insurance.  Never saw that coming, such a shock and surprise.

Then I saw an article on the "hidden costs of EVs" where a bloke was complaining about the rear tyres on his Porsche supercar cost him £700 every 10,000 miles.  First world problems.

Goudy

It sounds like you have come to the point where you have realised there is more predictable costs and benefits to running a new car than perhaps the more unpredictable costs and uncertainly of an older one.

That obviously comes with a cost of it's own.
In the case of leasing, you haven't anything at the end.
In the case of buying new, the cost of depreciation and it's maybe this depreciation that you want to work on but still keep the benefits of a new car.

That's a tall order, but it's not impossible to make a big impact on that cost.

It's unlikely you'll achieve this in a straight transaction of buying a new/nearly new car but over a period of ownership, you might cash in on some benefits that reduce the initial exposure to the expected depreciation.

First off is can you get a discount on the new/nearly new car?  (has someone already taken a large slice on it already?)
I have bought my last few new cars on various discounts schemes that have generally given me on average around 20% off the invoice price due to working for the NHS, but there are other schemes for different professions, membership to various organisations etc.
There were deals for members of British Cycling as they were sponsored by a manufacturer and that only cost a few quid to join, not sure if they still do that though.

You often have to jump through a few hoops to get these, but this has tended to half the depreciation on the car, there or there abouts.

I specifically look for the better deals or wait until I find one.
I'll not rush but I tend to get to around four years and have a look at the costs, used values etc and start planning.

I'll choose a class of car I want with a few necessities but I'm not really too bothered what it is, though I do tend to check the PCP deals on offer to help me decide, as the balloon payment gives me an idea of what a model will be worth when it's time to think about another deal.

Another thing is the set costs, things like servicing.
Is a service plan cheaper than paying out for individual services.

Warranty is something else.
Has it a warranty that covers your planned ownership or would you buy an extended warranty?
It's not unusual these days to find manufacturers offering 5 or 7 years warranty but there are others that extend the warranty by a year with every official dealer service, like Toyota that will cover a car up to 100,000 miles or ten years.

My current car came with a 5 year warranty, I will probably start looking for another deal after it's ran out but wouldn't really rush into another unless it's right.

There are some other cost bonuses, like new cars tend to come with breakdown cover that would usually be another ownership expense. 

When I roll all these things together, with my last few cars the depreciation costs haven't had a massive impact and I have paid out very little apart from servicing, which I'd do on a used anyway.

What has helped with my current car is the fact I bought it when new cars were generally cheaper in 2020 and car prices since have shot up, particularly used ones, but I still had success with cars before all these crazy prices started.

In fact I could sell it today and still recover £16,000 of the £18,500 I paid as I got a healthy discount on the £23,500 invoice price.
£2500 for nearly for 4 years of motoring and it's cost me what I paid for the service plan, which was a couple of hundred less than buying them individually, so I can deduct that off the £2500.

I saved a couple of hundred on breakdown cover (like for like cover), so that can come off as well.

God know what a warranty on a used car would have been over that time, but I could take that off the £2500 as well.

And then there are repair costs.
I've spend nothing else on it except I did replace the wiper blades which cost me £22 as they aren't considered part of the service and one MOT cost so far.

What would I spend on a used car? Difficult to say, but a set of tyres and brakes sounds likely, say £80 to £100 a corner for tyres and £300 for a set of front pads and discs fitted.

I will probably do the same again for at least my next two cars, the last one I hope will take a good long stretch into my retirement.
Hopefully Toyota/Lexus are still doing their yearly service/warranty extension then.

On-the-coast

"I have owned ~20 cars in my lifetime, been driving for about 35 years now and I have tried every option - bangernomics, buying nearly new, buying new, leasing etc.
The criteria I am interested in is total cost of ownership including depreciation, reliability, suitability etc."

Snap! (except I've never bought new).  Great response above from @Goudy btw.

You've mentioned some good points. - here are a few more which are important (to me)
... how consistent is my need for a car, and the distance it must cover (job, number of children etc. etc.)
... can i "afford" to be without a car with a while (think public transport or weather). Who's relying on me to be somewhere at short notice etc.
... what happens if it breaks down in an expensive way - do i take it to webuyanycar or repair it.
... and do I have the ability to time my purchase for when a bargain appears?  The best bargains I've had have been when friends or relatives have traded in their old but well maintained cars... "hey the garage offered me £100 - do you want a car for £100?"  My mum's targa-top honda cost me £100... and lasted 3 happy years! (this happens less now.. since i helped her improve her latest garage trade-in offer from £450 to £1650 with webuyanycar...)

I currently lease (PCH) an expensive car (fully maintained), but on a fabulously cheap monthly payment - not many of those around when i last looked.
I have a second car which is low mileage... well maintained, 7 years old, which cost me around £6k 3years ago, and I'm pretty sure i could get near that price if i sold it now.  But I only do around 4k miles per year in it.  I could "get by" with either of these cars, so it gives me a lot of flexability. 
When i was younger... i could barely be without a car for a day - many responsibilities and lived miles from public transport and job, which completely altered my outlook, as today i work from home, and my children are self-transporting!  The main problem with my approach is that money was tightest when i had the least options.

Nobbie1967

As you’ve had an EV for three years, I assume it suits your requirements, so a three year old EV would probably be ideal for you. You’ve missed the initial depreciation and at three years old it should be pretty reliable and you can pay for an extended manufacturer warranty for peace of mind. Here’s one for £12.5 from a dealer with 48k. Run for three years and switch to another three year old car.
https://www.autotrader.co.uk/car-details/202310132957795?sort=price-asc&fuel-type=Electric&make=MG&postcode=sk94bg&radius=1500&year-to=2020&advertising-location=at_cars&fromsra