Most tax efficient and lowest annual cost to own a new or nearly new car in retirement?

Miiade

In 18 months time you will be able to buy the new Tesla compact (golf sized), EV likely to be about 25k.  This will have all the latest tech and have full self driving capability once  it is made legal here. I expect this to be leaps ahead of any other EV on the market. They are currently doing 0% finance but not sure if they will do this for the compact.

As soon as it’s open for orders I would advise ordering as it’s likely to be in huge demand and will probably be the best selling car in the world

Nebulous2

We've never quite settled on one car or two, and have floated between the two options quite a bit. We bought a new vehicle as a tow car and to carry bikes before I retired, then I took a part-time job with a 50 mile round trip commute. It was leaving my wife without a car, so I got an EV, as a toy. It has just gone back. It is astonishing how nice it was to drive. Like a dodgem, one pedal driving, foot down it goes, foot off it stops. Generally reliability of EVs is better than ICE cars. Most batteries have a 8 year warranty, and there are some Teslas in particular with rocketship mileages. The biggest issue with EVs tends to be software gremlins.  

My car was on a lease. Reasons for that were uncertainty about residual values for EVs and uncertainty about how long the job would last. On a 3 year timescale leases generally beat most other methods for overall cost of new / nearly new motoring. I paid less over 3 years, in total, than the car depreciated. On a longer timescale it differs though, and ownership would often be better. You really need to get the figures and do the sums for yourself.

The manufacturers are under pressure to produce more EVs, otherwise they are going to be penalised. They will sell a batch of them to a leasing company cheap, who will then pass those savings on to the end user. If you chase deals though you won't necessarily get the spec or the colour that you want. It's like buying new cars, the best offers are on the ones the dealer has, not on factory orders. 

My other vehicle is approaching 5 years old. It's value has been artificially inflated by supply shortages, and for quite a while would have been worth more than I paid for it. That has changed with a vengeance this year, and I've seen a big (probably overdue) drop. The issue with that is that the new equivalent vehicle has gone up quite a bit, so a cost to change to the new one is getting higher, and more unpalatable. We'll probably keep this one for a while, but as has been said earlier these decisions are not all about finances! 

Vespaboy

Buy a campervan 😊

pterri

I live in London (zone 2) and binned my car a few years ago, I’m lucky that I don’t need a car but absolutely would if I were somewhere rural. That said, I saw this article at the weekend on used EVs https://www.theguardian.com/environment/article/2024/aug/24/spectacular-bargains-why-now-is-a-great-time-to-buy-an-electric-car-in-the-uk?CMP=Share_iOSApp_Other. 

I’ve also read elsewhere that the idea that batteries degrade quickly is a bit of a myth? Dunno. 

Ciprico

We recently bought a little BMW i3.

6 months old, 2000 miles, and we paid 19k. The previous owner paid 35k...

So horrendous depreciation, but if you're on the right side, no problem. 

Couldn't go back to ice, but appreciate it's not for everyone. Being a low milage user, the ability to charge at home, and having solar panels swing it for us....

MikeJXE

Ciprico said:

We recently bought a little BMW i3.

6 months old, 2000 miles, and we paid 19k. The previous owner paid 35k...

So horrendous depreciation, but if you're on the right side, no problem. 

Couldn't go back to ice, but appreciate it's not for everyone. Being a low milage user, the ability to charge at home, and having solar panels swing it for us....

Depreciation of £16,000 over 2000 miles

Thats £8.00 per mile alone

No wonder EVs are piling up in the fields

Albermarle

For the the many years I was working I had a company car. The last three cars  were supplied via a leasing company, whereas previously they have been bought outright by the employer. From a user/driver point of view this was a negative development, mainly because all issues, services, minor scrapes had to be handled by the leasing companies call centre.
Just booking a service could cause problems, as there were three parties involved instead of two, and often they had the wrong info on their system. Even when the service took place, ( I twice turned up to find there was no booking) and  if something needed doing, there was always a delay as the garage needed the go ahead from the leasing company.
Also when you hand the car back there can be a lot of claims and counter claims about the condition it is in, and demands for money.
So when I retired I vowed to avoid all this c**p and bought a car outright. Since when I have had no issues at all dealing directly with the local dealer for servicing etc.
Even better it was ex demo and bought just before the new car supply chain crunch in 2021, so it went up in value rather than down !

mcn99

Similar position, close to retiring and the old car was on its last legs.

Decided  on leasing 4x4 ev, depreciation and the fact ev technology is improving so fast I didn't want to be left with a car no one wanted. Went for lease to basically see if I liked having an electric car

After driving ev for 2 months, it's been great, after lease deal I will probably buy a nearly new one.Its costing pennies to run

Used prices are great at moment, and if your not doing massive mileage, evs are great

westv

Bit can your floor it, do doughnuts and handbrake turns in an EV? 😁😁

michaels

ali_bear said:

What is your reason for going electric? I would caution that unless you are doing it for strong idealistic reasons it may not make sense. [warning! my opinion here] For whatever reason the electric cars we have today are just as expensive and not any more environmentally friendly than the petrol and diesel ones we already have, when taken over the whole vehicle life cycle. Consider the battery alone, the cost of producing them plus the need to expensively replace them after five years or so. 

You see a lot of electric cars around that have been leased as company cars because of generous tax allowances on EV's. But this doesn't apply to you because you're not on PAYE. 

You may want a new car for many reasons, and it's your money, why not get what you want. 

But if you are really being thrifty AND want a new one, I would suggest you choose a make/model and drivetrain/spec level that meets your needs going forward. Then look for the same being discounted by the dealers - usually this will happen when the outgoing model is about to be replaced with a newer version because its been in production for 4-5 years already. Dealers will offer better discounts on stock they already have, especially on a personal finance package you may get a significant deposit contribution. The best deal is to take the finance package and then pay off the entire balance within a couple of weeks, the car is then yours and you pay no interest. 

This info on EVs is simply wrong. 

They do not need replacement batteries over the vehicle lifetime
With the UK electricity energy mix their overall lifetime emissions including manufacture are about 50% those of an ICE vehicle if driven an average annual mileage (say8-10k).

My oldest EV is now 10 years old and is on the original battery after 90k miles, also all original brake parts and of course no oil changes.  It has just had tires and some suspension bits as we do mostly town ( = speed bump) miles.

There is also a recent article that stated that many EVs are now the same price at 4 year sold as the same model in petrol despite having a list price between 6 and 10 k higher - this means that they do depreciate more in the first 3 years but obviously over 7 or 8 years the impact is reduced.  Most are now available new or pre reg at considerable discount of list so again the actual depreciation is less than a simple list price to 3 year old price suggests.