Changing cars... Every 3 years or much longer?

Lord_Lardington

AdrianHi wrote: »

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That Lexus sounds like solid gold.

It was an awful lot of car for the money. It's only real downside was it's relative "juiciness" but even factoring that in, it was still cheap motoring.

It put me in mind of Jeremy Clarkson taking about a petrol Range Rover "They're Ok if your name is 'Exxon BP McShell'".

MJTHFC

AdrianHi, love the spreadsheet idea. A man after my own heart. It looks like I'm on to a loser with the changing every three years. It's my vain streak.

How can anyone call the new Mondeo boring? Classy look for a Ford!

AdrianHi

MJTHFC wrote: »

AdrianHi, love the spreadsheet idea. A man after my own heart. It looks like I'm on to a loser with the changing every three years. It's my vain streak.

How can anyone call the new Mondeo boring? Classy look for a Ford!

I like the new Mondeo and I've had a ride in an S-Max - ride, handling, refinement of the 140bhp diesel all top notch and very impressive.

MJTHFC,
Just how much effort are you prepared to put into researching what to buy, when to buy and when to sell?
I know of someone who over a 2 year period has owned the following cars:
Audi A3 s-line, A4 cab, A6 avant, 535d, M3 CSL, Mini and an S4 avant.
In that 2 year period he has paid out about £10,000 in depreciation and finance charges. He uses balance lease purchase finance. It means you put down a minimal deposit with a balloon, a bit like PCP accept balanced lease is not front loaded with interest payments like PCP deals usually are. It means capital and interest are paid off from day 1 so you can settle the loan whenever you want without penalty. This is crucial for playing this game.
£10,000 in 2 years is a lot of money, but go back and read through that list of cars again and look at what he has been driving for £5K a year which is the kind of money you loose in depreciation alone on a Mondeo bought new in it's first 2 years.
The key to making this work is:
Buying the car nearly new - ex-demonstartor, when the car has just come on the market and is in high demand. For example the 535d Sport Touring had been on the market for about 4 months, hugely desirable new model, when he got it. List price 48K with just the "right" options on it, he rang round dealers with 3 month old ex-demonstrators up for sale at the end of a quarter (desperate to grab sales to meet bonus targets) and made them an offer of £35K. Some said no, one said yes, he got the car. He kept the car just under a year putting 20,000 miles on it. He sold it privately for £32,500. For finance charges and depreciation that was a £300 a month car, £3600 for one year. You cannot do this with a Mondeo, it would cost you far more.
Try to do that now with the same car and it would not work, there's plenty of these cars in the used market. Timing is critical to getting this right and have to have the courage to make dealers silly offers and take the chance on the resale working out.
For me, it's too much work and a bit risky, but it shows what can be done if you know what you are doing.
The M3 CSL was an interesting one. Had it 6 months and made a £2,000 profit on that one

Anyone game?

michaels

I needed a commute car so watched ebay for a few weeks and got a fiat stilo 4.5 yrs old fsh 39k for 2k. Now have had it 18 months, added 24k paid 100 for service and MOT, 80 for 2 tyres and benefited from group 4 insurance and 40+ mpg and still 100mph on the M25 (on the rare occasions that traffic permits) and could sell it now to wewillbuyyourcar.com for £1600 - I think that qualifies as fairly cheap motoring

AdrianHi

michaels wrote: »

I needed a commute car so watched ebay for a few weeks and got a fiat stilo 4.5 yrs old fsh 39k for 2k. Now have had it 18 months, added 24k paid 100 for service and MOT, 80 for 2 tyres and benefited from group 4 insurance and 40+ mph and still 100mph on the M25 (on the rare occasions that traffic permits) and could sell it now to wewillbuyyourcar.com for £1600 - I think that qualifies as fairly cheap motoring

Nice one, just shows what you can do if your not in a hurry to get hold of a car and you put some effort into it.:cool:

Dan29

AdrianHi wrote: »

For sometime now I've been developing a spreadsheet which works out total cost of ownership / use for a car over a given period of time, as an average monthly expense.

Hi Adrian

I've seen you mention your spreadsheet a few times now, and it sounds very interesting. Would there be any chance of your allowing people to download it, or publishing the results, please?

Thanks
Dan

AdrianHi

Hopefully this will come out OK until I can may be post it up for download.
This illustration shows my car in year 4 (which will start November 2008) compared with it's first 3 years. I bought the car new (for better or for worse). It uses What Car residual values and parkers.co.uk information (which are a fairly close match for most cars) for residual values.
I think it is reasonably accurate because it includes the cost of cash tied up the the car. A limitation would be it is not counting the cost of lost interest on loan payments and other expenses you pay out for to get a true value relative to no car at all. It does give a good comparison between one car and another and reveals interesting facts like a £13,500 Mini One 1.4 Pepperpack over 36 months is just about the same cost as an entry level Skoda Fabia 1.0 12V 3 cylinder.
The savings rate shown is my mortgage rate, since any cash in a car is not paying off my offset mortgage. For some cars, like Vauxhalls, leasing (no money tied up in car) works out very cost effective for me.
If you are wondering about the big jump in servicing costs, this is a little peculiar to BMW condition based servicing. I think the schedule is set up to deliberately make it cheaper in the 36 month 36,000 mile range to make the car more attractive to fleet managers. The servicing really will go up this much in year 4 but be fairly consistent after that.


Miles/Month 1200 4.546 Petrol price £/l 1.12 0 Diesel price £/l 1.25 Savings rate % 0.0583 Loan flate rate 0.013 APR 0.0247 320d year 4 320d SE (last)
Original list price 27800 27800 Purchase price 13344 27800 Loan amount 0 11000 Equity in car at purchase 13344 16800 3 year retained value 0.48 0.48 Residual value 9744 13344 Months owned 12 36 MPG 47.00 58.90 Fuel/month 145.09 115.77 MOT 4.17 0.00 Tax 11.67 11.67 Servicing 30.00 7.78 Repairs/Warranty 29.17 0.00 Depreciation 300.00 401.56 Tyres 22.22 22.22 Breakdown cover 8.33 0.00 Interest lost on equity in car 64.83 81.62 Finance charges 0.00 11.92 Insurance 37.50 37.50 Crash safety * * * * * * * * * * Journalist score * * * Owner score * * * * Total 699.97 748.93 Extra compared to current car 48.96 per year 587.53


Edit: Oh dear that did not work very well, I'll post back later with a link.

AdrianHi

Dan29 wrote: »

Hi Adrian

I've seen you mention your spreadsheet a few times now, and it sounds very interesting. Would there be any chance of your allowing people to download it, or publishing the results, please?

Thanks
Dan

OK here we go:
CarComparisons.xls

I'd be interested in comments for improvements and getting it more accurate. Keep meaning to build this as a web site at some point since I'm not happy with other car cost calculators you find online. They all underestimate the real cost of having a car relative to walking IMO.

Badger_Lady

OK, my turn!

I can't think of any financial justification for only driving new cars. A new car is a great luxury that many people enjoy, like new flats, new clothes... but will always cost you more money.

I actually climbed up the car "ladder" using eBay:

1) 1989 Rover Metro £210 - kept for 1 year, no maintenance, sold for £350
2) 1995 Toyota Paseo £700 - kept for 1 year, new tyres, sold for £1,200
3) 1996 Honda CRX £2,100 - just flew through MOT, new tyres, road tax, no theoretical depreciation so far.

The Honda is in mint condition, having just been imported from Japan - electric Targa roof, matching interior, no dings / scrapes and an engine so quiet I've tried to pull away without starting it before now (and tried to start it twice!). As far as I'm concerned, it's pure luxury, especially with the roof down in this sunshine, and no-one would know it's 12 years old! It will hold its value, and I may well keep this one until it dies anyway.

And yes, I do buy my clothes second-hand and sell them on for the same price or more when they're worn out

Dan29

AdrianHi wrote: »

OK here we go:
CarComparisons.xls

Thanks Adrian, very kind of you. Much appreciated.