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Keep our car or trade it in?

in Motoring
8 replies 1.1K views
stud26stud26 Forumite
71 Posts
Part of the Furniture 10 Posts
We have a car which we own outright. It's probably worth around £3,000. As with most cars it will depreciate even further soon.

Do we trade it in now while it's still running and worth a few quid (and probably buy a more expensive car), or stick with it for as long as possible and perhaps the inevitable costs of repair?

Thanks for any advice.
Building my kids' savings from day one. Education is key to financial control.
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  • facadefacade Forumite
    5.6K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Do you fancy a new car?- if so, buy one, nothing wrong with that.

    If you want moneysaving advice, then it will always be to keep running the car that you have. Whilst it is running fine, put the money that would have gone on the payments for a new car in a savings account (or under the mattress :) ) then, when it eventually wears out, you will have a nice cash float towards another one
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

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  • Ebe_ScroogeEbe_Scrooge Forumite
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    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    I have to agree totally with Facade on this one. From the purely MSE point of view, if the current car is basically sound then it makes sense to keep it. You could pay for quite a lot of quite major repairs if necessary, and still come out on top when compared to the cost of a "new" car. Plus you have the advantage of knowing the history of your current car - you know what's been replaced so far, what's due to be replaced soon, what items you suspect may be on their last legs, etc.

    So from a purely financial viewpoint it's a no-brainer. But if you just fancy a change and hang the expense, then there's nothing wrong with that - so long as you don't go putting yourself into piles of debt to do so.
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  • macmanmacman Forumite
    49K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    How old is it? A car worth only 3K has already had it's steepest period of depreciation, which is in year 1 (or indeed as soon as you drive it off the forecourt).
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  • EctophileEctophile Forumite
    6.2K Posts
    Tenth Anniversary 1,000 Posts Name Dropper
    However long you keep the current car, it will not depreciate by more than £3000. Your new(er) replacement will depreciate a lot quicker.

    So it makes no sense to upgrade to a new car to save on depreciation. Just keep the old car until something drastic goes wrong, or it just gets too expensive on repair bills.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
  • fred246fred246 Forumite
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    Reminds me of the discussions that my parents used to have about cars in the 1970s. They always bought cars on finance. You used to have to have a good deposit in those days. If you let the value of your car drop too much it wasn't worth enough for the next deposit. They weren't very good at saving cash.
  • There is an old adage which says that the cheapest car to own is the one you have now. Not always true, of course, but not a bad rule of thumb bearing in mind the depreciation on a new car. There is good advice above to put the amount you would be paying each month into a special account to raid when you do have to change the car.
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  • alan_dalan_d Forumite
    331 Posts
    Third Anniversary 100 Posts Mortgage-free Glee!
    If it ain't broke don't fix it ;)
    The £3000 car will be towards the flat bottom of it's depreciation curve, so won't depreciate much now. Let's say £500/year.
    Even if you spent £500/year in maintenance & repairs on the current car (unlikely to be that high) this (and it's minimal depreciation) will still be waaaaay less than you'd pay on a new car in finance costs, depreciation, maintenance etc.
    Keep running the current one.
  • stud26stud26 Forumite
    71 Posts
    Part of the Furniture 10 Posts
    Thanks for confirming what I suspected anyway. Sometimes just need to double-check it.
    Building my kids' savings from day one. Education is key to financial control.
    Save money using my referral codes >
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