why do our cars depreciate so heavily?

RobAMerc

Was talking to a relative out foreign the other day. We got to talking about cars and I sent him a link to a CLS I liked on carzone.
He was shocked at how cheap it was - yes you read that right, how cheap it was. He reckoned an 06 350 cls there ( Europe ) would cost 7 to 8 k more. Then when I informed him of the new cost of a CLS he was even more shocked - depreciation here is shocking!

Anyway - why is that, it's not just the fact we treat our cars like sh1t, there are some decent nick 4/5 yo cars about.

Plate envy an issue ?

/Rob

listermint

Yes plate envy is one part,

Another is make and model percieved depreciation.

But one of the fore runners has to be engine size, not only in terms of being physically raped tax wise. Irish people have an inate fascination with the 1.6 engine low spec'd range whatever the vehicle manufacturer.

So nice 2 litre - 3 litres get left behind, Makes it handier to pick up them bargains but a pain to sell on..

Matt Simis

Lack of market and interest on high end, large engined cars due to illogical motor taxation and VRT system I would imagine.
Combined with a more transparent Reg plate year system than anywhere else in Europe (I think?) which leads people to place an inordinate amount of "value" on the plate number and under value the vehicle.

I bought the Audi S8 (1998) for about just around 1/3 the going rate in the Netherlands, a country with similar VRT type registration tax.

ei.sdraob

listermint wrote: »

Makes it handier to pick up them bargains

Yes

inforfun

Matt Simis wrote: »

Lack of market and interest on high end, large engined cars due to illogical motor taxation and VRT system I would imagine.
Combined with a more transparent Reg plate year system than anywhere else in Europe (I think?) which leads people to place an inordinate amount of "value" on the plate number and under value the vehicle.

I bought the Audi S8 (1998) for about just around 1/3 the going rate in the Netherlands, a country with similar VRT type registration tax.

Bought my car last year for 50% of what the average price in Holland was. And indeed new price holland and ireland are similar.

MarkoC

I think its simple:
Ireland became into real deep economy **** and thats why the car prices came down FINALLY !
Car prices here were far overpriced anyway for years ...

colm_mcm

I think the used price of uk cars makes a bigger difference to irish cars than we realise.

Another factor is The wide market for lhd cars across europe. Certain cars go out of fashion in one country and become popular in others, was in Romania where lots of used German cars are imported.

Not big on economics but I'd imagine exchange rates to non euro currency countries may make them more attractive to export?

Joe 90

When I lived at home I came to the conclusion that when a years road tax on a used car became more than a months repayment on a reasonable loan to buy it, the car was going to become worthless in very short order. I'm 60 and still hate Mercs because my father always drove 2 litre versions.

mickdw

Joe 90 wrote: »

When I lived at home I came to the conclusion that when a years road tax on a used car became more than a months repayment on a reasonable loan to buy it mortgage, the car was going to become worthless in very short order. I'm 60 and still hate Mercs because my father always drove 2 litre versions.

I dont quite understand your point but I fixed your post none the less

Joe 90

mickdw wrote: »

I dont quite understand your point but I fixed your post none the less

I'm going back 25 years but I reckoned that if it was going to cost you 400 a month to buy the thing and 400 a year to tax it then it was well on the way to being worth nothing.

listermint

Joe 90 wrote: »

I'm going back 25 years but I reckoned that if it was going to cost you 400 a month to buy the thing and 400 a year to tax it then it was well on the way to being worth nothing.

Cars are worth nothing, its what they are worth to you.

So hypothically by your reasoning an extremely well maintained E46 M3 is 'worth nothing'

makes no sense.

I buy cars for me, not to make money on em when they are sold. You just cant buy the smile when your happy with your car.

kippy

Essentially a car gets you from A to B and to do that you must "operate it" within a fixed and rigid set of rules, regulations and laws.
To operate said car costs an amount of money both in the capital acquisition of the car and the (substantial) running cost of the car.

Some cars depreciate rapidly, others not so much and I believe the reasons are linked to the two points above. The more expensive the car initially the greater the percentage depreciation.
Our current woes have managed to push down further car costs (especially from new).

For me, a car gets me from A to B. Once I can do that as cheaply as possible in a car that is roadworthy, I really dont give a toss what "brand" of car I drive. I still have to drive it no matter what badge is on the front and have to essentially keel it below a max of 120 odd kph on Irish roads no matter what the top speed or time to get to 100 kph are.
As such cars that have high initial values (and usually high running cost values associated with them) dont appeal to me. I suppose that could be said for a lot of the population, hence the major depreciation in some/ a lot of models.

raymann

if you go to Venezuela a ten year old toyota nail is $10 000. the reason for this is that not many people there can afford a new car. this severely limits the amount of second hand cars available so pushes the price up.

as someone else pointed out we are effected by the huge amount of supply in the uk but even over there there is a way higher % of new cars being bought than in mainland europe.

getting any credit of any kind in france is very tough, even in the crazy years. end result less new cars sold, second hands more expensive.

simples.

Joe 90

listermint wrote: »

Cars are worth nothing, its what they are worth to you.

So hypothically by your reasoning an extremely well maintained E46 M3 is 'worth nothing'

makes no sense.

I buy cars for me, not to make money on em when they are sold. You just cant buy the smile when your happy with your car.

Different storey. An M3 is something to lust over, not something to reason about. The question there is can I possibly afford as opposed to does it make any financial sense to buy it.

Primsey

What is the average annual depreciation in percentage terms of the value of a car? I'm looking to replace my 01 reg corsa (petrol) which doesn't qualify for scrappage. I'd like a diesel corsa. With trade-in plus a budget of 11k cash, I had hoped it would be easy enough to get at least a two year old car. Not so. Would I be better holding off in the hope of the scrappage scheme being extended past june or maybe waiting until next year for more second hand cars to come on the market?

Guy:Incognito

Matt Simis wrote: »

Lack of market and interest on high end, large engined cars due to illogical motor taxation and VRT system I would imagine.
Combined with a more transparent Reg plate year system than anywhere else in Europe (I think?) which leads people to place an inordinate amount of "value" on the plate number and under value the vehicle.

I bought the Audi S8 (1998) for about just around 1/3 the going rate in the Netherlands, a country with similar VRT type registration tax.

So why are cars in the UK cheap aswell then?

raymann

Guy:Incognito wrote: »

So why are cars in the UK cheap aswell then?

see my earlier post? easy credit and lots of people buying new cars means more second hand cars.

RobAMerc

kippy wrote: »

Essentially a car gets you from A to B and to do that you must "operate it" within a fixed and rigid set of rules, regulations and laws.
To operate said car costs an amount of money both in the capital acquisition of the car and the (substantial) running cost of the car.

Some cars depreciate rapidly, others not so much and I believe the reasons are linked to the two points above. The more expensive the car initially the greater the percentage depreciation.
Our current woes have managed to push down further car costs (especially from new).

For me, a car gets me from A to B. Once I can do that as cheaply as possible in a car that is roadworthy, I really dont give a toss what "brand" of car I drive. I still have to drive it no matter what badge is on the front and have to essentially keel it below a max of 120 odd kph on Irish roads no matter what the top speed or time to get to 100 kph are.
As such cars that have high initial values (and usually high running cost values associated with them) dont appeal to me. I suppose that could be said for a lot of the population, hence the major depreciation in some/ a lot of models.

why oh why are you in the motors forum ? you clearly have 0 interest in cars. an opinion yes, an interest no.

zilog_jones

I was in South Africa earlier last year, not exactly the most affluent country around, but the prices of used cars was shocking compared to here. I saw a '98 Fiesta going for about €2,500 - and never mind "Paddy spec", this would be the most basic 3-door 1.3 without even a rear wiper!

But the mentality is completely different over there. The number plates aren't age-related, and there were many cars manufactured there well beyond their sell-by date e.g. VW Golf Mk. 1 (1974-2009), Mazda 323 BF (1985-2003), Toyota Corolla E90 hatchback (1987-2006), Nissan Sunny B140 pickup (1971-2008), etc., so age is less of a concern for most people. Cars don't rust as easily down there and people still actually fix things as opposed to throwing them away - there was loads of '70s and '80s stuff still on the road - my grandad drives a 1982 Kadett D there, and it wasn't the only one in their small town

kippy

RobAMerc wrote: »

why oh why are you in the motors forum ? you clearly have 0 interest in cars. an opinion yes, an interest no.

Oh, I have an interest in cars alright, I would have thought that were obvious.
The level of that interest wouldn't be as high as a lot in this forum but that surely wouldnt exclude me from posting in it.

Guy:Incognito

raymann wrote: »

see my earlier post? easy credit and lots of people buying new cars means more second hand cars.

I was specifically replying to Matt Sims' reasons.

Anyway, have we a higher proportion of used cars for sale here than other European countries?

Matt Simis

Guy:Incognito wrote: »

So why are cars in the UK cheap aswell then?

Compared to Europe or here?

Compared to Europe I suspect these are factors:

• There is still less interest in large CC prestige models (used) than mainland Europe. The only difference between UK and Ireland is VRT, IMO the mindset is fairly similar, but we are pushed to the extreme via taxation.
• Zero export potential aside from the trickle we take in due to them being RHD, which reduces demand and therefore prices. RHD 850CSi is EUR20k, a LHD German one could go for double that, but no one in Germany/Europe proper would or could purchase the RHD model.
• Lower taxes on Cars at point of purchase compared to many European countries (including Ireland) means price pre-depreciation is lower than say, NL therefore Used price is also lower.

Compared to Ireland, cars in the UK are not always cheaper. Used cars frequently are cheaper here even ignoring VRT. Much cheaper here is you were to calculate our actual cost new or used, pre-Tax (VRT).

Iwannahurl

Here's my tuppence worth.

How many other countries in the EU have vehicle registration plates where the year of registration is so prominently displayed? Not many. This focuses a lot of attention on the age of the car. Its age is an absolute, whereas other factors are relative.

The average age of cars in Ireland tends to be lower than the EU average. There may be a number of reasons for this variation, but IMO one prominent reason in Ireland is that motorists do not want to hang on to a car that may be in very good condition but which is visibly ageing for no other reason than its number plate clearly says so in black and white.

Just a thought, FWIW.

Merch

Cars are better looked after in UK, here you can barely get a main dealer to do a job properly

wonski

Merch wrote: »

Cars are better looked after in UK, here you can barely get a main dealer to do a job properly

I think main dealers do the job, but the money they charge is insane.
Cars are serviced as required, but then warranty expires, and some people have no clue how to keep value of the car. Most of the second car I've seen that were between 2000/2002 had no service history at all. Sellers usually say crap when it comes to details about oil, timing belt, filters etc. Some people don't even check oil level regularly, not to mention changing it.
Prices of used cars are low, but from my experience it is often a lottery when you buy one. And when you buy it, you need to spend little extra to make it reliable. I had five cars so far, and only the last one seems to do the job.
Services and repairs are very expensive in Ireland - either main dealer or independant garages, and this has something to do with the prices, on top of cars being right hand drive etc

Merch

wonski wrote: »

I think main dealers do the job, but the money they charge is insane.
Cars are serviced as required, but then warranty expires, and some people have no clue how to keep value of the car. Most of the second car I've seen that were between 2000/2002 had no service history at all. Sellers usually say crap when it comes to details about oil, timing belt, filters etc. Some people don't even check oil level regularly, not to mention changing it.
Prices of used cars are low, but from my experience it is often a lottery when you buy one. And when you buy it, you need to spend little extra to make it reliable. I had five cars so far, and only the last one seems to do the job.
Services and repairs are very expensive in Ireland - either main dealer or independant garages, and this has something to do with the prices, on top of cars being right hand drive etc

I'm not convinced that cars are serviced exactly as required, maybe to the bare minimum standard, I agree the prices are crazy, that is part of the reason though, they are dying to get the next vehicle in so they can fleece them too. I got a timing belt done (would have just been too much hassle to do myself) they took off and re-used the aux belt even though it would only have cost an extra €10 and there wasn't a hope in hell they checked, let alone replaced the shims under the cam shaft (I guess as that would have involved too much work/time)

I agree it is a total lottery when buying second hand, If I was looking at a second hand car and I thought that all that had been done was an annual oil/filter/air filter change and the odd spark change then I'd be reasonably happy, on the other hand I'm not surprised when people dont check the air in their tyres let alone, the oil level oir even consider changing it. Partly their own fault partly because prices are so high they wont consider getting it done and drive it into the ground.

wonski

I can't believe that all the garages are that bad. I believe you can find similiar stories about lack of competency in many european countries. Still, people do the service and repairs regularly, and 15 years old cars with much over 200k km on the clock are not rubbish.
I am also far from saying that garages here are good, but even if you do the basic maintenance and routine around your car regularly, your car should last for long.
Also, there are things you can fix without even going to garage (not everyone wants). I had problem with car not running well, one cylinder out... checked in the internet - ignition coil, maybe spark plug, or cables. Screwdriver, two screws on top of engine, one coil was definitly baked. Price at Renault dealer - 90E(part only), the same coil at other store - 35E. Ten minute job and problem solved. Maybe I just became addicted to cars, and it seems normal to me, but even 10 years old car deserves some attention, and the cost can be brought down to very little.
But it is always easier to go to garage, refuse to go on with repairs, and then decide to sell the car, before fixing thing, with hope that buyer won't spot any problems...
Most people see problems only when the car won't drive at all. Little too late.

Merch

I agree, a lot of irish people would too I think, I'd be an advocate of the Haynes manual, anyone can learn from that, but def the internet is a good resource, for some people its not their priority to know even a little about their car,they usually apply the same standard to their driving too .

wonski

Merch wrote: »

I'd be an advocate of the Haynes manual, anyone can learn from that, but def the internet is a good resource, .

Haynes manuals are great, if only people knew, how good they are...it is getting little OT, as Haynes manuals don't have much to do with deppreciation, do they???
I am still happy to pick up car for 1 month salary, so can't see the problem really. But, as someone mentioned before, if everyone took my position, i would have no chance to get cheap used car...basics of economy!