How do people get brand new cars every year? How does it work?

arleitiss

Hey, out of curiosity - I've seen many people get brand new model of same car every year, I mean people who have average office jobs.

For example:
In 2011: Bob drives 7 series 2011
In 2012: Bob drives 7 series 2012
In 2013: Bob drives 7 series 2013

I assume bob doesn't shell out every year for brand new model?

Do official dealerships offer some kind of "upgrade" or something?

ucd.1985

arleitiss wrote: »

Hey, out of curiosity - I've seen many people get brand new model of same car every year, I mean people who have average office jobs.

For example:
In 2011: Bob drives 7 series 2011
In 2012: Bob drives 7 series 2012
In 2013: Bob drives 7 series 2013

I assume bob doesn't shell out every year for brand new model?

Do official dealerships offer some kind of "upgrade" or something?

Might just lease it for one year.

arleitiss

ucd.1985 wrote: »

Might just lease it for one year.

Is leasing car like renting it?

mhackett102

It usually only costs a few thousand euro (depending on the car) to change up a year every year. Also, you dont have the bother of NCT as you wont have the car for 4+ years, and maintenance costs are low as the car is new and will need minimum within its first 12 months.

Often of times, if the person continues dealing with the same dealership year after year then they are inclined to get it at a good price.

yosser hughes

ucd.1985 wrote: »

Might just lease it for one year.

I've often wondered about leasing. What are the advantages/disadvantages? What are the costs? Is there a tax benefit etc? I've often heard people say that a lot of people driving high end cars are leasing them.
I'd be interested to hear what people know about leasing cars.

*Kol*

Bob has tons of wedge and/or a really good company car deal if he is getting a 7 series every year. Benefit in kind on that makes my eyes water.

arleitiss

mhackett102 wrote: »

It usually only costs a few thousand euro (depending on the car) to change up a year every year. Also, you dont have the bother of NCT as you wont have the car for 4+ years, and maintenance costs are low as the car is new and will need minimum within its first 12 months.

Often of times, if the person continues dealing with the same dealership year after year then they are inclined to get it at a good price.

So it's a pretty decent thing to do if you have few thousand a year at your disposal instead of buying car in 2015 and then driving it till it dies?

Darraghmh91.

I always think when I see them with a new car every year it's a company car

My birds da works for Nissan and gets one every year brand new

*Kol*

arleitiss wrote: »

So it's a pretty decent thing to do if you have few thousand a year at your disposal instead of buying car in 2015 and then driving it till it dies?

If I had the few grand each year I would change cars if I could. Normally company cars are changed every few years tho.

colm_mcm

arleitiss wrote: »

So it's a pretty decent thing to do if you have few thousand a year at your disposal instead of buying car in 2015 and then driving it till it dies?

The first years depreciation is the highest. It's an expensive way to do it.

Occasionally you can get great deals on some models, and can do it cheap if you put in the legwork. There isn't really a case to be made ref tyres/servicing though.

166man

Often it works both ways, if you have a good rep with the dealer and he knows you'll chnage every X amount of months he knows he has an immaculate car coming into stock. He can then afford to offer a higher valuation thus incentivising you to change.

If you have the money work away, wouldn't be my cup of tae though!

Atlantic Dawn

On something like a 7 Series I would think the lease deal would have to be at least €20k (€1,666 a month) for year 1 for it to be worthwhile for the dealer as the depreciation hit would be insane. Cheapest 7 Series is €91.5k, car will be worth at best €50k in 3 years. For me to be spending €20k a year and to have no motor at the end of it is criminally insane but then again I don't have that kind of money to blow a month so who am I to judge.

mhackett102

arleitiss wrote: »

So it's a pretty decent thing to do if you have few thousand a year at your disposal instead of buying car in 2015 and then driving it till it dies?

From what Ive been told, yes

If you actually think about it, it does seem to make sense. If you have a new car then you would get very minimum problems within its first 12 months, really the only thing you are paying for is fuel, insurance and tax. The average depreciation rate on a car is 10%. So if you buy a car at €20,000 , then that car has depreciated by €2,000 over twelve months. So then if you go for the same car the year after at the same price then you should only be paying €2,000 along with your trade in.

While if you buy a car and have it for 4 years - you are paying for fuel, tax, insurance, NCT, annual servicing, new set of tyres, probably a couple of internal and external damages, and after the 4 years then a new model of the car has probably come out so it has depreciated in value even more.

There are a lot of pro's and very little con's of doing this kind of method. A friend of mine gets a new Ford Mondeo every year and they dont seem to understand why people dont do it more often. And he isnt in a very high-up job!!

*This may sound very confusing, apoligies. It made sense whist I was typing it

arleitiss

mhackett102 wrote: »

From what Ive been told, yes

If you actually think about it, it does seem to make sense. If you have a new car then you would get very minimum problems within its first 12 months, really the only thing you are paying for is fuel, insurance and tax. The average depreciation rate on a car is 10%. So if you buy a car at €20,000 , then that car has depreciated by €2,000 over twelve months. So then if you go for the same car the year after at the same price then you should only be paying €2,000 along with your trade in.

While if you buy a car and have it for 4 years - you are paying for fuel, tax, insurance, NCT, annual servicing, new set of tyres, probably a couple of internal and external damages, and after the 4 years then a new model of the car has probably come out so it has depreciated in value even more.

There are a lot of pro's and very little con's of doing this kind of method. A friend of mine gets a new Ford Mondeo every year and they dont seem to understand why people dont do it more often. And he isnt in a very high-up job!!

*This may sound very confusing, apoligies. It made sense whist I was typing it

I thought cars lose value by 50% every year?
So:
Year 0: 120k
Year 1: 60k
Year 2: 30k
Year 3: 15k
Year 4: 7.5k

I've seen someone saying that here on boards

arleitiss

Atlantic Dawn wrote: »

On something like a 7 Series I would think the lease deal would have to be at least €20k (€1,666 a month) for year 1 for it to be worthwhile for the dealer as the depreciation hit would be insane. Cheapest 7 Series is €91.5k, car will be worth at best €50k in 3 years. For me to be spending €20k a year and to have no motor at the end of it is criminally insane but then again I don't have that kind of money to blow a month so who am I to judge.

Well yeah I guess worth or not depends on car itself.

mhackett102

arleitiss wrote: »

I thought cars lose value by 50% every year?
So:
Year 0: 120k
Year 1: 60k
Year 2: 30k
Year 3: 15k
Year 4: 7.5k

I've seen someone saying that here on boards

All depends on what type of car.

The likes of a Ford Fiesta wouldnt depreciate by 50% (2015 at €20,000 , 2014 at €10,000 , 2013 at €5,000 , 2012 at €2,500 etc.)

But the likes of a much more expensive car would depreciate by something very close to 50%. (I wouldnt say 50% but would be close)

mickdw

50 percent every 3 years would be nearer to the mark for Most cars.

*Kol*

mhackett102 wrote: »

All depends on what type of car.

The likes of a Ford Fiesta wouldnt depreciate by 50% (2015 at €20,000 , 2014 at €10,000 , 2013 at €5,000 , 2012 at €2,500 etc.)

But the likes of a much more expensive car would depreciate by something very close to 50%. (I wouldnt say 50% but would be close)

That doesn't sound right at all. There is no 50% depreciation. In that case I would have paid €20k for my 1yo A4. Nice if you can get it

Edit. I don't think a fiesta drops by €10k in the first year either

colm_mcm

mhackett102 wrote: »

From what Ive been told, yes

If you actually think about it, it does seem to make sense. If you have a new car then you would get very minimum problems within its first 12 months, really the only thing you are paying for is fuel, insurance and tax. The average depreciation rate on a car is 10%. So if you buy a car at €20,000 , then that car has depreciated by €2,000 over twelve months. So then if you go for the same car the year after at the same price then you should only be paying €2,000 along with your trade in.

While if you buy a car and have it for 4 years - you are paying for fuel, tax, insurance, NCT, annual servicing, new set of tyres, probably a couple of internal and external damages, and after the 4 years then a new model of the car has probably come out so it has depreciated in value even more.

There are a lot of pro's and very little con's of doing this kind of method. A friend of mine gets a new Ford Mondeo every year and they dont seem to understand why people dont do it more often. And he isnt in a very high-up job!!

*This may sound very confusing, apoligies. It made sense whist I was typing it

2 grand on a 20 grand car? Nah.

Hachiko

arleitiss wrote: »

Hey, out of curiosity - I've seen many people get brand new model of same car every year, I mean people who have average office jobs.

For example:
In 2011: Bob drives 7 series 2011
In 2012: Bob drives 7 series 2012
In 2013: Bob drives 7 series 2013

I assume bob doesn't shell out every year for brand new model?

Do official dealerships offer some kind of "upgrade" or something?

almost all the time its bank money, i only buy what i can afford.

mickdw

arleitiss wrote: »

Hey, out of curiosity - I've seen many people get brand new model of same car every year, I mean people who have average office jobs.

For example:
In 2011: Bob drives 7 series 2011
In 2012: Bob drives 7 series 2012
In 2013: Bob drives 7 series 2013

I assume bob doesn't shell out every year for brand new model?

Do official dealerships offer some kind of "upgrade" or something?

I think bobs real name is pat Kenny and he gets his car free in exchange for turning up to a few launches and being a brand ambassador.

mhackett102

*Kol* wrote: »

That doesn't sound right at all. There is no 50% depreciation. In that case I would have paid €20k for my 1yo A4. Nice if you can get it

Edit. I don't think a fiesta drops by €10k in the first year either

Just using as an example to prove that not all cars would depreciate by 50% yearly.

If you could get a 4 year old Fiesta for €2,500 then I think every Tom, Dick & Harry would have one

*Kol*

mhackett102 wrote: »

Just using as an example to prove that not all cars would depreciate by 50% yearly.

If you could get a 4 year old Fiesta for €2,500 then I think every Tom, Dick & Harry would have one

I would have one!!!

*Kol*

Hachiko wrote: »

almost all the time its bank money, i only buy what i can afford.

From my experience you should buy what the bank will give you. You will look back and say I am glad I did that (I hope)

mhackett102

colm_mcm wrote: »

2 grand on a 20 grand car? Nah.

Two cars. Practically the exact same. One is 2015 and another is 2014. €1,405 of a difference in a selling price.

*Note: This was just based on a quick search done on carzone, I couldnt come across any garage which had two similar cars with only a year difference.

Bpmull

arleitiss wrote: »

I thought cars lose value by 50% every year?
So:
Year 0: 120k
Year 1: 60k
Year 2: 30k
Year 3: 15k
Year 4: 7.5k

I've seen someone saying that here on boards

That is way out as someone mentioned you'd be looking at it being worth at least 50% after 3 years. Someone offered to buy my parents octavia recently as the guy really liked the colour spec and wanted one and he offered them 70% of what they paid for it. It's 3.5 years old. Granted you wouldn't be that lucky with most cars. But your average 25k Euro popular diesel car your probably looking at 3-4k euro per year to get a new one.

For Forks Sake

Darraghmh91. wrote: »

I always think when I see them with a new car every year it's a company car

My birds da works for Nissan and gets one every year brand new

Most company cars are on 3/4 year leases.

robbie99

Most cars will be worth only 40% to 50% of their new price after 3 years. That works out at 20% to 26% depreciation every year.

arleitiss

I assume "company car" means company like car dealer or company that requires person to travel a lot? Or can it be office workers too?

mickdw

To get back to the op, there is no known way for your average man with average income to drive a new 7 series each year

TallGlass

mhackett102 wrote: »

All depends on what type of car.

The likes of a Ford Fiesta wouldnt depreciate by 50% (2015 at €20,000 , 2014 at €10,000 , 2013 at €5,000 , 2012 at €2,500 etc.)

But the likes of a much more expensive car would depreciate by something very close to 50%. (I wouldnt say 50% but would be close)

Sorry. No way would you get a 2012 Fiesta for 2500. More like 8/9k.

Bpmull

mickdw wrote: »

To get back to the op, there is no known way for your average man with average income to drive a new 7 series each year

Well if he lived / slept in said 7 series instead of a house then it would be possible :pac:

No infairness you are right assuming no external funding lad earning 35-40k euro a year + new 7 series every year just don't add up at all.

mickdw

Bpmull wrote: »

Well if he lived / slept in said 7 series instead of a house then it would be possible :pac:

No infairness you are right assuming no external funding lad earning 35-40k euro a year + new 7 series every year just don't add up at all.

Even living in it, I don't think it's possible. The depreciation on a 100k 7 series would be over 20k in first year.
Maybe renting out the boot as a studio apartment might make up any shortfall

somefeen

arleitiss wrote: »

I assume "company car" means company like car dealer or company that requires person to travel a lot? Or can it be office workers too?

Sometimes its offered as a perk even when the person doesn't need to travel for work.
Falling away now because you can be taxed as 'benefit in kind'. So they basically tax you on what the car is worth.

impr0v

mickdw wrote: »

To get back to the op, there is no known way for your average man with average income to drive a new 7 series each year

Become a chauffeur?

mickdw

impr0v wrote: »

Become a chauffeur?

True enough, would still eat up most of the profits but it might be a runner alright if guaranteed the right type of work.

MuppetCheck

mickdw wrote: »

I think bobs real name is pat Kenny and he gets his car free in exchange for turning up to a few launches and being a brand ambassador.

I've now been permanently turned off BMWs.

Greyian

mhackett102 wrote: »

Two cars. Practically the exact same. One is 2015 and another is 2014. €1,405 of a difference in a selling price.

*Note: This was just based on a quick search done on carzone, I couldnt come across any garage which had two similar cars with only a year difference.

The price you pay for the 2014 model isn't really relevant though, it's what you'd get off the dealer for it (the €15,995 includes his margin).

The 2014 model would have been bought last year at €17,400, but probably only got €14,000 trade in value (if you were moving to a 2015 model), so the person would have been looking at paying ~€3,400, so basically depreciation of 19.5% (let's say 20%).

50% isn't right (except maybe for €100,000+ cars, where the people who buy them wouldn't want to disgrace themselves by ever driving something someone else already has, ugh), but I'd imagine it's around 20% depreciation per year.

blackbox

*Kol* wrote: »

Bob has tons of wedge and/or a really good company car deal if he is getting a 7 series every year. Benefit in kind on that makes my eyes water.

BIK depends on value of car. It makes no difference how long you keep it. i.e. there is no additional BIK if you get a new car every year compared to keeping the car for several years unless it is a dearer car.

Back to main topic, I'd guess Bob has an alternative source of funds.

mhackett102

TallGlass wrote: »

Sorry. No way would you get a 2012 Fiesta for 2500. More like 8/9k.

Exactly what my example was trying to prove

Voodoomelon

In fairness, the majority of neighbours, friends of friends etc that are changing their car every year are driving run of the mill, humdrum models, usually in the €15-€25k bracket.

Changing every year probably costs most of them €3000-€5000 a year to do so. Such is the cost of having no NCT, no tyres or servicing and having a brand new fresh, reliable car on your drive.

Whilst there are some people out there doing the same with Audi A6s and 5 Series and other €45-€60k cars, there are a lot fewer of them. And to see it with a flagship is even more unusual. Anyone that i've known over the years with new S-classes, 7 series or A8s keep them for several years and would be a lot less likely to swap every 12 months.

bazz26

Maybe Bob doesn't actually own the car. If he is driving a car like a new 7 Series then maybe his job is at such a level within the company he works for where such a new car every year is a benefit of his job.

Of course Bob could just simply be wealthy too.

BMJD

Bob sells heroin to children outside school on his lunch break.

kikidelvin

access to lots of tax free dosh...............:)

afatbollix

I went down the lease route this year.

It is worth € 39,552.42 new. I pay €275 a month, This includes tax, Servicing and NCT after the two years.

After two years I hand it back and go find another one. I don't have to worry about selling or find a good trade in price.

Currently after two years on auto trader my car is worth €22,500

There is no point in owning something that deprecates. It is worth feck all at the end!

Lombardo86

afatbollix wrote: »

I went down the lease route this year.

It is worth € 39,552.42 new. I pay €275 a month, This includes tax, Servicing and NCT after the two years.

After two years I hand it back and go find another one. I don't have to worry about selling or find a good trade in price.

Currently after two years on auto trader my car is worth €22,500

There is no point in owning something that deprecates. It is worth feck all at the end!

Very interesting actually when you see a real life example. Given you have tax, NCT and servicing already, I have allocated rough figures of:

150 per month * 24 for petrol =

3600

insurance of

1400 (roughly 700 a year for average Joe)

Your actual payments total

6600


If car value is 40k, you have spent 11600 over the two years and the value has depreciated to 22.5k. It seems like in that case you're onto a winner

C0N0R

afatbollix wrote: »

I went down the lease route this year.

It is worth € 39,552.42 new. I pay €275 a month, This includes tax, Servicing and NCT after the two years.

After two years I hand it back and go find another one. I don't have to worry about selling or find a good trade in price.

Currently after two years on auto trader my car is worth €22,500

There is no point in owning something that deprecates. It is worth feck all at the end!

No deposit required?

ironclaw

I'd make the opposite argument, and its just a point of view, that I'd rather have an asset in my front driveway than something I don't own. If, in the morning, I'd needed a lump of cash. I can cash out the car, even at a fire sale price and have access to the funds. I can't if I don't own the car. Also, if the job is gone tomorrow and I can't make the repayments, its irrelevant for the car outside and my credit isn't affected.

Some things are better on credit, like a house mortgage, but I feel Ireland is slipping the way of America / Celtic Tiger by upping our personal credit liabilities. The reality is very few people here can afford the higher end models, leased or owned, but we have an obsession here to 'having to have one' to keep up with the neighbours etc.

I do of course acknowledge the benefits of having zero liabilities in terms of NCT, service etc. That is attractive.

BMJD

ironclaw wrote: »

I'd make the opposite argument, and its just a point of view, that I'd rather have an asset in my front driveway than something I don't own. If, in the morning, I'd needed a lump of cash. I can cash out the car, even at a fire sale price and have access to the funds. I can't if I don't own the car. Also, if the job is gone tomorrow and I can't make the repayments, its irrelevant for the car outside and my credit isn't affected.

Some things are better on credit, like a house mortgage, but I feel Ireland is slipping the way of America / Celtic Tiger by upping our personal credit liabilities. The reality is very few people here can afford the higher end models, leased or owned, but we have an obsession here to 'having to have one' to keep up with the neighbours etc.

I do of course acknowledge the benefits of having zero liabilities in terms of NCT, service etc. That is attractive.

that scenario is entirely dependent on how you paid for the car in the first place though; if it's bangernomics then that's grand but if you spent a large chunk of savings on it then it isn't as clear cut

afatbollix

C0N0R wrote: »

No deposit required?

€2k So still quids in.

I'm happy and that's the main thing.

Toyotafanboi

afatbollix wrote: »

€2k So still quids in.

I'm happy and that's the main thing.

that's a slight omission :P

still, your car is worth €40k new, you picked it up brand new for €2k up front and you have €6600 to pay back over two years, €8600 all in.

your car is worth an estimated €23k after 2 years, but €40k - €8.6k = €31.4k.

either your estimated future value of your car is very wrong or this company are making huge losses assuming they sell after 2 years.