2006 v 2008 Tax advice help. (Golf / Octavia)

errlloyd

I am really stuck on this. I want to buy a diesel, 1.9 Golf / Octavia type car. The tax change in 2008 means the tax is a lot lower on 08, and I am wondering how much that is actually worth.

If I can get an 06 for 4,000 and an 08 for 6,500 which should I go for?

duffman3833

depends on the mileage you do and how long you plan on keeping the car

errlloyd

Probably wanna keep the car 4 years or more, not too fussed. Probably gonna do 15000km a year. If that helps

colm_mcm

I'd say the 08 would make more sense as it will be miles easier to sell in 4 years. It will be nearly 10 years old at that stage and the other one will be a 12 year old car with relatively high tax compared to most cars on sale.
That said, an 08 golf for €6500 would be on the low end of the market and mightn't be a great example.


You can check the tax rates for a car by the reg number on motortax.ie

duffman3833

well over 4 years the difference in the road tax alone is about 1500. The 08 might hold its value better but it all depends on the car and the condition etc.

George Dalton

I'd be pretty wary of any €6500 2008 Golf TDI. If you buy a bad example it will cost you far more than the few hundred a year you save on road tax.

It always amazes me how people get so hung up on road tax costs when in the vast majority of cases they are only a small percentage of the overall annual costs of running a car.

errlloyd

George Dalton wrote: »

I'd be pretty wary of any €6500 2008 Golf TDI. If you buy a bad example it will cost you far more than the few hundred a year you save on road tax.

It always amazes me how people get so hung up on road tax costs when in the vast majority of cases they are only a small percentage of the overall annual costs of running a car.

This was my position too, until this week. I was looking at a 4k car (it was actually a Leon, not a golf but it was being sold on adverts so I decided to say golf), which I intended on owning for 5 years. The tax was gonna be 700 quid! It was a huge percentage of the annual running costs, and something that is very controllable (I can get a car with 10% better or worse MPG, or 20% better or worse insurance, but I can find many similar cars with 50% less tax).

That's what made the decision so hard.

acronym Chilli

errlloyd wrote: »

This was my position too, until this week. I was looking at a 4k car (it was actually a Leon, not a golf but it was being sold on adverts so I decided to say golf), which I intended on owning for 5 years. The tax was gonna be 700 quid! It was a huge percentage of the annual running costs, and something that is very controllable (I can get a car with 10% better or worse MPG, or 20% better or worse insurance, but I can find many similar cars with 50% less tax).

That's what made the decision so hard.

The anecdote would have more force if you put some numbers behind it. What I'll say is that 20% saved off a big number is often more significant than 50% saved off a small number.

Furthermore, when we're looking at old/new cars and the tax, the elephant in the room is depreciation. If the old car is far enough down on the depreciation curve, then the figure can be very significant. And it is certainly possible to find a car with 100% less depreciation than another (or infinity % more).

My own numerical example: bought a 2000 Fiat Punto in 2010 for €1200, sold it in 2015 for €900 after 3 days on done-deal, annual depreciation cost was about €60 or a little over €1 per week. Not only that, but when buying it I knew I couldn't ever lose more than €1200 on depreciation. That said, it had higher tax than you'd expect for such a small car since the 1.2l engine and pre 2008 tax prejudice the number (€351 most recently, I think). I've found it hard to find cars with less than zero road-tax.

errlloyd

acronym Chilli wrote: »

The anecdote would have more force if you put some numbers behind it. What I'll say is that 20% saved off a big number is often more significant than 50% saved off a small number.

Furthermore, when we're looking at old/new cars and the tax, the elephant in the room is depreciation. If the old car is far enough down on the depreciation curve, then the figure can be very significant. And it is certainly possible to find a car with 100% less depreciation than another (or infinity % more).

My own numerical example: bought a 2000 Fiat Punto in 2010 for €1200, sold it in 2015 for €900 after 3 days on done-deal, annual depreciation cost was about €60 or a little over €1 per week. Not only that, but when buying it I knew I couldn't ever lose more than €1200 on depreciation. That said, it had higher tax than you'd expect for such a small car since the 1.2l engine and pre 2008 tax prejudice the number (€351 most recently, I think). I've found it hard to find cars with less than zero road-tax.

That is a perfectly reasonable point apologies for not getting back to it sooner.

The car was 2006 4,000 euro, 1.9 TDI, about 100k miles. Tax was 673e a year. MPG of that sort of car new was good enough, I think about 57 MPG on diesel. I probably intend on driving around 10,000 miles a year max, that's if work continues their trend of sending me to nowhere. So imagine I'd get 40 MPG on average (I do a lot of city driving and I'm not about to pretend that I drive economically all the time, bad habits are hard to kill).

In contrast you have two other options say you pay a similar price to get a 1.4 Petrol. Or you pay a good bit more and get a diesel two years newer. Let's knock those out on a spreadsheet first of all.



*Figures are displayed as rounded, but calculated to several decimal places for the purpose of forumals. Insurance would vary, but is a bitch to get an actual quote on. MPG figure courtesy of Honest John and definitely not Volkswagen!

So the cheap older diesel works out the cheapest over 5 years. The question is at the end 5 years is it completely worthless? 1.9 car, who's tax is the better part of 800 euro, and an engine that a new driver would possibly not get insured on? Who is actually going to buy it.

In contrast, the 08 will be two years younger, have much cheaper tax and may have some appeal to someone who needed a reasonably cheap to run cheap to buy vehicle to flog. The petrol is the most expensive over 5 years, and is probably somewhere in between on resale value, but may require less servicing?

What I really need advice on is the resale value, as you said, depreciation is key. Effectively my year 5 costs will be what it has in the 5 row on the table there, less whatever I can sell it or trade it in for. That is a complete unknown to me.

acronym Chilli

V good post.I don't have an answer to your dilemma, but I'm interested to give it some thought (and hear other posters' opinions)