First car buyer advice

Zergmaster

I've been a lurker of this section for a long time but finally joined just to ask a question (and hope to become part of the community in the process)

As you could guess from the title, I'm interested into buying a car for the first time but I'm a bit lost between the options (as there are so many of them nowadays).

My situation:

Just reached 25,
Have ~15-17k in cash
No NCB, which means that I'm going to pay quite a lot for insurance in the first few years.
As for myself, I'm not a fan of changing cars often (unless it's wise financially to avoid depreciation and increasing servicing costs).

As far as the actual car is concerned, I'm mostly interested in a sedan (Skoda Superb/VW Passat/Audi A4) but I don't want to disqualify hatchbacks at the moment. Those are the options that I'm considering:

1. Buying an almost new car.  (1-2 years old at most) I was considering taking a loan of 10-12k EUR (which would increase my budget to 25-27k EUR) for 3 years which would allow me to get Passat/Superb of the year 2015-2016. For 3 years, I'd have to repay ~350 EUR/month and I'd also get a warranty for ~1-2 years. However, I'm worried about the depreciation and insurance in the long term because I've heard that insurance costs skyrocket after the car passes 10 year old threshold. When would it be wise to sell the car in such case?
 

2. PCP - Sounds like a good option. You can get Superb/Passat/A4 for 3 years for around 330-350 EUR/month with service costs included. I'd be changing cars every 3 years so that means no drastic insurance price increases after 10 years. Sounds good, but I feel very uneasy when I'm at the mercy of VW/Skoda/Audi all the time (in case something bad happens). Moreover, I don't feel well that I have to put a ~10k+ EUR deposit. That increases an actual value of the car and the money I spend on it. Any pitfalls to avoid when looking at PCP deals?

3. Buying a 3-4 year old hatchback. I was considering buying Hyundai I30 (2014-2015) for ~15k EUR. That way, I don't need any loans from the bank. But there is still an issue with depreciation and the fact the car should be sold before it's 10 year old. Sadly, Hyundai is not the most desirable badge to have at that situation so the money I spent will certainly be lost. Moreover, I'd prefer a sedan over a hatchback and as far as I've seen you can't get a decent sedan (2014) for 15k EUR.


Which of the 3 options would be the smartest? What are the pitfalls I should avoid?
Thanks for all the opinions and advice in advance

colm_mcm

You need to get some insurance quotes to start with.
As you're only25, I don't see the point in saddling yourself with a loan.

Zergmaster

I've done that already. The insurance would cost between 2200-2500 for the first year for I30/Superb/Passat and A4. 1400-1500 for the second year, etc. Skoda Octavia (another candidate) is uninsurable for me though.

One of the concerns that I have (I'd say the main one) is the fact that I've heard many times that when car passes 10 year old threshold, insurance prices tend to go up very significantly (in some cases it's twice the price). How much truth is in that?

James Bond Junior

You have quite a nice bundle of cash under your arse at a good age. In the not too distant future you may want to buy a house or get at least a place of your own, if it was me I would buy something in the 7 - 10k range and not blow all your savings and put yourself under pressure to meet a loan or pcp every month. You would probably pick up a nice 12 mondeo or focus for that kind of money. What kind of mileage are you doing?

Zergmaster

James Bond Junior wrote: »

You have quite a nice bundle of cash under your arse at a good age. In the not too distant future you may want to buy a house or get at least a place of your own, if it was me I would buy something in the 7 - 10k range and not blow all your savings and put yourself under pressure to meet a loan or pcp every month. You would probably pick up a nice 12 mondeo or focus for that kind of money. What kind of mileage are you doing?

It's around 20k+ km/year. So I think that the diesel makes more sense for me.

James Bond Junior

Diesel territory but all the more reason to buy a slightly older cheaper car. You will be slaughtered in depreciation on a newer car whereas something a little older would soften the blow hugely.

Dia1988

My piece of advice is to at least half your budget to 7 or 8k.

It's your first car and it's a costly affair between insurance fuel servicing etc, even if you spend 15k on a 2015 car.

A 2010 car for 8k would actually be more cost effective as it would depreciate less than the 15k 2015 car.

What's important is how much mileage you do and if you should get a petrol or diesel.

Have a look at a 2010 VW Jetta or an Octavia in high spec

Zergmaster

James Bond Junior wrote: »

Diesel territory but all the more reason to buy a slightly older cheaper car. You will be slaughtered in depreciation on a newer car whereas something a little older would soften the blow hugely.

I was considering that as well, what about the servicing costs? I've heard they're quite expensive and if something breaks down (transmission), fixing it might be very costly.
From my perspective, I've got 3 main concerns:
1. Depreciation
2. Insurance when car reaches 10 years of age.
3. Servicing costs. How much would it cost per year (on average) as older cars tend to break down more often.

Zergmaster

Dia1988 wrote: »

My piece of advice is to at least half your budget to 7 or 8k.

It's your first car and it's a costly affair between insurance fuel servicing etc, even if you spend 15k on a 2015 car.

A 2010 car for 8k would actually be more cost effective as it would depreciate less than the 15k 2015 car.

What's important is how much mileage you do and if you should get a petrol or diesel.

Have a look at a 2010 VW Jetta or an Octavia in high spec

When I initially started looking for the car, I was looking for something around 2010-2012. The problem is that in case of Octavia, I can't get insurance for it (I don't get why) and ofc, it worries me a lot that if I buy something from 2010, I'll be able to use the car only for ~3 years until the insurance prices skyrocket due to the fact that the car is older than 10 years.
How does insurance work? When do cars become impossible/very expensive to insure?

Dia1988

Zergmaster wrote: »

When I initially started looking for the car, I was looking for something around 2010-2012. The problem is that in case of Octavia, I can't get insurance for it (I don't get why) and ofc, it worries me a lot that if I buy something from 2010, I'll be able to use the car only for ~3 years until the insurance prices skyrocket due to the fact that the car is older than 10 years.
How does insurance work? When do cars become impossible/very expensive to insure?

The insurance market is very unpredictable when estimating quotes for future years.

Why not compare insurance quotes from the same insurance company between a 2007 car and a 2010 car with the same engine/power and see if it "skyrockets"

Insurance premiums skyrocket regardless of the age of the car, however 15 year old cars are the difficult ones to insure.

Zergmaster

Dia1988 wrote: »

Zergmaster wrote: »

When I initially started looking for the car, I was looking for something around 2010-2012. The problem is that in case of Octavia, I can't get insurance for it (I don't get why) and ofc, it worries me a lot that if I buy something from 2010, I'll be able to use the car only for ~3 years until the insurance prices skyrocket due to the fact that the car is older than 10 years.
How does insurance work? When do cars become impossible/very expensive to insure?

The insurance market is very unpredictable when estimating quotes for future years.

Why not compare insurance quotes from the same insurance company between a 2007 car and a 2010 car with the same engine/power and see if it "skyrockets"

Insurance premiums skyrocket regardless of the age of the car, however 15 year old cars are the difficult ones to insure.

I see, so that threshold is more around 15 year mark than 10 year one.
Another question: What about servicing costs? The older the car is, the more money you need to service it. Which cars have the lowest spare part/servicing costs?
I suspect that Skoda parts should be cheap, VW could be a bit more pricey and Audi parts should be quite expensive. Any tips from your experience?

lyes

Hi there,
Did the online quote and it doesn't work, Went to AXA and AVIVA to have a quote and they refused to assure me as I don't have 1year driving experience, Here is a big picture about my selfe:
I have a full driving license from North Africa since 2007, a learner Irish permit since 2016 and I nearly pass my driving test to get my full Irish permit to drive category B.
I am lost, my child will soon go to the crèche and with work need a car to manage.
I would like to know if there is a way to assure a care, and if yes how much will it cost for a 1.2 litter 2007?
Thank you

lyes

Hi there,
Did the online quote and it doesn't work, Went to AXA and AVIVA to have a quote and they refused to assure me as I don't have 1year driving experience, Here is a big picture about my selfe:
I have a full driving license from North Africa since 2007, a learner Irish permit since 2016 and I nearly pass my driving test to get my full Irish permit to drive category B.
I am lost, my child will soon go to the crèche and with work need a car to manage.
I would like to know if there is a way to assure a care, and if yes how much will it cost for a 1.2 litter 2007?
Thank you