Best way to calculate value for money of new vs used

veryangryman

Personally I always buy new. I know they're crazy expensive and the immediate depreciation is awful. However... with the following.

3 years free servicing
Warranty
The newness of the parts so replacements not needed as often
Minimal risk of breaking down
Cheaper Motor Tax

I personally pay the extra as i can't stand a mechanical failure. I think that the constant need for maintenance of older cars, plus the incremental cost of keeping them on the road plus their tax puts me off.

Anyway, is there any mathematical calculator (not from Renault etc, a neutral one) to help one do a reckoner of what is better value. Of course not just monetarily

ironclaw

Depends on your definition of 'value'.

To me, what you are doing, is not good value as you're making a huge financial loss before you even drive the thing. The rough rate for cars is 20% per year. So if you drop 50k on a car today, this time next year its worth €40k.

10k would get you an awful lot of servicing and tax on a car even 10 years older. I drive a 2007 3.0L car. The tax is €1,494 per year and fuel is about 60EUR a week. So €4614 for the year. Insurance, 1300EUR, so we're up to ~5900EUR. I'm still lost 4100EUR less than you and I've actually driven the car. Your 'loss' starts at 10kEUR and you have to add to it.

I elected to do some major maintenance this year and some tuning, I don't have the receipts to hand but its about €4k. So lets square away a loss of €10k for the year for me.

I can sell that car, all day long, for between 7.5k and 10kEUR, which is about the same I bought it for given its a rare item in the UK and Irish market.

So, if we both started on the same day with both options and exactly a year later we could sell, I'd be better off than you at the end of the year. This will always be true if you buy new, assuming the contrasting second hand car you buy isn't a money pit and you put due diligence into it. My example is skewed as its a red flag in all areas e.g. tax, insurance and elective maintenance. If you contrasted to a 'normal' car, the gap between you and myself would be larger.

Arthur Daley

ironclaw wrote: »

Depends on your definition of 'value'.

I can sell that car, all day long, for between 7.5k and 10kEUR, which is about the same I bought it for given its a rare item in the UK and Irish market

I would say that would not be a typical experience/valuation for 10 year old 3 litres in this country. They are almost all heavily discounted to peanuts when people see €1,500 tax and now insurers are hammering 10 year old cars to boot.

Wildcard7

veryangryman wrote: »

I personally pay the extra as i can't stand a mechanical failure. I think that the constant need for maintenance of older cars, plus the incremental cost of keeping them on the road plus their tax puts me off.

I never bought new cars. My first car was horrible (I was young and stupid), and that taught me - just like you - that I hate when my car doesn't work.

Since then I had 3 japanese cars, that I bought after a lot of research. One Subaru, two Toyotas. Bought each of them between 20-50k km, and drove them until around 120k km. My current car is nearing this mark, and I'll drive it until at least 200k km (unless I spontaneously become rich).

One of these three cars had a problem that needed roadside assistance (they were able to fix it in half an hour by replacing a wire). Apart from that none of them ever had to stop by a garage outside of the yearly service window. No "constant need for maintenance", unless you mean the odd replacement of a shock or a brake pad.

Buying a new car gives you the benefit of a long warranty, so anything that happens in that time is covered. That doesn't save you the hassle though. On the other hand, buying an older car gives you the ability to research how solid this car is. When I buy a 7 year old car I can look into that, see that there are cars with >250k km still going strong, can see them in the top tiers of breakdown statistics, and can read long term experiences of other drivers. And if there are/were any common faults with this car, chances are they either already have been fixed through a recall, or the garage knows exactly what to do. No leaving the brand new car in the garage for some weird electrical problem that they can't figure out.

When I buy a brand new car, that's a new model or a new version (with new engine, transmission etc), I'm buying a surprise package.

veryangryman wrote: »

Anyway, is there any mathematical calculator (not from Renault etc, a neutral one) to help one do a reckoner of what is better value. Of course not just monetarily

I doubt it. For calculations, see the rule of thumb of 20% depreciation. Everything else depends very much on the car model. You won't find a calculator for anything but the monetary side.

veryangryman

veryangryman wrote: »

..............

Anyway, is there any mathematical calculator (not from Renault etc, a neutral one) to help one do a reckoner of what is better value. Of course not just monetarily

Well a 2.0 decent spec diesel Passat would be about €37k. Over 3 years I would think you'd experience at least €15k in depreciation.

A 3 year old one from a main dealer with reasonably miles (60k miles) would be landed for about €22k. Over 3 years I would think you'd experience at least €10k in depreciation.


A 6 year old one from a main dealer with reasonably miles (100k miles) would be landed for about €13k. Over 3 years I would think you'd experience at least €7k in depreciation.

Tyre wear on all 3 should be much the same, servicing should be more on the older ones as you'll need pads, discs, maybe a timing belt kit, bit of suspension etc every now and than.

Hard to find a ready reckoner on value that includes not just monetary concerns.

I'd think buying a very very clean 3 year old car would be the best balance tbh. €15k lower initial cost and €5k less depreciation. It's having less money tied up. The actual extra cost of the new car per annum isn't huge to be honest.

Teddington Cuddlesworth

I love that more people are buying new cars.
5k has been the budget for the last 3 cars I've bought, granted, they haven't been the typical sort of car the majority of Irish people would buy.
I replace my car every year and of those 3 I've never suffered more than 800 Euro in depreciation.
None of the 3 have ever broken down.
I only serviced one of those 3 so costs were minimal, aside from tax which is typically 1000 - 1500.

The more people that buy new cars, the more choice there is for me. The more choice there is for me means the less I pay.