Trying to understand car cost inflation

loco_scolo

So I bought a 2018 Octavia Estate in 2021, when it was 3 years old. Bought it from a reputable dealer in Dublin. They had imported it from Northern Ireland and the spec was very good (half leather seats, "Style" trims, low mileage, automatic 1.5 petrol). I paid €22,000 for it, or €20,000 less €2,000 scrappage for my old car.

The same car today is closer to €30,000 which is 40% inflation. On the other side, my car would probably sell for €18,000 today so it hasn't lost much value, however trade-in offers are appalling at closer to €12-13,000.

It's hard to make sense of this. And I was hoping to upgrade to a Skoda Karoq, which is pricing close to €50,000 for new, or €40,000 for a 3 year old.

I feel like I'm making a terrible investment if I upgrade, so any advice or thoughts, please share...

Whatwicklow

If looked at as an investment, a car is nearly always a sh1tty one.

If there is nothing wrong with your car, and it's still suitable for you, why change?

loco_scolo

https://www.boards.ie/discussion/comment/123262960#Comment_123262960

I guess "investment" is the wrong word. I know a car is not an investment. I was hoping to upgrade every 3 or 4 years to a new 3year old, to avoid dealing with maintenance.

It just seems like the effective annual depreciation on a car has doubled in 4 years, which doesn't make any sense to me.

Buddy Bubs

If a new Karoq costs 50k and you get 18k for yours, it's 32k to come up 7 years which is 4.5k a year plus it's to an SUV which are always a bit more expensive than an estate. I bet you'll get a better price moving to another octavia.

I actually don't see this as a particularly poor deal, changing cars is always expensive. I think 50k for a Karoq is nuts though, I think there's so much better out there for 50k

If you take the 13k trade in it's 37k to come up 7 years or 5.3k a year or thereabouts

Whatwicklow

OK, I understand and agree, it's bonkers.

Personally, I just can't see any value in cars at that price range. Dealers compress them into affordable monthly payments and purple lose sight of the actual cost.

If cash spent on maintenance is the main concern then it's still going to be less than repayments and depreciation on a newer car.

That's my thruppence👍

loco_scolo

https://www.boards.ie/discussion/comment/123262969#Comment_123262969

That's super helpful thank you. Some basic math to compare options is exactly what I needed. Basically it's 5.3k a year to move up to a new Karoq or 4.1k a year for a new Octavia, assuming 50k / 42k cost and 13k trade-in.

As you say, it doesn't seem like a particularly poor deal from that point of view. But also agree that 50k for a new Karoq is insanity, which is why I've been scratching my head about this.

loco_scolo

https://www.boards.ie/discussion/comment/123262970#Comment_123262970

I guess my main concern has been "future value" of a trade-in. It seems impossible to justify prices up to 50k, but I think I need to assess it like @Buddy Bubs suggests. The cost 'right now' of moving up X years.

And my main concern is more the time and effort of maintenance. I work 12-14hr days during the week, so the last thing I want to worry about, when I'm not working, is a broken car.

freddieot

I had a new kodiaq a few years ago , great car. However, I think a lot of Skoda models are poor value these days when compared with competition. Check out Kia, Hyundai instead. Also getting dearer just like others but still far better bang for buck.

Busman Paddy Lasty

Estates are still value. Seat Leon estate, although smaller than Octavia is approx €33,000 new. There could be Skoda or VW equivalent.

These jacked up hatchbacks branded as SUVs have less cabin and boot space for more money.

CMOTDibbler

https://www.boards.ie/discussion/2058402552/trying-to-understand-car-cost-inflation

I think you may be overstating things a bit. There's only one three year old car matching yours currently on DD and it's selling at €27.9k which is around 27% increase on what yours cost. That's a long way off 40%. And your car was a NI import which was probably a bit cheaper than the average price here at the time, so let's say it's around 25% taking that into account.

Don't get me wrong, it's still significantly higher than the consumer price increase (14.3%) for the same period. Car prices surged during and after Covid and with the Russian invasion of Ukraine. They're only starting to settle down now.

Also checked prices for the Skoda Karoq. Assuming the same engine, there are two 2022 models on sale, one is €35.9k and the other €38k.

bazz26

If the main reason to change car is to avoid spending on maintenance then it is never going to be a wise move no matter how much seems justified. It's an expensive game you will never win.

freddieot

If maintenance and reliability is a high factor in choice then again hard to beat Kia and Hyundai on that as well.

I don't work for them by the way but have had 2 Hyundais and 3 Kias all from new. 7 year warranty on the Kias, 5 on the Hyundais. Changing after max 4 years or 120,000ish. Only problem was dying 12v battery on a Kia, replaced immediately under warranty and without fuss.

They are the only two makes on my radar these days apart from Toyota. Toyota are perhaps marginally better but are also relatively more expensive.

Most of the others you pay more and get less in spec, warranty, expected resale etc.

Check out a 50k Tuscon or Sportage on the websites for example and see what you get for the money and you can spend much less to get a decent vehicle. Compare that to Skoda.

I traded a 3 year old Sorento recently and only lost 24% compared to what I had paid in 2022, if that gives you comfort on keeping value.

loco_scolo

https://www.boards.ie/discussion/comment/123263132#Comment_123263132

I don't see the same example in DD. My exact spec is the Combi Estate, Style version, 1.4petrol automatic, and had 50k km mileage when I bought it.

There is nothing matching my exact spec, but I see 9x examples on DD for automatic 2022 Octavia Style (combi and salloon, petrol, petrol hybrid, and diesel). The 9x options range from €26,975 to €32,900.

If I moved up 4years to a 2022 Karoq for 38k, with 13k trade-in, that's 6k cost per year. Which is even more expensive than moving up 7years to a 2025 Karoq for 50k!!! Prices are crazy.

CMOTDibbler

https://www.boards.ie/discussion/comment/123263268#Comment_123263268

My bad, missed the estate bit and I searched for 1.5l which gave me the results I quoted.

Yeah, trade in prices are ridiculously low. You'd be better off selling privately because as you say, the prices are much better. Also looks like yours would be the only one of its kind on sale. You didn't say what mileage was on it.

loco_scolo

https://www.boards.ie/discussion/comment/123263141#Comment_123263141

It's more the time and effort than cost as such. I just don't want to deal with maintenance and annual NCTs.

https://www.boards.ie/discussion/comment/123263256#Comment_123263256

Thanks a million. I'll definitely consider these other options. A lot of those seem to be petrol-hybrids. I don't know much about them, but I'd be afraid of the cost of replacing batteries down the line which could ding the resale value. The cost of batteries is only going one direction, given the increasing demand for them.

loco_scolo

https://www.boards.ie/discussion/comment/123263295#Comment_123263295

It's just gone past 100k km. Fairly low for a 2018.

dubrov

I can't see anyone paying 40k for a 3 year old car that is 50k new

magicbastarder

https://www.boards.ie/discussion/comment/123263141#Comment_123263141

I'm driving a 2012 Octavia, and maintenance has been less than €500 a year for the last few years (not including tyres which you'd have to deal with on any age car). There's not much of an economic argument to upgrade there. Though I am thinking of trading it in, but specifically to go electric.

CMOTDibbler

https://www.boards.ie/discussion/comment/123263297#Comment_123263297

Cost of batteries is going down steadily. Expected to go below $100/kWh this year.

TheWonderLlama

https://www.boards.ie/discussion/comment/123263065#Comment_123263065

3 major components of the price increase are price of steel, energy and transport. All have gone through the roof in the last 5 years. There are other factors, but these would be the biggest cuplrits.

freddieot

https://www.boards.ie/discussion/comment/123263297#Comment_123263297

He have to feel comfortable with any car you select. I said the same thing about batteries to the dealer when I bought my Kia Sorento PHEV. The answer was just bring it in, you have a 7 year 160k warranty on the car and an 8 year warranty for the battery. It would be their problem, not mine. As said I got a great trade in 3 years later and from a different dealer, Hyundai.

If you keep any car beyond 7 years I expect several things might go wrong but ask yourself why some brands only give 3 years...

MarkN

auto box and ADAS are also contributing. The Irish government are making more revenue from taxing and VRT’ing more due to these higher prices also. Charging us for cars to be safer.

BrianD3

Buy a new Dacia Jogger or new Duster for less than 30k. Sell the Octavia privately.

con___manx1

It doesn't matter about the age of a car its more about the mileage.

A 3 or 4 year old car could have twice the mileage of an 8 year old car for instance.

I bought a 6 year old audi a4 in 2018 with only 60 k kilometers on it for 12 k

If you bought a 6 year old audi today it would be double that.