Bangernomics verses New Cars

[Condi]

Salary sacrifice and company cars are often good value;

Lad at work takes his cash payment instead of the company car and runs as 12 year old BMW 5 series. Recently on a trip to france the alternator gave up. Cost him about 2.5k by the time it was recovered, repaired, he had made alternative travel arrangements. That is pretty much all his yearly cash alternative.

Another lad had his flywheel go on his company car at 7pm one evening. By 10am next morning they had picked it up, dropped off a replacement car, and within a week his was repaired and delivered back to him. Cost him nothing.


The 'hassle factor' has to worth something, and when the difference between a salary sacrifice and running your own is marginal then I dont think it makes sense not to.

[CorbynFTW]

My place does a SS scheme - all bar fuel is included, no up front payment and if I get made redundant I hand it back


Toying with it, I could have an UP! for ~£115/mth on 9k.

Not too bad if you want easy, white good motoring.

Quite a few marques available too.

[Nickbrapp]

Just bloody do it. It's only money you can't take with you when you die. I have a company car. I got sick of driving it and only it, so ive just bought a brand new fiesta St. Yes it costs me £220 a month with insurance etc but I don't care, yes that's 2000 a year I could be sticking in savings, but saving for what? I have a house. Il be working for the next 45 years. Who cares. Others will be smug in running a old car, I didn't want a old car.

Do what you want. Money is money no point in working for nothing.

[Digby]

I did 12k a year on the Audi, so it could have worked out a little cheaper for less.That said, you can go over and just pay a bit more at the end of the term.

The basic A1 TD 2 door, or 4 door sportback, came in at around 260 pm inc I believe with a choice of standard colours and no options ticked.

[TheAngryDog]

Nickbrapp said:

Just bloody do it. It's only money you can't take with you when you die. I have a company car. I got sick of driving it and only it, so ive just bought a brand new fiesta St. Yes it costs me £220 a month with insurance etc but I don't care, yes that's 2000 a year I could be sticking in savings, but saving for what? I have a house. Il be working for the next 45 years. Who cares. Others will be smug in running a old car, I didn't want a old car.

Do what you want. Money is money no point in working for nothing.

Not all of us want new cars or to be saddled with monthly payments. I'd rather the 14 year old M5 I am getting next week over your new fiesta St any day of the week.

[brickwall]

I have often pondered this question. I run a BMW 745i, another car not famed for being wallet-friendly.

In my first year of ownership, it has cost me approximately £3.5k:
- £900 in tax and insurance
- £600 in fuel
- £2k in maintenance

If I were to sell it now, I guess I'd probably get near-as-damnit what I paid for it, so no cost there.

If I leased, my tax and insurance costs might decrease to £500, and fuel spend might decrease to £300. So I'd save £700, in addition to the £2k on maintenance.

But what could I get for my £2.7k? That would cover me to lease a BMW 318i. And I'd be tied in for 2 years. For the same money I get a 330bhp V8, with seats that adjust in 20 different ways.

Leasing makes sense if:
- You have a very high personal WACC
- You value the predictability of a fixed monthly payment, and don't mind being tied into it for a long time.
- You want a new car for the warranty, reliability and peace-of-mind it brings
- You plan to keep cars 2-3 years
- You do medium-high miles, and therefore want a low variable cost

I fit almost none of these criteria, but I absolutely could see a situation where I might in the future. Let's say I had a young family, a bit mortgage but a reasonably stable job. In that scenario I almost certainly probably would lease. But I'm not - and my circumstances fit the criteria below.

Owning makes sense if:
- You have low personal finance costs
- You do low mileage
- You want the flexibility to chop and change as you please (perhaps it's every 6 years, perhaps it's 6 months)
- You don't want to be tied into a future set of payments

[TarpaTow]

Nickbrapp said:

Just bloody do it. It's only money you can't take with you when you die. I have a company car. I got sick of driving it and only it, so ive just bought a brand new fiesta St. Yes it costs me £220 a month with insurance etc but I don't care, yes that's 2000 a year I could be sticking in savings, but saving for what? I have a house. Il be working for the next 45 years. Who cares. Others will be smug in running a old car, I didn't want a old car.

Do what you want. Money is money no point in working for nothing.

I agree with you to a point, 'cos you've also got the image thing as well, people will have a different view on you in your new car. I don't know what you do, but I'm in Finance and it's important people have a good impression of you in the business world.

But a Fiesta? You should have gone for a prestige brand like BMW or Audi. That way, you get all get benefits of buying in to the brand, the ultimate driving experience, a decent high performance new car and all the advantages that go with the image.

What's better, rocking up in a Fiesta or a BM.

[Condi]

TarpaTow said:

I agree with you to a point, 'cos you've also got the image thing as well, people will have a different view on you in your new car. I don't know what you do, but I'm in Finance and it's important people have a good impression of you in the business world.

But a Fiesta? You should have gone for a prestige brand like BMW or Audi. That way, you get all get benefits of buying in to the brand, the ultimate driving experience, a decent high performance new car and all the advantages that go with the image.

What's better, rocking up in a Fiesta or a BM.

Wow. st post of the month goes to.... Tarpa Tow. Neither bog standard Audi's, nor BMW's are 'ultimate driving experiences', nor are they 'high performance'. And as for 'buying into the brand' I know people do it subconsciously, but nobody goes out and deliberately buys a BMW because of the image it presents. For most people, BMW = company car; probably not the image you think/hope it puts out!

[Nickbrapp]

TarpaTow said:

I agree with you to a point, 'cos you've also got the image thing as well, people will have a different view on you in your new car. I don't know what you do, but I'm in Finance and it's important people have a good impression of you in the business world.

But a Fiesta? You should have gone for a prestige brand like BMW or Audi. That way, you get all get benefits of buying in to the brand, the ultimate driving experience, a decent high performance new car and all the advantages that go with the image.

What's better, rocking up in a Fiesta or a BM.

not sure if serious.


i still have a company car. why would i care a single bit what anyone else thinks about me or the car i drive?


the problem with a 14 year old M5, its a £60k car, and it will still throw a 60k cars bills. plus i dont want a old bmw.

[SidewaysSi]

TarpaTow said:

Nickbrapp said:

Just bloody do it. It's only money you can't take with you when you die. I have a company car. I got sick of driving it and only it, so ive just bought a brand new fiesta St. Yes it costs me £220 a month with insurance etc but I don't care, yes that's 2000 a year I could be sticking in savings, but saving for what? I have a house. Il be working for the next 45 years. Who cares. Others will be smug in running a old car, I didn't want a old car.

Do what you want. Money is money no point in working for nothing.

I agree with you to a point, 'cos you've also got the image thing as well, people will have a different view on you in your new car. I don't know what you do, but I'm in Finance and it's important people have a good impression of you in the business world.

But a Fiesta? You should have gone for a prestige brand like BMW or Audi. That way, you get all get benefits of buying in to the brand, the ultimate driving experience, a decent high performance new car and all the advantages that go with the image.

What's better, rocking up in a Fiesta or a BM.

Buying into what brand? Ultimate driving experience?!! Are you having a laugh?

High performance new car? For the same monthly as an ST? I think not.

And what advantages go with this image you mention?

I work in Finance and couldn't given a flying fk what people think of what I drive.

[TwigtheWonderkid]

Bonefish Blues said:

Yep, and note that it will ramp up each tax year.

BIK will actually drop next year when they remove the 3% diesel surcharge.

[TheAngryDog]

Nickbrapp said:

the problem with a 14 year old M5, its a £60k car, and it will still throw a 60k cars bills. plus i dont want a old bmw.

That is a risk, and a risk I am prepared to take. It is a fine line and always will be between owning and leasing. Leasing will at point outstrip owning massively to the point were only the top earners own, and everyone else leases, with eventual reduced lease cost for leasing a "second hand car" (this may even already exist?) and so on and so on. One day it'll probably be the way for me to go, but right now I like the thought of owning a car like that, plus I cannot afford / justify leasing something like a F10 M5 / Audi RS6.

[the-photographer]

Is there a middle ground? My example;

Golf GTI (2006) purchased in October 2010 for £12,000 (first flaw, that's a big "deposit" or loan) with 6000 miles.

Sold 4.5 years later in May 2015 for £5500, a loss of £6500 or £1400 a year.

Should work again on anything with a high residual.

[JumboBeef]

the-photographer said:

Sold 4.5 years later in May 2015 for £5500, a loss of £6500 or £1400 a year.

You've not included any of the other costs.

[lord trumpton]

I think the bangernomics argument is only really a financially viable one if you are a bit tasty with the tools and maybe be prepared to do basic maintenance and stuff like brakes etc.

Having owned (and loved) a good few 'older' M cars its really easy for them to become a wallet opener.

I would say its more expensive to run an e39 M5 today than it was 15 years ago. All the big ticket items tend to stay well behaved for the first 3 years so the first owner or two just have to live with the fuel, tax and dealer servicing costs.

In todays age then the E39 will likely be suffering from rust, maybe vanos issues, maybe top mounts, maybe need new shocks and bushes, maybe need control arms, corroded bolts, previous accident damage or poor repairs.

I personally couldn't run an e39 as a daily purely because i would refuse to keep opening the wallet. I prefer a newer car for daily life and perhaps something like a 997 or e39/e36/e46 M derivative as a tinkering toy.

For most, nay the majority of todays drivers, getting a car on the drip suits them well - known costs, minimal servicing and hand back after 3 years.

[gizlaroc]

The only way to really make it cheaper is swap an old car that does 25mpg for something that does 45-50mpg.

I did that and on my 20k miles a year I have gone from putting in £320 a month in fuel to £170.

I had done quite a few bits on my old 2002 ML to make sure it didn't ever let me down and because I don't want all suspension and bushes etc. Probably spent around £60 a month on upkeep on the old one.

Tax is £20 a month cheaper.

So a saving of £230 by going newer.

I could have got into a Skoda Yeti for £180 a month all in and actually saved some money each month, but I went with a very nicely specced year old BMW X3 for £305 a month. So it is costing me around £75 a month more. It is worth that for an easy life and peace of mind to be honest.

[the-photographer]

JumboBeef said:

the-photographer said:

Sold 4.5 years later in May 2015 for £5500, a loss of £6500 or £1400 a year.

You've not included any of the other costs.

Ah yes another possible flaw;

Regular servicing at £200 / £400 for 60,000 miles = £1800
Tyres, sorry no records, estimate 5 x 2 for fronts and 2 x 2 for rears = £1050 (£75 per tyre)
Road tax £1125

[Bonefish Blues]

TwigtheWonderkid said:

Bonefish Blues said:

Yep, and note that it will ramp up each tax year.

BIK will actually drop next year when they remove the 3% diesel surcharge.

Yep, you're right, it does, and then re-starts its inexorable rise

[Zoobeef]

My A4 estate cost me £2000 2 years ago this week. It's gone from 158k to 213k in that time and not including tax, insurance and fuel has cost me £1165.21
That includes 8 tyres and 6 services inc a cambelt one.

I doubt you could beat that on a new car and as the years go by the original cost will spread to more thinly.

[gizlaroc]

Zoobeef said:

My A4 estate cost me £2000 2 years ago this week. It's gone from 158k to 213k in that time and not including tax, insurance and fuel has cost me £1165.21
That includes 8 tyres and 6 services inc a cambelt one.

I doubt you could beat that on a new car and as the years go by the original cost will spread to more thinly.

I should just add, although I have a nearly new X3 at £300 a month, I also have a 2006 A4 2.0T S-Line avant that cost me £3600 cash.

I think you can do both, but the gap between buying new or nearly new and buying older to save money now means buying much older, like a 10 year old car. I think the days of buying 3-6 year old cars to save money are long gone.