Bangernomics verses New Cars
Discussion
I've spent my whole driving life being smart. I've never had a new car because, as everyone knows, they are a waste of money. Oh how I've laughed at those people who pay hundreds each month, and never own their car. How I've chuckled at drivers whose cars loose thousands in value each year. How I've nodded in a old sage way at youngsters driving around proud in the latest model, knowing their new car will soon go out of date so save your money and buy one already out of date.
The two of us have two cars, bought and paid for. A 13 year old Golf and a 17 year old Volvo V70. Both bought and paid for, and costing us peanuts.
Sure, there are maintenance costs. Repairs. MOT costs. But I'm still winning. Right?
The Golf is showing its age, and will need to be replaced soon. The central locking is playing up. It's become incontinent since having a new windscreen. First gear expects to be wined and dined before you are allowed access: no just banging it in there without a thought to it's feelings.
The Volvo will go forever. If ever we have a nuclear holocaust there'll will only two things left moving on the earth, cockroaches and old V70s.
My employer has recently started a new car salary sacrifice scheme. Get a new car every two or three years. In an idle moment, went in and had a look at the deals on the app. As we need to look at replacing the Golf, I thought I'd have a look at how much a new one would be. The GTD looks nice. Sporty yet practical. Very shiny. Tapped in a few details and one over two years, no deposit with everything included except fuel and a 15,000 mile allowance each year comes to £320 per month.
Oh yes, very nice, I thought over my coffee. My old Golf costs nothing. And that's £320 each and every month for the pleasure of driving a new car. I don't even know anyone called Jones, let alone having any wish to keep up with them.
Ok, do I pay about £20 each month for road tax. And about £20 for insurance. So that brings the £320 down to £280 as these costs are included. Still £280 wasted. Smugness resumed.
Slight wobble when I consider that a GTD is more efficient than the old Golf. Maybe I'll save a bit on fuel each month, but no more than say a tenner or so a week. So £280 becomes about £235.
I'm sitting here typing this while I get a puncture repaired for the bargain price of £25. That's a cost I wouldn't have to pay on a new car, and it gets me thinking about all the other costs that add up. Repairs over the last couple of years must be more than a couple of grand (not helped by having to do the clutch and flywheel). So let's knock a hundred off each month.
That brings it down to £135 per month.
Then of course there is depreciation. Even a banger looses money. A £1,500 car might/will suffer a breakdown at some point which is uneconomic to repair. Say you get £200 spares or repair, that's £1,200 lost over three years (could be more, or less but I think that figure and time scale sounds about right). £400 per year brings the total cost of a new car to £100 a month.
£100 per month. For a brand new shiny, won't breakdown, comfortable, modern mode of transport with lots of modern features my older cars don't have.
Have I been wrong all along? Swap one takeaway per week for a brand new car? Maybe I'm the fool, and all those people who are driving their new cars are the smug ones.
I can see from the app I could have a Golf R for just £80 more per month. Only £40 per week, to trade in an asthmatic 13 year old Golf for a brand new Golf R.
Am I missing something here? Why would anyone (like me, D'oh!) continue to drive an old banger when a new car is only the cost of a takeaway each week?
or
(Other takeaways and cars are available).
The two of us have two cars, bought and paid for. A 13 year old Golf and a 17 year old Volvo V70. Both bought and paid for, and costing us peanuts.
Sure, there are maintenance costs. Repairs. MOT costs. But I'm still winning. Right?
The Golf is showing its age, and will need to be replaced soon. The central locking is playing up. It's become incontinent since having a new windscreen. First gear expects to be wined and dined before you are allowed access: no just banging it in there without a thought to it's feelings.
The Volvo will go forever. If ever we have a nuclear holocaust there'll will only two things left moving on the earth, cockroaches and old V70s.
My employer has recently started a new car salary sacrifice scheme. Get a new car every two or three years. In an idle moment, went in and had a look at the deals on the app. As we need to look at replacing the Golf, I thought I'd have a look at how much a new one would be. The GTD looks nice. Sporty yet practical. Very shiny. Tapped in a few details and one over two years, no deposit with everything included except fuel and a 15,000 mile allowance each year comes to £320 per month.
Oh yes, very nice, I thought over my coffee. My old Golf costs nothing. And that's £320 each and every month for the pleasure of driving a new car. I don't even know anyone called Jones, let alone having any wish to keep up with them.
Ok, do I pay about £20 each month for road tax. And about £20 for insurance. So that brings the £320 down to £280 as these costs are included. Still £280 wasted. Smugness resumed.
Slight wobble when I consider that a GTD is more efficient than the old Golf. Maybe I'll save a bit on fuel each month, but no more than say a tenner or so a week. So £280 becomes about £235.
I'm sitting here typing this while I get a puncture repaired for the bargain price of £25. That's a cost I wouldn't have to pay on a new car, and it gets me thinking about all the other costs that add up. Repairs over the last couple of years must be more than a couple of grand (not helped by having to do the clutch and flywheel). So let's knock a hundred off each month.
That brings it down to £135 per month.
Then of course there is depreciation. Even a banger looses money. A £1,500 car might/will suffer a breakdown at some point which is uneconomic to repair. Say you get £200 spares or repair, that's £1,200 lost over three years (could be more, or less but I think that figure and time scale sounds about right). £400 per year brings the total cost of a new car to £100 a month.
£100 per month. For a brand new shiny, won't breakdown, comfortable, modern mode of transport with lots of modern features my older cars don't have.
Have I been wrong all along? Swap one takeaway per week for a brand new car? Maybe I'm the fool, and all those people who are driving their new cars are the smug ones.
I can see from the app I could have a Golf R for just £80 more per month. Only £40 per week, to trade in an asthmatic 13 year old Golf for a brand new Golf R.
Am I missing something here? Why would anyone (like me, D'oh!) continue to drive an old banger when a new car is only the cost of a takeaway each week?
or
(Other takeaways and cars are available).
JumboBeef said:
£100 per month. For a brand new shiny, won't breakdown, comfortable, modern mode of transport with lots of modern features my older cars don't have.
Have I been wrong all along? Swap one takeaway per week for a brand new car? Maybe I'm the fool, and all those people who are driving their new cars are the smug ones.
This is why I now own a new car, I think that as we get older that money is worth it for the time saving alone. I got really bored of arranging lifts, taking days off etc trying to get things fixed. I do sometimes miss having an old car that I can park anywhere and I miss visiting my local mechanic, one of the few honest garages I've ever found.Have I been wrong all along? Swap one takeaway per week for a brand new car? Maybe I'm the fool, and all those people who are driving their new cars are the smug ones.
The takeaways don't stop, in fact they are more expensive because they have to be delivered now since I'm not having smelly food like that in my new car!
I guess you can try it and if you don't like it then at the end of the term don't take it up again and just buy an old banger.
I was just about to start a thread titled "lease-onomics" about the same thing. I leased a Golf R 5dr DSG for just over £300 a month (inc vat) and a £900 deposit. The car is amazing and even my insurance is only £255 a year. I have the car for another 15000 miles or 18 months before I chose something more exciting. I might go for an RS4 or Porshe Boxster, I am fully aware that there is interest included in my monthly payments but to have an interesting new car and no unexpected bills I'm pretty sure that I'll be leasing my cars in future
Edited by DUMBO100 on Saturday 29th August 16:27
Nice bit of maths but it’s still man maths. The flaw in your calculations is to look at payments on a monthly basis only.
Here's another perspective. I currently run an E39 M5 which in a few weeks clocks up five years in my ownership. A car which has a fearsome reputation as a wallet-emptier.
Factoring in purchase price, all of the servicing and maintenance I’ve done (the car has wanted for nothing and in my ownership has had replacement VANOS and suspension refresh among other things), minus what I might reasonably expect to sell it for, the car owes me approx. £8,000.
Add insurance and road tax for the five years at approx £4k and like-for-like I’ve spent £12k over 5 years compared to the £19,200 that your GTD would cost you at £320 per month (assuming you could even get such a deal over 5 years).
So for £200/month or 60% less than the GTD, I’ve enjoyed one of Munich’s finest-ever creations and (importantly for me at least) have had the pleasure of properly owning it as opposed to renting it. I’ve enjoyed spending the money on the car as it’s been a hobby, whereas having to fork out maintenance on a lease car wouldn’t be nearly as pleasant as I wouldn't be as emotionally invested in it.
You might argue that I got "lucky" in buying a car whose value has stayed stable or even appreciated. I'd point out that there are many cars you could buy today for not much money which won't lose much money and might even appreciate over a five-year horizon.
TBF I haven't been covering 15k miles per annum and if I had then no doubt my costs would be higher. And I'm not denying the appeal of leasing's predictable risks (the possibility my engine might explode is small but inevitably higher than that of a new GTD).
However, if like me the following criteria apply then owning outright cars that are the bottom of their depreciation curve can still make a lot of sense:
- You don't do massive miles
- You tend to take a longer-term view of your finances rather than month by month
- You're happy to keep a car for a while rather than chop in every couple of years
- You don't find new cars particularly appealing
ETA: road tax costs
Here's another perspective. I currently run an E39 M5 which in a few weeks clocks up five years in my ownership. A car which has a fearsome reputation as a wallet-emptier.
Factoring in purchase price, all of the servicing and maintenance I’ve done (the car has wanted for nothing and in my ownership has had replacement VANOS and suspension refresh among other things), minus what I might reasonably expect to sell it for, the car owes me approx. £8,000.
Add insurance and road tax for the five years at approx £4k and like-for-like I’ve spent £12k over 5 years compared to the £19,200 that your GTD would cost you at £320 per month (assuming you could even get such a deal over 5 years).
So for £200/month or 60% less than the GTD, I’ve enjoyed one of Munich’s finest-ever creations and (importantly for me at least) have had the pleasure of properly owning it as opposed to renting it. I’ve enjoyed spending the money on the car as it’s been a hobby, whereas having to fork out maintenance on a lease car wouldn’t be nearly as pleasant as I wouldn't be as emotionally invested in it.
You might argue that I got "lucky" in buying a car whose value has stayed stable or even appreciated. I'd point out that there are many cars you could buy today for not much money which won't lose much money and might even appreciate over a five-year horizon.
TBF I haven't been covering 15k miles per annum and if I had then no doubt my costs would be higher. And I'm not denying the appeal of leasing's predictable risks (the possibility my engine might explode is small but inevitably higher than that of a new GTD).
However, if like me the following criteria apply then owning outright cars that are the bottom of their depreciation curve can still make a lot of sense:
- You don't do massive miles
- You tend to take a longer-term view of your finances rather than month by month
- You're happy to keep a car for a while rather than chop in every couple of years
- You don't find new cars particularly appealing
ETA: road tax costs
Edited by plenty on Saturday 29th August 17:12
Leases are normally 24 or 36 months, keeping to manufacturers guidelines you'll probably only do 1 or possibly 2 services
The total cost for the Golf R is £8740 over 24 months inc vat and deposit. Insurance adds £510. Road tax is paid for and I'll keep a small slush fund for cosmetic repairs before I hand it back
The total cost for the Golf R is £8740 over 24 months inc vat and deposit. Insurance adds £510. Road tax is paid for and I'll keep a small slush fund for cosmetic repairs before I hand it back
Edited by DUMBO100 on Saturday 29th August 17:09
If you buy at the right age and the right cars you can enjoy pretty cheap motoring. I've got a Boxster and a C55 AMG. OK they are both the wrong side of 10 years old but I prefer this era of cars. Don't get me wrong I've had plenty of new cars recently as company cars but they are tools. I don't expect to lose much money if any on the initial purchase prices and between them cost less than £18k.
I think you're being a little creative on the maths.
I drive a Golf 7 GT and it's a cracking car, but I'd never even begin to justify it would be cheaper than running a 13 year old Golf.
It might be less hassle but never cheaper, but that's kind of the point, it's a predictable stable cost vs. a roller coaster and not knowing if a "big" bill is just around the corner etc.
I drive a Golf 7 GT and it's a cracking car, but I'd never even begin to justify it would be cheaper than running a 13 year old Golf.
It might be less hassle but never cheaper, but that's kind of the point, it's a predictable stable cost vs. a roller coaster and not knowing if a "big" bill is just around the corner etc.
plenty said:
You might argue that I got "lucky" in buying a car whose value has stayed stable or even appreciated.
You've also ignored the road tax, insurance and fuel costs, helping make your car look more of a bargain that perhaps it has been. Though congrats for owning such a good car for a good while and enjoying it.Strawman said:
You've also ignored the road tax, insurance and fuel costs, helping make your car look more of a bargain that perhaps it has been. Though congrats for owning such a good car for a good while and enjoying it.
I did forget about road tax but amended my post prior to yours to include. Insurance is included but no fuel, which is a direct apples-to-apples comparison to OP's GTD deal.plenty said:
Stuff.
I think the overall thing that this highlights is that you'll be able to drive a more interesting car for the money. There's no way you'd be able to pay the same for a brand new car with the same power and features.My 2.3T Volvo will probably need about £1k of work in the next few months (brakes getting low all round) but I paid under £1k for it. Buying new, there's no way I'd get anything close to over 2 litres with a turbo for what will be £55 a month for 3 years (assuming nothing else goes wrong). Even if I did need to spend another £2k over the next 3 years, that's £100 a month for 3 years on a lease. Could I get a saloon with a 2 litre turbo engine for £100 a month?
Edit: f
k me. Ling's Cars plays st music now, too.Edited by Hoofy on Saturday 29th August 17:46
When you are shedding, almost everything is an 'uneconomic repair'. Our shed is worth little more than scrap according to WBAC. So every time I get something fixed it usually comes to more than the value of the car!
BUT £500 spent on a repair might get me another couple of years motoring. Even when tax and insurance etc is added in, it is peanuts compared to the £3500 pa the OP will be spending.
I'm not knocking leasing, but it's not cheap.
BUT £500 spent on a repair might get me another couple of years motoring. Even when tax and insurance etc is added in, it is peanuts compared to the £3500 pa the OP will be spending.
I'm not knocking leasing, but it's not cheap.
JumboBeef said:
Repairs over the last couple of years must be more than a couple of grand (not helped by having to do the clutch and flywheel). So let's knock a hundred off each month.
I reckon this is where your man maths kicks into high gear. If you're spending £1200 a year on repairing your 'banger' then you're doing it wrong.Defcon5 said:
BlueMR2 said:
You realise after 2 years the modern car goes and you're left getting the deposit ready for the next.
On salary sacrifice schemes there isn't usually a deposit, it's just x per month from start to finish, and includes everything bar fuelFor alot who claim mileage would this scheme stop those payments?
I was offered the same scheme at work and asked my other half what she wanted due to the fact she never moans at my cheap car 'hobby'. She picked an A1 so we have that for a couple of years.It bores the living tits off me compared to my £500 Jag, cheap Volvo's and almost anything else older and more of a giggle, though.If you took the steering wheel badge off, you may as well be sitting in anything new from almost any manufacturer.
She loves it, of course and it does have options to change the suspension settings, voice control crap and an upgraded stereo etc so I can at least press buttons and play with stuff to avoid boredom.The most laughable part for me is how much it would cost new.It comes in at just under 20k.TWENTY GRAND for something no different to an escort but with some technology stuck on.Utter madness.
I have had so many cheap cars I have lost count and don't really have any tales of disaster to tell.I don't even have breakdown cover & many I sold on are still going strong.I now just steer clear of anything French and anything newer made by Vauxhall, all other makes are in with a shout.
Before this Audi, I was going to spend 2 to 3k on Honda and keep that as the main, reliable, trustworthy car and then continue my snottering hobby.I have only ever owned one new car and it's the one I had most trouble with.After that, my purchases just cost less and less and less and I just had more of them at the same time.I rarely have less than four or five cars on the go.
I could buy something new, but the Audi confirmed that everything new just feels the same to me.
She loves it, of course and it does have options to change the suspension settings, voice control crap and an upgraded stereo etc so I can at least press buttons and play with stuff to avoid boredom.The most laughable part for me is how much it would cost new.It comes in at just under 20k.TWENTY GRAND for something no different to an escort but with some technology stuck on.Utter madness.
I have had so many cheap cars I have lost count and don't really have any tales of disaster to tell.I don't even have breakdown cover & many I sold on are still going strong.I now just steer clear of anything French and anything newer made by Vauxhall, all other makes are in with a shout.
Before this Audi, I was going to spend 2 to 3k on Honda and keep that as the main, reliable, trustworthy car and then continue my snottering hobby.I have only ever owned one new car and it's the one I had most trouble with.After that, my purchases just cost less and less and less and I just had more of them at the same time.I rarely have less than four or five cars on the go.
I could buy something new, but the Audi confirmed that everything new just feels the same to me.
Edited by Digby on Saturday 29th August 22:53
JumboBeef said:
I'm sitting here typing this while I get a puncture repaired for the bargain price of £25. That's a cost I wouldn't have to pay on a new car, and it gets me thinking about all the other costs that add up. Repairs over the last couple of years must be more than a couple of grand (not helped by having to do the clutch and flywheel). So let's knock a hundred off each month.
£100 per month. For a brand new shiny, won't breakdown, comfortable, modern mode of transport with lots of modern features my older cars don't have.
I cannot see any type of lease company picking up the bill for fixing a tyre puncture? And you'll still have to put tyres on it if they wear low enough.£100 per month. For a brand new shiny, won't breakdown, comfortable, modern mode of transport with lots of modern features my older cars don't have.
Modern cars do break down still as well, and there are more electrics to go wrong IF they go wrong.
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