Not a what car... This is a "when" car!
Discussion
Dear All
(Mods- If this shouldn't be in General Gassing by all means move it.)
OK, so here's the scenario...
A 32 year old guy has an OK income but not much savings- he spent 4 months out of work unpaid when he needed surgery and chemotherapy last year (but that's all OK now!).
He's been saving for a house deposit but is thinking about splurging on something a bit sportier as a "thank f
k I'm still alive". It'd be nice to indulge the 2 seater sportscar itch before life moves on and possible marriage/need for car seats intervenes.
He owns a 55,000 mile Skoda Octavia vRS petrol on a 56 plate.
He (thinks) he wants a BMW Z4 Coupé 3.0 SE or Sport. The Z4M, while awesome, is out of his budget.
The Skoda's depreciating. The values of Z4 Coupés seems to be stable and it'd take him a year to save the difference.
If the car I'm trading up to is holding its value and my current wheels are depreciating, will it cost me more to take out a loan or to take the depreciation hit while I save up the cash?
I may or may not follow your advice!
I know the Boxster's probably the better car but at my budget I'm not quite willing to front the extra repair costs of a Boxster if things go wrong. Other non-MX5 suggestions welcome.
EDIT: To make the main question clearer. If it makes a difference, the Octavia needs a minor service/MOT and new tyres soon, but so might any Z4.
(Mods- If this shouldn't be in General Gassing by all means move it.)
OK, so here's the scenario...
A 32 year old guy has an OK income but not much savings- he spent 4 months out of work unpaid when he needed surgery and chemotherapy last year (but that's all OK now!).
He's been saving for a house deposit but is thinking about splurging on something a bit sportier as a "thank fk I'm still alive". It'd be nice to indulge the 2 seater sportscar itch before life moves on and possible marriage/need for car seats intervenes.He owns a 55,000 mile Skoda Octavia vRS petrol on a 56 plate.
He (thinks) he wants a BMW Z4 Coupé 3.0 SE or Sport. The Z4M, while awesome, is out of his budget.
The Skoda's depreciating. The values of Z4 Coupés seems to be stable and it'd take him a year to save the difference.
If the car I'm trading up to is holding its value and my current wheels are depreciating, will it cost me more to take out a loan or to take the depreciation hit while I save up the cash?
I may or may not follow your advice!
I know the Boxster's probably the better car but at my budget I'm not quite willing to front the extra repair costs of a Boxster if things go wrong. Other non-MX5 suggestions welcome.
EDIT: To make the main question clearer. If it makes a difference, the Octavia needs a minor service/MOT and new tyres soon, but so might any Z4.
Edited by blearyeyedboy on Tuesday 30th August 22:05
Honda S2000, these are down to a good price right now. Probably due to high insurance costs mainly so check that out but I suspect it will be more fun than the BMW if not quite so refined. Also not likely to lose too much money in depreciation now either.
Can you stretch to an early mk1 Elise? If you want something more serious though a Caterham just won't lose any money.
Can you stretch to an early mk1 Elise? If you want something more serious though a Caterham just won't lose any money.
poing said:
Can you stretch to an early mk1 Elise? If you want something more serious though a Caterham just won't lose any money.
Good call on the S2000. I need to do 300 mile round trips once a week and I don't have room for two cars, so an Elise or Caterham will be too spartan for a January weekend away.The Z4's may SEEM stable, but that could change.
The depreciation on the (older, I presume) Skoda is likely to be less, but not much so, than the depreciation on the Z4. So that's probably a score-draw at best.
The interest on the loan, for 1 year, will be negligible. Call it 10% APR (worst case), so paid over 12m = half of that, annualised. So 5% of whatever he needs to borrow.
Unless he's really averse to debt I wouldn't wait...but I might get something a bit more definitely depreciation-resistant.
The depreciation on the (older, I presume) Skoda is likely to be less, but not much so, than the depreciation on the Z4. So that's probably a score-draw at best.
The interest on the loan, for 1 year, will be negligible. Call it 10% APR (worst case), so paid over 12m = half of that, annualised. So 5% of whatever he needs to borrow.
Unless he's really averse to debt I wouldn't wait...but I might get something a bit more definitely depreciation-resistant.
blearyeyedboy said:
And while I think of it, do values of RWD tin tops drop in winter? I'm thinking of all the people who said their BMW's were dangerous when we had 2 days of snow last year... 
and I'm thinking that I might pick up a bargain in January.
They can do. I imagine autumn is the best time to buy, when the people who aren't so interested in cars sell their convertible they bought for summer. I'm in Norway and bought my car in February (so still around 4 months until the snow was gone) and it didn't really change price much until this autumn, when there have been some cheaper cars due to quite a few cars appearing on the market. I suspect this was to do with very few cars for sale, as "they're much cheaper in winter", and so even though there are not many buyers then there was not many cars available. and I'm thinking that I might pick up a bargain in January.If you need to borrow less than £5k and have a good enough credit rating you could just do it on a 0% credit card, as recommended on Money Saving Expert:
http://www.moneysavingexpert.com/cards/best-0-cred...
As long as you are sensible and pay off the balance before the 0% rate expires (typically 18 months) it's the cheapest way to borrow.
You could get the new car straight away avoiding further depreciation on your current car, then just treat the credit card like your 'savings account', putting in some money every month until the balance has cleared.
http://www.moneysavingexpert.com/cards/best-0-cred...
As long as you are sensible and pay off the balance before the 0% rate expires (typically 18 months) it's the cheapest way to borrow.
You could get the new car straight away avoiding further depreciation on your current car, then just treat the credit card like your 'savings account', putting in some money every month until the balance has cleared.
CptDangerous said:
If you need to borrow less than £5k and have a good enough credit rating you could just do it on a 0% credit card, as recommended on Money Saving Expert:
http://www.moneysavingexpert.com/cards/best-0-cred...
As long as you are sensible and pay off the balance before the 0% rate expires (typically 18 months) it's the cheapest way to borrow.
You could get the new car straight away avoiding further depreciation on your current car, then just treat the credit card like your 'savings account', putting in some money every month until the balance has cleared.
I haven't read your link but normally the 0% isn't available on cash withdrawls and it's worth keeping in mind a lot of dealers charge a percentage fee for buying on a credit card. Although you could negotiate that as a discount to help there.http://www.moneysavingexpert.com/cards/best-0-cred...
As long as you are sensible and pay off the balance before the 0% rate expires (typically 18 months) it's the cheapest way to borrow.
You could get the new car straight away avoiding further depreciation on your current car, then just treat the credit card like your 'savings account', putting in some money every month until the balance has cleared.
All good food for thought.
I imagine to buy a decent one I'd need another 5-6k to borrow right now. I'm eyeing Z4 values to see if they're falling quicker/more slowly than the Octavia.
It'd be nice to have a toy now and I could afford loan repayments. But there's also a pleasure to feeling that I've "earned" it and it's completely paid for. It felt great to pay off my loans before; I'd like to only go into debt if the figures really stack up that I'm going to spend less over the next 12 months or so by buying a Z4 sooner.
I'm also saving for a house deposit... not having enough for that but having a shiny Z4 would make me feel a bit gutted. I need to plan for both.
I imagine to buy a decent one I'd need another 5-6k to borrow right now. I'm eyeing Z4 values to see if they're falling quicker/more slowly than the Octavia.
It'd be nice to have a toy now and I could afford loan repayments. But there's also a pleasure to feeling that I've "earned" it and it's completely paid for. It felt great to pay off my loans before; I'd like to only go into debt if the figures really stack up that I'm going to spend less over the next 12 months or so by buying a Z4 sooner.
I'm also saving for a house deposit... not having enough for that but having a shiny Z4 would make me feel a bit gutted. I need to plan for both.
blearyeyedboy said:
All good food for thought.
I imagine to buy a decent one I'd need another 5-6k to borrow right now. I'm eyeing Z4 values to see if they're falling quicker/more slowly than the Octavia.
It'd be nice to have a toy now and I could afford loan repayments. But there's also a pleasure to feeling that I've "earned" it and it's completely paid for. It felt great to pay off my loans before; I'd like to only go into debt if the figures really stack up that I'm going to spend less over the next 12 months or so by buying a Z4 sooner.
I'm also saving for a house deposit... not having enough for that but having a shiny Z4 would make me feel a bit gutted. I need to plan for both.
If it's coming down to a few hundred quid here or there, remember that either car could suddenly dump a £1000 bill in your lap, and both are too valuable to walk away from, so you have to fix it. If it is the Z4, you'll be kicking yourself for changing, and if it's the Octavia, you'll be kicking yourself for not changing.I imagine to buy a decent one I'd need another 5-6k to borrow right now. I'm eyeing Z4 values to see if they're falling quicker/more slowly than the Octavia.
It'd be nice to have a toy now and I could afford loan repayments. But there's also a pleasure to feeling that I've "earned" it and it's completely paid for. It felt great to pay off my loans before; I'd like to only go into debt if the figures really stack up that I'm going to spend less over the next 12 months or so by buying a Z4 sooner.
I'm also saving for a house deposit... not having enough for that but having a shiny Z4 would make me feel a bit gutted. I need to plan for both.
In short, there isn't much in it either way, so take the fun option. We're here for a good time, not a long time.
Slightly OT, but sell the octavia, buy an interesting banger, save the deposit, then buy the Z4 with a clear conscience.
Or stop worrying about the depreciation by getting a Z3 M Coupe, and tell yourself it is an investment.
blearyeyedboy said:
S18DMW said:
If you can finance it and not worry about the cost every month do it. 
This is the danger of asking on PH. The depreciation is likely to be less than the cost of a 12 month loan (I'm assuming it's a couple K, obviously check depending on how big the loan is!).
We only get one chance at life, if we don't do what we want to, there's no other chance to have another go!
Also, are you going to be more happier driving around in the Z4 for the next 12 months, or getting frustrated in the VRS watching the savings accumulate?
Do it!
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