Running Costs. New Vs Used

[Snowboy]

There's been a few threads recently that have made me consider the running costs between a new and used car.
Say, over 3 years over ownership the difference between a new car, a 3 year old car, a 6 year old car.

Insurance – about the same.
Tax – Same (except for first year of new ownership)
Fuel – Same

The only cost I can see being different are repairs and maintenance.
A 3-6 year old car is likely to have a few things go wrong.
But, I've owned my A4 from 6 month old, it's now 7 years old.
In the last 4 years (besides standard service) I've needed a new battery and new drop links. That's a few hundred quid.
I'll take a guess and say that in next 3 years it won't need much more.

Modern cars seem to be built quite well.
It’s not like an old escort which would start rusting on the forecourt.

So, have I missed anything.
I really can't think of any other costs in running a 3-6 year old car over a new one.
Or at least no significant ones.
Especially as most 3 year old dealer purchased used cars will come with a comprehensive 12 month warranty anyway.

Any comments?

[jon-]

Depreciation.

[Ozzie Osmond]

Depreciation.

[MSport Calendar]

Don't forget big service items such as cambelt changes...

[excel monkey]

Depreciation.
Cost of financing (or lost savings interest).
Insurance likely to be cheaper on an older car, as the replacement cost of the vehicle is lower.

[airportparking]

If your looking at it from a cost basis then of course second hand will be cheaper, a brand new car whatever it might be should be something you Want rather then Need. Some people love to be the first owner of a brand-new shiney car and are prepared to write of the extra costs

[Snowboy]

If for a moment we could ignore depreciation.
Assume perhaps that you were given a brand new car and your identical twin was given a 3 year old car that was exactly the same.

In general, do you think there would be a great deal of different in running costs these days?


I know that 20 years ago there would have been.
3 year old cars used to be starting to rust, exhausts would be getting holes, carbs would need servicing.
But modern cars just seem to made of sterner stuff.

[Fastdruid]

Don't forget if you run something fun that's pre early 2006 you save ~£200 on VED.

That's why we went out of our way to get a Feb/2006 RX-8. A couple of months later and it would be £460.00/year rather than £260/year. Although that's ignoring that it's lost about 7k in the time we saved £800... ;-)

[nonuts]

Depends what goes wrong in the 3-6 year bit. My S3 for example shat the engine (at 4yrs old from memory) and most of the suspension was consumable from what I could see anywhere upwards of 20k miles depending on part. That doesn't make for a cheap ownership experience. Depreciation is the real difference though still.

[MSport Calendar]

Snowboy said:

Assume perhaps that you were given a brand new car and your identical twin was given a 3 year old car that was exactly the same.

With the new car you'd have a warranty for any major items, the question would be better to compare the 3yr old and 6yr old cars.

I suspect it would be down to luck which would be the more reliable.

[5lab]

a brand new car is likely to be more fuel efficient and attract less tax than an older car.

[RobM77]

I agree with all of the above, but just to add one small point - bear in mind the effect that wear and tear has on the driving experience. Like the OP with his Audi, I bought my Elise when it was 6 months old. Seven years later it doesn't drive as well, because components have worn out. This will happen to any car.

[mcflurry]

New cars have a fixed running cost due to warranties and service packs, older cars potentially have more bills for worn out stuff, but generally lose less in depreciation

[chris7676]

DEPRECIATION.
Modern cars are NOT that well built.
My 20 years old MR2 was definitely more reliable than the 8 years old Corsa.

[patmahe]

RobM77 said:

I agree with all of the above, but just to add one small point - bear in mind the effect that wear and tear has on the driving experience. Like the OP with his Audi, I bought my Elise when it was 6 months old. Seven years later it doesn't drive as well, because components have worn out. This will happen to any car.

While I'd broadly agree with you, provided you service/renew the components essential to the car being what it is, it shouldn't cost you a whole lot to keep it at 90% of what it was when new. For example I'd much rather spend 10 grand on a Boxster and more again renewing worn parts on it, because it still provides better value than any equivalent new car, especially when you take depreciation into account.

[Rovinghawk]

Snowboy said:

If for a moment we could ignore depreciation.

Why? It exists & is highly relevant.
If you ignore the bits that don't suit you then your argument will always win.

RH

[c7xlg]

I have an E61 BMW that I bought when 18 months old and have had for just under 5 years now. It has done 107,000 miles now.

I'm wondering if I should think about replacing it soon. But to do that would mean spending £6,000-£10,000 a year on a finance deal of some form which would always be keeping up with the depreciation of the car and not much more.

I'm trying to think what the potential maintenance issues I could have with the current car will be if I keep it for another 2-4 years and get it closer to 200,000:

1) Cats will go at some point... £1000 or so to replace.
2) Auto-gearbox probably needs an oil change. This is a 4 hour job so about £500 at good indy.
3) Suspension bushes probably due a re-fresh, with 4 wheel alignment £500 or so.
4) Dampers might need a re-fresh... £1-2000 depending on option.
5) Something big/electronic brain fails could be £1-3000 to replace depending on what it is/ OEM vs refurb replacement.

Engine is timing chains so no cambelt.

I'll do oil changes, brake pads etc myself. With a new car I'd have to get these done at a garage, probably OEM one at that, to keep warranty valid.

So old car will cost me £1000-4000 a year to maintain, compared to probably £300-500 for a new car.

But balanced against £5000-10,000 a year depreciation on the new car (current car isn't going to depreciate that much more).

So I will keep the current car, spending money on maintaining her, and only get rid if/when she starts to become unreliable (ie breaking down more than once or twice a year).

[kambites]

In my (second-hand) experience, brand new cars tend to be about the least reliable cars out there. Most people I know who've bought new have had to take it back to be fixed at least a couple of times in the first year, some of them more than ten times. The advantage of course, is that someone else pays for it.

Still, I'd expect the three year-old example to be considerably more reliable.

[George7]

Depreciation is a huge factor. A new car will lose thousands in its first year whilst my car (11 yr old Focus) loses 50-100 quid at the most.

[SarGara]

kambites said:

In my (second-hand) experience, brand new cars tend to be about the least reliable cars out there. Most people I know who've bought new have had to take it back to be fixed at least a couple of times in the first year, some of them more than ten times. The advantage of course, is that someone else pays for it.

Still, I'd expect the three year-old example to be considerably more reliable.

How much of that is because they can return it under warranty for niggles/imperfections rather than have to? I imagine if some of those issues were encountered on a 2nd hair car they would be shrugged off as part of the 2nd hand ownership experience.