Optimum ownership period
Discussion
As an antidote to all the PCP vs new car leasing threads, I wonder when do you think is the optimum age to buy and sell a car to minimize total ownership costs?
This isn't a question asking which car has the lowest costs-- there are plenty of sites for that. But this is more about a general strategy for buying and selling a car so that the total cost of ownership is minimized, e.g. lowest depreciation vs maintenance and repair.
For example, these might be some strategies I could follow:
1. Buy the car new and sell after 3 years/30000 miles
2. Buy the car new and keep it for 20 years
3. Buy a 5-year-old car and sell after 4 years /40000 miles
4. Buy a 15-year-old car and sell after 1 year
5. Buying at 18 months to minimise depreciation and selling at 7 years before maintenance gets costly ?
I'm trying to find that sweet spot of age & mileage between minimizing depreciation losses against rising repair costs regardless of the car you choose.
What do you think?
This isn't a question asking which car has the lowest costs-- there are plenty of sites for that. But this is more about a general strategy for buying and selling a car so that the total cost of ownership is minimized, e.g. lowest depreciation vs maintenance and repair.
For example, these might be some strategies I could follow:
1. Buy the car new and sell after 3 years/30000 miles
2. Buy the car new and keep it for 20 years
3. Buy a 5-year-old car and sell after 4 years /40000 miles
4. Buy a 15-year-old car and sell after 1 year
5. Buying at 18 months to minimise depreciation and selling at 7 years before maintenance gets costly ?
I'm trying to find that sweet spot of age & mileage between minimizing depreciation losses against rising repair costs regardless of the car you choose.
What do you think?
Option 3 looks good.
Most of the time expensive maintenance is due to paying ridiculously high labour costs, parts are rarely expensive if it's a run of the mill car.
I have an Infiniti m37 with a faulty wheel bearing, the part is main dealer only and £240 plus 2-3 hours labour.
£390 plus VAT.
I imported the part from the USA for £90 and fitted it myself.
Most of the time expensive maintenance is due to paying ridiculously high labour costs, parts are rarely expensive if it's a run of the mill car.
I have an Infiniti m37 with a faulty wheel bearing, the part is main dealer only and £240 plus 2-3 hours labour.
£390 plus VAT.
I imported the part from the USA for £90 and fitted it myself.
I did the worst thing time wise, bought a car that was 8 years old & 40k miles and then took it through the expensive maintenance phase. Once it was sorted and running sweetly I got bored and felt I needed something different. I then bought a 6 year old car with 45k miles and did exactly the same thing....
One day I will learn.
One day I will learn.
Great question, and one I've not fully worked out after 30 years in the trade.
I usually buy my own cars at about three years old, in most cases they've lost about half their original cost.
That works if you want quite a modern car with nearly up to date tech.
If your not bothered about tech then go older.
But going older can bring the repair costs, it really is a bit of pot luck.
I can see why people go new nowadays though, small deposits, £150 a month for a brand new motor on the drive.
But just to give you one example, bought my daughter a VW Up.
It was three years old when I got it.
It's still worth close to what we paid a year ago for it, I think if I sold it now she's only lose £500 at the most from a years motoring.
I usually buy my own cars at about three years old, in most cases they've lost about half their original cost.
That works if you want quite a modern car with nearly up to date tech.
If your not bothered about tech then go older.
But going older can bring the repair costs, it really is a bit of pot luck.
I can see why people go new nowadays though, small deposits, £150 a month for a brand new motor on the drive.
But just to give you one example, bought my daughter a VW Up.
It was three years old when I got it.
It's still worth close to what we paid a year ago for it, I think if I sold it now she's only lose £500 at the most from a years motoring.
I'm closest to option 4
I find the car that suits my criteria for the lowest price.
I can afford to pay more but why pay more ?
I generally buy for less than £5k, I rarely keep a car over 6 months and rarely lose money on a car when I sell it.
I can wield a spanner but rarely have to - I just like tinkering
I recently bought my wife an X type 3.0 AWD auto with 56k and FSH for sub £3k and it's mint - I expect to keep it for 3-5 years.
However I have a friend that always bought new cars with a waiting list and managed to sell them after 6 months to a year old and he never lost money - until he bought 350z convertible - lost £10k IIRC but over 15 years of driving new cars that's not bad going.
I find the car that suits my criteria for the lowest price.
I can afford to pay more but why pay more ?
I generally buy for less than £5k, I rarely keep a car over 6 months and rarely lose money on a car when I sell it.
I can wield a spanner but rarely have to - I just like tinkering
I recently bought my wife an X type 3.0 AWD auto with 56k and FSH for sub £3k and it's mint - I expect to keep it for 3-5 years.
However I have a friend that always bought new cars with a waiting list and managed to sell them after 6 months to a year old and he never lost money - until he bought 350z convertible - lost £10k IIRC but over 15 years of driving new cars that's not bad going.
1, 2, 3 and maybe 5 work quite well. Not sure about 4, potential to spend lots, lose confidence and then bail for someone else to get the benefit.
2 works very well, we have an 11 year old Panda which we paid £4995 for brand new. It's been great, is still almost like new, costs little to run, has needed almost nowt and should easily do another 10 years. Something more complex however...?
2 works very well, we have an 11 year old Panda which we paid £4995 for brand new. It's been great, is still almost like new, costs little to run, has needed almost nowt and should easily do another 10 years. Something more complex however...?
I find the ones worried about big bills on older cars accept £1000+ service bills or for minor parts like AC compressors without hesitation, I've only once paid a bill over £1k in my life, running older cars for a combined 45 years (I pay for my wife's car too)
EG my wife's previous Mazda 6 Sport owned for 5 yrs and 50k has had standard servicing (by me) and 2 calipers and a handbrake cable - that's it.
It depreciated £2k, so in total (excluding tyres, fuel & tax) cost approx £500 / year
EG my wife's previous Mazda 6 Sport owned for 5 yrs and 50k has had standard servicing (by me) and 2 calipers and a handbrake cable - that's it.
It depreciated £2k, so in total (excluding tyres, fuel & tax) cost approx £500 / year
I generally buy a 3 yo with circa 20k mileage and run for circa 4 years for my daily
Bought my current daily (320dM-Sport Touring) on 21k miles at exactly 3 years old for £13k and 4 years later it’s only needed servicing and a water pump and I’m on 120k miles. It’s probably still worth £5-6k too somfor the mileage I do it’s fairly cheap motoring for a decent car
Bought my current daily (320dM-Sport Touring) on 21k miles at exactly 3 years old for £13k and 4 years later it’s only needed servicing and a water pump and I’m on 120k miles. It’s probably still worth £5-6k too somfor the mileage I do it’s fairly cheap motoring for a decent car
I’ve always bought at around 3 yrs old with mileages from 15 - 100k. I pay approx 1/3 of the original cost of the car and, touch wood, suffer no significant mechanical issues. I sell the car at about 5 years old having lost around £3-4K
For example: 3 yr old BMW 330d touring: £13k Sell at 5 yrs old for £9-10k
That’s pretty reasonably priced motoring considering it’s a ‘premium-ish’ car and looks, drives and feels more or less like a new one
For example: 3 yr old BMW 330d touring: £13k Sell at 5 yrs old for £9-10k
That’s pretty reasonably priced motoring considering it’s a ‘premium-ish’ car and looks, drives and feels more or less like a new one
If the question is which has the lowest cost then surely option 4.
A 15 year old car would usually be bought privately for very little money and could usually be sold a year later for the same. Choose wisely and with luck you shouldn't have to spend anything in maintenance.
TLDR Old car kept for a year costs less than new car kept for several.
Most people I deal with approach it the other way though, deciding how much to spend either as a capital amount or a monthly amount and the type of car that they want, and then the age of the car that fits the bill is determined by those two parameters
A 15 year old car would usually be bought privately for very little money and could usually be sold a year later for the same. Choose wisely and with luck you shouldn't have to spend anything in maintenance.
TLDR Old car kept for a year costs less than new car kept for several.
Most people I deal with approach it the other way though, deciding how much to spend either as a capital amount or a monthly amount and the type of car that they want, and then the age of the car that fits the bill is determined by those two parameters
Edited by Wooda80 on Saturday 19th January 14:00
Surely the answer is to buy a typically cheap to run and known to be reliable car (Japanese/Petrol) at around £1,000 that is in reasonable nick and has a year's MOT.
Worst case then is that you scrap it if throws up a repair bill of note or needs money spent to get through the next MOT.
Worst case then is that you scrap it if throws up a repair bill of note or needs money spent to get through the next MOT.
SCEtoAUX said:
Surely the answer is to buy a typically cheap to run and known to be reliable car (Japanese/Petrol) at around £1,000 that is in reasonable nick and has a year's MOT.
Worst case then is that you scrap it if throws up a repair bill of note or needs money spent to get through the next MOT.
For pure bangernomics yes.Worst case then is that you scrap it if throws up a repair bill of note or needs money spent to get through the next MOT.
But whilst you win on not caring where you park it, you lose on driving pleasure etc
As always it depends what matters to you.
My recent cars have been virtually zero cost and include:
Forester XT modified to 275bhp, Mazda 6 2.3 Sport, MX5 (various including Mk1 supercharged and MK3.5), BMW 330 Sport convertible, RX7, Jag X Type 3.0 AWD, Jeep 4.7 Grand Cherokee, Vito V6
I really don't feel I've lost out in any way by not running newer / more expensive cars.
The biggest POS I've ever bought was a £12k XC90 for my wife - it's the most unreliable car I've ever owned - and I've owned many TVRs !
Balmoral said:
Wooda80 said:
If the question is which has the lowest cost then surely option 4.
If it's bangernomics then yes, of course, if nothing goes wrong and if it does it's binned.I made the mistake of buying my daughter a 206 to learn in - during the scrappage scheme there was a lack of decent cars.
Cost £850 with a burnt back seat and a dented bonnet.
I fixed both for £120
Then it started to misfire - an injector sorted it
Then it wouldn't start - a sharp blow to the fuel pump fixed it
The sunroof failed to shut - forced closed and sealed up
It overheated - fan relays corroded
Then it needed 4 tyres (due to cracking)
Then it needed a water pump (leaking) so we did the cambelt too
Of course a few weeks later the rear beam seized, at this point - after 3 yrs of use - I scrapped it.
Probably the worst car I've ever bought - lesson learnt - no more French cars
I think the original proposal needs qualifying with:
Which brand / model of car
If you are buying a Range Rover/Discovery/Evoque/Velar then all bets are off Even the "reliable" makes are going to have a scattering of lemons
What is the manufacturer warranty / can it be extended, if so how far ?
e.g. Toyota is 5 years can be extended up to 10 years / 100K miles, VW is 3 years can be extended to 100K miles
Which brand / model of car
If you are buying a Range Rover/Discovery/Evoque/Velar then all bets are off
Even the "reliable" makes are going to have a scattering of lemonsWhat is the manufacturer warranty / can it be extended, if so how far ?
e.g. Toyota is 5 years can be extended up to 10 years / 100K miles, VW is 3 years can be extended to 100K miles
We've had 8 cars in 18 years - with two on order for March, so if I count those too then in total I've bought 10 cars... of that list
- 6 bought new
- 1 bought at 8 months old
- 1 bought at 18 months old
- 2 bought >3 years old
Option 4 for me, I generally get bored with my cars so i buy at the bottom of the market and move on when I've had enough.
I have been very lucky *touches wood* that with 35+ cars only 2 have lost any significant amount of money (£500+).
Although now I'm driving a fair bit for work I'm feeling I want something a bit newer and less noisy so i'm looking at something between option 3 and 5. Buy something a few years old with the intent of keeping it a few years, whatever time frame makes the 'cost of ownership' the cheapest (least expensive).
I'd quite happily drive an old barge but with majority of mileage in London it doesn't make sense to drive something that won't meet congestion charge/LEZ/ULEZ criteria.
I have been very lucky *touches wood* that with 35+ cars only 2 have lost any significant amount of money (£500+).
Although now I'm driving a fair bit for work I'm feeling I want something a bit newer and less noisy so i'm looking at something between option 3 and 5. Buy something a few years old with the intent of keeping it a few years, whatever time frame makes the 'cost of ownership' the cheapest (least expensive).
I'd quite happily drive an old barge but with majority of mileage in London it doesn't make sense to drive something that won't meet congestion charge/LEZ/ULEZ criteria.
Edited by MrAverage on Sunday 20th January 07:53
If you think luck is on your side, buy something 6-8 years old when it won’t depreciate much more and hope your maintenance isn’t too much.
Personally my strategy is to buy 7/8 months old and keep for 4 years(ish) - I’m adding 20k a year in mileage, so want to shift it before it ticks over 100k. I’ve been lucky and been able to buy cars for half their list price at that point (or about 40% off if you consider the discount possible via drive the deal etc.) so my depreciation hit is as minimal as it can be for driving a nice nearly new car - about £2-2.5k a year for a top spec model with a nice badge and comfortable to spend time in (Audi, Volvo etc.).
Personally my strategy is to buy 7/8 months old and keep for 4 years(ish) - I’m adding 20k a year in mileage, so want to shift it before it ticks over 100k. I’ve been lucky and been able to buy cars for half their list price at that point (or about 40% off if you consider the discount possible via drive the deal etc.) so my depreciation hit is as minimal as it can be for driving a nice nearly new car - about £2-2.5k a year for a top spec model with a nice badge and comfortable to spend time in (Audi, Volvo etc.).
Gassing Station | Car Buying | Top of Page | What's New | My Stuff