Higher running costs vs Lower depreciation - does it work?!
Discussion
Hi folks,
A conundrum that I'm I'm not the first to ponder!
Later this year I'll be after a new (second hand) car for around £18-22k, needs to fit my two boys (3 & 6) but also want something fun.
So the conundrum is this; I could buy a newer car (quick BMW/Audi/Alfa etc) that will be quick enough, smart, and relatively new so lower running costs, possibly a warranty etc, but being newer and more mainstream it will depreciate as you'd expect.
Option two is to go for something a little more 'fun' and specialist such as a B7 Audi RS4, E90 M3, E60 M5, C63 AMG etc; running costs will be higher all round but depreciation should be low and in some cases neutral or even positive.
So, does the low/lack of depreciation counter the higher running costs and make a more specialist 'fun' car more sensible (or at least less financially painful)?!
Keen to hear your thoughts :-).
A conundrum that I'm I'm not the first to ponder!
Later this year I'll be after a new (second hand) car for around £18-22k, needs to fit my two boys (3 & 6) but also want something fun.
So the conundrum is this; I could buy a newer car (quick BMW/Audi/Alfa etc) that will be quick enough, smart, and relatively new so lower running costs, possibly a warranty etc, but being newer and more mainstream it will depreciate as you'd expect.
Option two is to go for something a little more 'fun' and specialist such as a B7 Audi RS4, E90 M3, E60 M5, C63 AMG etc; running costs will be higher all round but depreciation should be low and in some cases neutral or even positive.
So, does the low/lack of depreciation counter the higher running costs and make a more specialist 'fun' car more sensible (or at least less financially painful)?!
Keen to hear your thoughts :-).
It can but it's very dependent on the car at your price point the IS-F & VXR8 are a very good mix of slow depreciation & sensible maintenance (think 340i running costs) & a cracking car that'll put a smile on your face:
https://www.autotrader.co.uk/classified/advert/202...
https://www.autotrader.co.uk/classified/advert/202...
VXR8
https://www.autotrader.co.uk/classified/advert/202...
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/202...
https://www.autotrader.co.uk/classified/advert/202...
VXR8
https://www.autotrader.co.uk/classified/advert/202...
https://www.autotrader.co.uk/classified/advert/201...
I think it’s pretty simple maths, you just need to make some assumptions as to what the depreciation and running costs of each car will be. It will be easier to make more accurate assumptions on the newer car as depreciation and costs will be more predictable, particularly with regard to bork. The other factor is hassle, the newer car will likely be less, different people place different value here. If it’s a family daily, personally I’d take the newer car.
I think it is break even at most price points, whether you are spending £5k or £20k.
The only caveat is depreciation is almost guaranteed on a newer Beemer or whatever( even on an older M3) and maintenance bills you might get lucky. Unfortunately most cars cost money, one way or another.
The only caveat is depreciation is almost guaranteed on a newer Beemer or whatever( even on an older M3) and maintenance bills you might get lucky. Unfortunately most cars cost money, one way or another.
Thanks folks, all valid points. Love the VXR8 but it's a car I'd love a mate to own, I have family up North so value a nice interior (personal preference I appreciate); IS-F is an interesting shout though, hadn't realised they'd come down that much, I'll take a look :-).
This is always going to be a mix of judgement and luck, I've had Alfas and a TVR so not shy about cars that need a bit of love but naturally less hassle the better; I think all of the options have the potential to be plain-sailing or wallet-breaking but I think the RS4 in particular will hold firm on value and maybe even appreciate, that engine is the stuff of legend!
I'd ball-park a 'regular' Beemer/Audi costing £2k annually in depreciation and £1,000-£1,500 in tax, insurance and servicing/repair so let's say £3,250 annually. An M3/RS4 etc might scrape neutral or minimal depreciation if it's a good'un but could easily cost £3-5k annually to run depending on luck. To me an extra £1,000 per year to have that feeling of getting into a special car is worthwhile, the problem arises if it really goes pop or needs a load of work all at once but that would be unlucky.
Just thinking out loud, appreciate your input!
This is always going to be a mix of judgement and luck, I've had Alfas and a TVR so not shy about cars that need a bit of love but naturally less hassle the better; I think all of the options have the potential to be plain-sailing or wallet-breaking but I think the RS4 in particular will hold firm on value and maybe even appreciate, that engine is the stuff of legend!
I'd ball-park a 'regular' Beemer/Audi costing £2k annually in depreciation and £1,000-£1,500 in tax, insurance and servicing/repair so let's say £3,250 annually. An M3/RS4 etc might scrape neutral or minimal depreciation if it's a good'un but could easily cost £3-5k annually to run depending on luck. To me an extra £1,000 per year to have that feeling of getting into a special car is worthwhile, the problem arises if it really goes pop or needs a load of work all at once but that would be unlucky.
Just thinking out loud, appreciate your input!
The IS-F is a very underrated car by most people but they're a cracking car that really gets under your skin, with running costs that are on par with a 340i/S4 when you're talking main dealer servicing.
Here's a thread to help give an idea about them:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Of the more mainstream options the XE S is a very good shout:
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/202...
Here's a thread to help give an idea about them:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Of the more mainstream options the XE S is a very good shout:
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/202...
depends on the car 
my e39 M5 has basically only cost consumables (tyres / brakes / oil / servicing) in 3 years and 40,000 miles
there is a well documented case of an e60 M5 on here costing a 'little bit more'
so I suspect that mine has had minimal depreciation and minimal running costs (other than fuel!)
was immaculately cared for before and looked after well by me - makes a lot of difference...
my e39 M5 has basically only cost consumables (tyres / brakes / oil / servicing) in 3 years and 40,000 miles
there is a well documented case of an e60 M5 on here costing a 'little bit more'
so I suspect that mine has had minimal depreciation and minimal running costs (other than fuel!)
was immaculately cared for before and looked after well by me - makes a lot of difference...
akirk said:
depends on the car
my e39 M5 has basically only cost consumables (tyres / brakes / oil / servicing) in 3 years and 40,000 miles
there is a well documented case of an e60 M5 on here costing a 'little bit more'
so I suspect that mine has had minimal depreciation and minimal running costs (other than fuel!)
was immaculately cared for before and looked after well by me - makes a lot of difference...
I would dearly love an E39, a buddy had one years ago and scared the pants off me on the way to Le Mans - such a great car, sounded like a Nascar with Hayward and Scott pipes :-).my e39 M5 has basically only cost consumables (tyres / brakes / oil / servicing) in 3 years and 40,000 miles
there is a well documented case of an e60 M5 on here costing a 'little bit more'
so I suspect that mine has had minimal depreciation and minimal running costs (other than fuel!)
was immaculately cared for before and looked after well by me - makes a lot of difference...
Just concerned that the ones left without stratospheric mileage are very much in the modern classic camp and well over £20k, a classic case of 'should have bought one when they were cheap'!
Also worth bearing in mind whether you can be handy with the spanners / error code readers, or whether you're going to rely on dealers or a decent specialist when something does need attention.
I've always gone the older, cheaper, more fun route myself, but then I'm happy to get stuck in myself to fix issues, and use a specialist occasionally when I need to.
I'd be thinking twice if I had to rely solely on the main dealer to get things fixed. Then a newer lower spec' car with dealer warranty would look a lot more attractive
.
I've always gone the older, cheaper, more fun route myself, but then I'm happy to get stuck in myself to fix issues, and use a specialist occasionally when I need to.
I'd be thinking twice if I had to rely solely on the main dealer to get things fixed. Then a newer lower spec' car with dealer warranty would look a lot more attractive
.I had the same budget and three years ago picked up my E500 Cabrio with only 12,000 miles on the clock, in a private sale.
Put it on fixed price main dealer servicing at £39 a month and Mercedes Extended tier 1 warranty at £650 yr. So for about a £100 a month I’ve been sorted.
The E Class fixed price servicing and warranty is at the same price for a V8 E500 as the 4 cylinder E200 / E220. Sadly doesn’t include the AMG’s. Turned out to be a bit of bargain as I made a massive claim on the warranty.
Pretty much the only cost on top of that it’s tyres and brakes. Just pre Covid I was offered a PX price of £7k less than I paid for it, so £2300 a yr in depreciation - in old times money.
Put it on fixed price main dealer servicing at £39 a month and Mercedes Extended tier 1 warranty at £650 yr. So for about a £100 a month I’ve been sorted.
The E Class fixed price servicing and warranty is at the same price for a V8 E500 as the 4 cylinder E200 / E220. Sadly doesn’t include the AMG’s. Turned out to be a bit of bargain as I made a massive claim on the warranty.
Pretty much the only cost on top of that it’s tyres and brakes. Just pre Covid I was offered a PX price of £7k less than I paid for it, so £2300 a yr in depreciation - in old times money.
I bet this is a question most of us have asked ourselves.
Depreciation is usually the biggest cost of car ownership. Trouble is that older, high performance cars can be just as prone to depreciation as anything else. How long you plan to keep the car also makes a big difference. If you buy from a dealer the biggest depreciation will happen immediately whatever you buy. Keep it ten years and depreciation isn't much of an issue.
I bought a 6 year old 3 series. Paid £11k three years ago which in hindsight was too much but it was low mileage and good condition. Current part ex value is less than £5k so that's a couple of grand a year lost if I sell soon. Maintenance costs can be lucky dip. After the first year it cost me £2.5k in repairs and I was almost ready to get rid. But the last two years nothing but basic services. I think that a big high performance car could hit you with a huge bill if you're unlucky.
The best way to avoid depreciation on your daily driver is to spend as little as possible in the first place. But of course the potential for big bills on anything interesting is then even more likely. Plus the older they are the more they will cost in fuel and tax.
Depreciation is usually the biggest cost of car ownership. Trouble is that older, high performance cars can be just as prone to depreciation as anything else. How long you plan to keep the car also makes a big difference. If you buy from a dealer the biggest depreciation will happen immediately whatever you buy. Keep it ten years and depreciation isn't much of an issue.
I bought a 6 year old 3 series. Paid £11k three years ago which in hindsight was too much but it was low mileage and good condition. Current part ex value is less than £5k so that's a couple of grand a year lost if I sell soon. Maintenance costs can be lucky dip. After the first year it cost me £2.5k in repairs and I was almost ready to get rid. But the last two years nothing but basic services. I think that a big high performance car could hit you with a huge bill if you're unlucky.
The best way to avoid depreciation on your daily driver is to spend as little as possible in the first place. But of course the potential for big bills on anything interesting is then even more likely. Plus the older they are the more they will cost in fuel and tax.
As above time is the biggest factor those that bought an IS-F/VXR8 would've suffered big depreciation initially & those that sold between 1-3 years would've taken a beating but those that have owned theirs from new to now will have suffered slow depreciation now.
The 2011 IS-F was 60k new one with 45k on the clock is around 22-26k.
The 2011 M3 DCT Saloon was 55k (before options) these would be (going by my brothers experience with his) more maintenance heavy than the IS-F & is 19-23k for one with less than 45k on the clock.
The 6.2 VXR8 was 50k new but here's the thing for a low mileage one you'll be looking at a 2009 for 20k so it'll have depreciated less than the M3 & C63.
Obviously maintenance wise there will have been costs involved in running them but with 45k none should've cost the earth.
The 2011 IS-F was 60k new one with 45k on the clock is around 22-26k.
The 2011 M3 DCT Saloon was 55k (before options) these would be (going by my brothers experience with his) more maintenance heavy than the IS-F & is 19-23k for one with less than 45k on the clock.
The 6.2 VXR8 was 50k new but here's the thing for a low mileage one you'll be looking at a 2009 for 20k so it'll have depreciated less than the M3 & C63.
Obviously maintenance wise there will have been costs involved in running them but with 45k none should've cost the earth.
Some figures for you: I ran an 57 plate E92 M3 for 9 months and 20'000 miles.
Purchase price £17'700
Sale price £17'500
Total maintenance cost = £4100 (inc. AUC warranty monthly premium, brakes all round, Michelins all round plus a major service and a few other bits and bobs)
21p/mile excluding tax/insurance/fuel.
The maintenance would have been significantly less in the following years as I did all the big jobs then decided to sell!
Purchase price £17'700
Sale price £17'500
Total maintenance cost = £4100 (inc. AUC warranty monthly premium, brakes all round, Michelins all round plus a major service and a few other bits and bobs)
21p/mile excluding tax/insurance/fuel.
The maintenance would have been significantly less in the following years as I did all the big jobs then decided to sell!
Really helpful responses, thanks everybody.
I expect to have the car 1-2 years covering 8-10k miles per year (mix of driving) so any sort of warranty package would be worthwhile if I can get it I think.
With two young boys and associated kit (bikes etc) an estate appeals so that points towards B7 RS4 Avant or C63 AMG. That said an S4 Avant (Supercharged V6) is still a nice car and plenty fast enough, plus lower costs and 4-5 years newer at my budget. I guess I just want a V8 :-).
Like the thought of an E500 Cab or S5 Cab, can you fit a bike rack to the boot??
I expect to have the car 1-2 years covering 8-10k miles per year (mix of driving) so any sort of warranty package would be worthwhile if I can get it I think.
With two young boys and associated kit (bikes etc) an estate appeals so that points towards B7 RS4 Avant or C63 AMG. That said an S4 Avant (Supercharged V6) is still a nice car and plenty fast enough, plus lower costs and 4-5 years newer at my budget. I guess I just want a V8 :-).
Like the thought of an E500 Cab or S5 Cab, can you fit a bike rack to the boot??
romeodelta said:
This is the route I have always taken.
Buy older, more interesting cars and change regularly.
Buy and sell around the same price and not been stung with any major bills, touch wood. YMMV.
I wondered if you would mind giving some examples of cars and price range you've had success with?Buy older, more interesting cars and change regularly.
Buy and sell around the same price and not been stung with any major bills, touch wood. YMMV.
I've only managed it once. MR2 roadster bought for £2500, ran for 18 months and sold for £3000. Totally reliable so basically a free car.
ChrisH72 said:
romeodelta said:
This is the route I have always taken.
Buy older, more interesting cars and change regularly.
Buy and sell around the same price and not been stung with any major bills, touch wood. YMMV.
I wondered if you would mind giving some examples of cars and price range you've had success with?Buy older, more interesting cars and change regularly.
Buy and sell around the same price and not been stung with any major bills, touch wood. YMMV.
I've only managed it once. MR2 roadster bought for £2500, ran for 18 months and sold for £3000. Totally reliable so basically a free car.
Some quick examples, buy and sale prices within a few hundred quid of each other.
2001 Alfa GTV TS - £2k
2000 Alfa GTV V6 - £3k
2002 MGTF 160 - £2k
Oh the irony of recommending old Alfas and MGs as reliable and cheap to run. YMMV
Thanks for that.
I guess a lot of 'interesting' but relatively normal cars will bottom out at around 2-3k?
The holy grail of used car buying is to find something that won't lose any money but is also going to be inexpensive to run!
I slipped up with my current car. Bought for over 10k thinking it's a BMW and they hold their money. But the truth is it'll probably bottom out at 2k.
Can it be done for, say £10k?
I'm thinking for those who don't really want to run a really old/cheap car.
I was looking at the Audi TTS last night which is now around £8-9k for a nice one with sensible miles. I wonder if they will also sink to 2k in time? Hmmmm.
Or something like a 135i coupe. Prices never seem to go down much on those.
I guess a lot of 'interesting' but relatively normal cars will bottom out at around 2-3k?
The holy grail of used car buying is to find something that won't lose any money but is also going to be inexpensive to run!
I slipped up with my current car. Bought for over 10k thinking it's a BMW and they hold their money. But the truth is it'll probably bottom out at 2k.
Can it be done for, say £10k?
I'm thinking for those who don't really want to run a really old/cheap car.
I was looking at the Audi TTS last night which is now around £8-9k for a nice one with sensible miles. I wonder if they will also sink to 2k in time? Hmmmm.
Or something like a 135i coupe. Prices never seem to go down much on those.
Chuck21 said:
Hi folks,
A conundrum that I'm I'm not the first to ponder!
Later this year I'll be after a new (second hand) car for around £18-22k, needs to fit my two boys (3 & 6) but also want something fun.
So the conundrum is this; I could buy a newer car (quick BMW/Audi/Alfa etc) that will be quick enough, smart, and relatively new so lower running costs, possibly a warranty etc, but being newer and more mainstream it will depreciate as you'd expect.
Option two is to go for something a little more 'fun' and specialist such as a B7 Audi RS4, E90 M3, E60 M5, C63 AMG etc; running costs will be higher all round but depreciation should be low and in some cases neutral or even positive.
So, does the low/lack of depreciation counter the higher running costs and make a more specialist 'fun' car more sensible (or at least less financially painful)?!
Keen to hear your thoughts :-).
In 2016 I was working with lots if other contractors in an office where our hourly rate was nuclear. One of the other guys was bragging about his new car. Some sort of fancy Merc, 6000 quid deposit and 400 a month lease cost. A conundrum that I'm I'm not the first to ponder!
Later this year I'll be after a new (second hand) car for around £18-22k, needs to fit my two boys (3 & 6) but also want something fun.
So the conundrum is this; I could buy a newer car (quick BMW/Audi/Alfa etc) that will be quick enough, smart, and relatively new so lower running costs, possibly a warranty etc, but being newer and more mainstream it will depreciate as you'd expect.
Option two is to go for something a little more 'fun' and specialist such as a B7 Audi RS4, E90 M3, E60 M5, C63 AMG etc; running costs will be higher all round but depreciation should be low and in some cases neutral or even positive.
So, does the low/lack of depreciation counter the higher running costs and make a more specialist 'fun' car more sensible (or at least less financially painful)?!
Keen to hear your thoughts :-).
4 weeks later i bought a 163k 3.2 Omega MV6
Its now done 222k I've spent £1500 on maintenance repair, servicing and had 2 breakdowns. One due to previous poor servicing of the brakes and was potential very dangerous, and the other due to the radiator springing a leak.
I get 28 mpg overall, and try not to use it around town for short trips so petrol costs are high. However depreciation is negative. I reckon it's worth £6.57 more than when I bought it. Currently forlouged and Contractless, so not costing a penny, sitting outside.
It cost £525 to buy.
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