Buying fast-depreciating cars, daft?
Discussion
I’ve fortunately managed to avoid losing much money on depreciation over the years. My cars have been too cheap to lose anything, or my length of ownership has made the average monthly depreciation more than acceptable.
I’m now in a position where my mortgage is paid off, my pension is on track, and I saved enough to buy something reasonably expensive (to me, at least).
I want something new (or nearly new), big, comfortable and full of tech, rather than the usual two-seat sports car type I’m used to.
The problem is that many cars I’m considering will easily lose £10k a year, maybe even closer to £15k. Although I can afford the outright purchase price and the running costs, the thought of an asset losing £800-1250 a month is a bit alien and scary to me.
For example, one of the cars I'm considering is a brand new BMW 840i, RRP is over £80k, but with discount, the dealer has advertised it for £63k. That’ll be worth £50k in 12 months and £40k in 12 months after that. And whilst I intend to keep it longer, you never know what life will throw at you.
I know the obvious answer to some may be to buy second-hand, but I’ve been to see some approved used examples, and even though they are only 12 months old, they have kerbed wheels and leather that is surprisingly shiny, dirty and cracked. Plus, some of the new LCI (facelifted) cars are much prettier.
So without judging me for my taste in cars, I’d be interested in hearing from PHer’s who have purchased similar fast-depreciating cars that are expensive, relevant to them. What was your justification, and do you have any regrets?
I’m now in a position where my mortgage is paid off, my pension is on track, and I saved enough to buy something reasonably expensive (to me, at least).
I want something new (or nearly new), big, comfortable and full of tech, rather than the usual two-seat sports car type I’m used to.
The problem is that many cars I’m considering will easily lose £10k a year, maybe even closer to £15k. Although I can afford the outright purchase price and the running costs, the thought of an asset losing £800-1250 a month is a bit alien and scary to me.
For example, one of the cars I'm considering is a brand new BMW 840i, RRP is over £80k, but with discount, the dealer has advertised it for £63k. That’ll be worth £50k in 12 months and £40k in 12 months after that. And whilst I intend to keep it longer, you never know what life will throw at you.
I know the obvious answer to some may be to buy second-hand, but I’ve been to see some approved used examples, and even though they are only 12 months old, they have kerbed wheels and leather that is surprisingly shiny, dirty and cracked. Plus, some of the new LCI (facelifted) cars are much prettier.
So without judging me for my taste in cars, I’d be interested in hearing from PHer’s who have purchased similar fast-depreciating cars that are expensive, relevant to them. What was your justification, and do you have any regrets?
MIght also be worth looking at leasing as then you can know in advance exactly what the cost will be - reality however you do it expensive luxury cars tend to cost a fair bit of money excepting Covid...
The thing is with new cars is that they are great for about a month and then once they pick up a scratch/kerb a wheel and get dirty the new car buzz can easily be forgotten
I would be looking for a lightly used 2 - 5 year old car - no idea what you like apart from the BMW mentioned but there are maybe S class Coupes, Lexus LC500 etc that will still loose money but the less you pay the less you can loose
Have fun
The thing is with new cars is that they are great for about a month and then once they pick up a scratch/kerb a wheel and get dirty the new car buzz can easily be forgotten
I would be looking for a lightly used 2 - 5 year old car - no idea what you like apart from the BMW mentioned but there are maybe S class Coupes, Lexus LC500 etc that will still loose money but the less you pay the less you can loose
Have fun
It’s not daft if you enjoy it and can otherwise afford it.
Though I personally don’t see why you wouldn’t buy a slightly older example that has already done its massive chunk of depreciation so you’re on a shallower part of the depreciation curve.
With the 8 series example, I’d get a two year old one. But I can’t justify 10k depreciation a year. Maybe you can. There are no wrong answers here.
Though I personally don’t see why you wouldn’t buy a slightly older example that has already done its massive chunk of depreciation so you’re on a shallower part of the depreciation curve.
With the 8 series example, I’d get a two year old one. But I can’t justify 10k depreciation a year. Maybe you can. There are no wrong answers here.
I mean using your own figures 10-15k would pay for many wheel resprays on a used model
I guess the way I view things is, would you take a used car with £15,000 cash sat on the passenger seat.
There only has to be one used example that’s in good condition as well. So you might see 10 poor examples but only need 1 good example to buy
I guess the way I view things is, would you take a used car with £15,000 cash sat on the passenger seat.
There only has to be one used example that’s in good condition as well. So you might see 10 poor examples but only need 1 good example to buy
Why not drop £80k on something that’s not going to halve it’s value in two years? I know you said not to judge you on the choice of car but it seems somewhat odd to be going into this with eyes wide open as you are, and choosing a car that’s altogether not-that-special…. There is no way I’d personally overlook a 997, Nissan GTR or a DB11 for an 840 when I know all three will depreciate slower.
It’s likely to bother you enough to spoil the enjoyment.
I haven’t had anything new for lots of money but I have recently got a new expensive motorbike. The positives of it are balanced out by the negative money feelings for me so in many ways I’m not in any better a position than I would be with a cheaper bike.
I kind of knew that before I got it.
I haven’t had anything new for lots of money but I have recently got a new expensive motorbike. The positives of it are balanced out by the negative money feelings for me so in many ways I’m not in any better a position than I would be with a cheaper bike.
I kind of knew that before I got it.
I’d look at a 911, even base model cars are holding up well but something slightly above, say a carrera S or 4S, maybe a 991.1 or if not averse to turbos a 991.2 or even a base 992.
BMW cars will nose dive, but if you have an itch then maybe an M5, sleeper car but incredibly fun, or an M2 but they are still pretty desirable so prices are high
BMW cars will nose dive, but if you have an itch then maybe an M5, sleeper car but incredibly fun, or an M2 but they are still pretty desirable so prices are high
I have always bought new.
Obviously not financially sound if the depreciation worries you, though I keep my cars for a very long time usually. Still, am aware that big coupes and luxury saloons depreciate quickly and simply build that calculation as to whether the experience is worth it.
Obviously not financially sound if the depreciation worries you, though I keep my cars for a very long time usually. Still, am aware that big coupes and luxury saloons depreciate quickly and simply build that calculation as to whether the experience is worth it.
The way I would look at this is that I should be able to find brilliant used examples of any mass-market car.
It feels like you have been put off by the condition of those used cars, of which there are 2 possibilities:
1. Bad examples. Give it time or spread the net further.
2. Genuinely they wear that badly! In which case do you want to buy new of something that will pretty much instantly show its age? Is your backside unique or are you going to want to mollycoddle it?
I think I'm a delayed gratification type though so I don't have any issue with checking (2) isn't worrying me and then doubling down on (1)
Regarding the whole sharp intake of breath on the depreciation thing - you pay the cost to be the boss! But yes, I couldn't stomach that much depreciation. If you've been poor or grafted or been careful to get yourself into your current position it's really not hard to change those ingrained habits. Pick a cost you can live with and pull the trigger.
It feels like you have been put off by the condition of those used cars, of which there are 2 possibilities:
1. Bad examples. Give it time or spread the net further.
2. Genuinely they wear that badly! In which case do you want to buy new of something that will pretty much instantly show its age? Is your backside unique or are you going to want to mollycoddle it?
I think I'm a delayed gratification type though so I don't have any issue with checking (2) isn't worrying me and then doubling down on (1)
Regarding the whole sharp intake of breath on the depreciation thing - you pay the cost to be the boss! But yes, I couldn't stomach that much depreciation. If you've been poor or grafted or been careful to get yourself into your current position it's really not hard to change those ingrained habits. Pick a cost you can live with and pull the trigger.
If you buy new you are going to lose a stack of money. The more expensive the car, the bigger the stack. ‘‘Twas always thus.
“If you can’t take a joke you shouldn’t have joined” as they used to say in the army.
The only way to combat that is if you buy something that is still going to be in big demand when you come to sell. Get ahead of the curve, so to speak.
Limited edition Porches, Ferraris, etc seem to fall in to that category.
But to be allowed to buy such cars it seems that you have to lose all self respect in your sycophantic buttering up of those who control who gets em.
I couldn’t do it personally.
“If you can’t take a joke you shouldn’t have joined” as they used to say in the army.
The only way to combat that is if you buy something that is still going to be in big demand when you come to sell. Get ahead of the curve, so to speak.
Limited edition Porches, Ferraris, etc seem to fall in to that category.
But to be allowed to buy such cars it seems that you have to lose all self respect in your sycophantic buttering up of those who control who gets em.
I couldn’t do it personally.
mrmichaelsankey said:
BMW cars will nose dive, but if you have an itch then maybe an M5, sleeper car but incredibly fun, or an M2 but they are still pretty desirable so prices are high
I suspect M2 are going to carry on holding their value well. Particularly manuals. If I bought a manual OG M2 today I would budget £250 to £300 / month depreciation for a longish ownership. Perhaps less if bought very well / privately.You don't mention miles and how you intend using it? Will it be garaged?
If so go for the 'specialness' of a car, I'm thinking M635csi a really good car can be sought from a specialist for the same money. You would almost certainly get all your money back if you sold and i gtee you will feel far more of an event driving it than the modern version.
Just a thought
If so go for the 'specialness' of a car, I'm thinking M635csi a really good car can be sought from a specialist for the same money. You would almost certainly get all your money back if you sold and i gtee you will feel far more of an event driving it than the modern version.
Just a thought
Someone has to buy them new so the rest of us can buy them second hand, LOL.
I used to buy new every 3 years but I sat down one day and worked out the cost and I started to twitch. I now buy 18-24 month old and keep them for 5 years to average out the depreciation. The M135I lost £10,000 in 5 years, still £166 a month but better than £400 a month to PCP/lease.
I've had the current C63S for a couple of years and I think it's worth about the same as I paid for it but I don't expect that to last for long.
The choice is yours, if you have the money and want to buy a shiny new toy do it, life's to short!!!
I used to buy new every 3 years but I sat down one day and worked out the cost and I started to twitch. I now buy 18-24 month old and keep them for 5 years to average out the depreciation. The M135I lost £10,000 in 5 years, still £166 a month but better than £400 a month to PCP/lease.
I've had the current C63S for a couple of years and I think it's worth about the same as I paid for it but I don't expect that to last for long.
The choice is yours, if you have the money and want to buy a shiny new toy do it, life's to short!!!
New cars are boring
Get one of these, repairs/maintenance will be much less than the depreciation that you'd lose on an 8 series
Ferrari 550 Maranello
https://www.autotrader.co.uk/car-details/202301123...
Ferrari 360 Spider
https://www.autotrader.co.uk/car-details/202209129...
Honda NSX
https://www.autotrader.co.uk/car-details/202301183...
TVR Sagaris
https://www.autotrader.co.uk/car-details/202212062...
Morgan Aero 8
https://www.autotrader.co.uk/car-details/202212062...
Aston Martin V12 Vantage
https://www.autotrader.co.uk/car-details/202212132...
Porsche Cayman GT4
https://www.autotrader.co.uk/car-details/202212012...
Get one of these, repairs/maintenance will be much less than the depreciation that you'd lose on an 8 series
Ferrari 550 Maranello
https://www.autotrader.co.uk/car-details/202301123...
Ferrari 360 Spider
https://www.autotrader.co.uk/car-details/202209129...
Honda NSX
https://www.autotrader.co.uk/car-details/202301183...
TVR Sagaris
https://www.autotrader.co.uk/car-details/202212062...
Morgan Aero 8
https://www.autotrader.co.uk/car-details/202212062...
Aston Martin V12 Vantage
https://www.autotrader.co.uk/car-details/202212132...
Porsche Cayman GT4
https://www.autotrader.co.uk/car-details/202212012...
I'm in a similar position albeit at a lower budget level. The most I've ever paid for a car was £11k with my current car having cost just £9k in 2020. Now I find myself in a fortunate position where I could spend easily up to £30k on a new car but it just doesn't sit right with me. Even £20k seems wrong especially in these uncertain times.
If its on your mind then I'd say it's not the right thing to do. The only way you could make it work would be to plan on keeping it a decade or more. Even then there's the chance that big ICE cars like that could be pretty much worthless in the next decade, who knows?
If its on your mind then I'd say it's not the right thing to do. The only way you could make it work would be to plan on keeping it a decade or more. Even then there's the chance that big ICE cars like that could be pretty much worthless in the next decade, who knows?
I think that different people will have different views and approaches to depreciation.
Car will inevitably cost money to buy, use, maintain & run. Some cars will cost more than others, and will attract a different demographic of buyer.
Some buyers will be more focused on costs, value for money, rate of depreciation, etc, while other buyers will focus on other attributes that more meet their requirements. Rate of depreciation may not be a factor for some at all.
From a personal point of view, the last four of my cars have been bought brand new, and beyond being happy with the purchase price, I am not too concerned with depreciation. When I come to sell / part-ex the current car, the residual value will be considered a bonus.
I think that if you are going to dwell on the monthly depreciation cost, it is likely to diminish your enjoyment of the car.
Car will inevitably cost money to buy, use, maintain & run. Some cars will cost more than others, and will attract a different demographic of buyer.
Some buyers will be more focused on costs, value for money, rate of depreciation, etc, while other buyers will focus on other attributes that more meet their requirements. Rate of depreciation may not be a factor for some at all.
From a personal point of view, the last four of my cars have been bought brand new, and beyond being happy with the purchase price, I am not too concerned with depreciation. When I come to sell / part-ex the current car, the residual value will be considered a bonus.
I think that if you are going to dwell on the monthly depreciation cost, it is likely to diminish your enjoyment of the car.
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