Is depreciation still the biggest motoring cost?
Discussion
Its generally stated that it is but, and i am using middling figures here, buy a nearly new car for £12000, run for 2 years, worth maybe £8000. Depreciation equals £4000. Fuel cost, say 12,000 miles per year at 30 mpg = £4,800 with fuel at £6 a gallon.
I know the figs will be different for all, but I would think for many, something like this may well be the case.
Anyone else?
I know the figs will be different for all, but I would think for many, something like this may well be the case.
Anyone else?
I just picking figures. What I am getting at is that until maybe a year or two ago depreciation was far and away the biggest cost whilst for many now the equation may have changed. For instance I now think of many journeys in terms of what it will cost for the round trip but previously just put the fuel on and went. Always hurt when selling a car though.
LS6wetdream said:
depends how old you are, ask someone who's 17 
Yeah, insurance can be a real killer if you're younger, live in a high-risk area, drive a high-risk car or have claims/points/other offences - tho even then it probably won't keep up with many cars first 1-2 years of depreciation 
Give a car a bit longer - into year 3-4 - and the depreciation will settle a bit (as the maintenance bills start to eat the money instead) - it's this sort of thing which makes it hard to decide if it's the biggest issue, really.
Depreciation is an insidious thing - buyers are insulated from the brunt of it through the way the trade-in system works, PCPs and other stuff which is ever-more common for new car buyers. I know people who have convinced themselves they are getting a new car every 2/3 years and it's not costing them a fortune but it IS costing them a fortune, they just don't see it as a single BIG chunk of money (or even what % of their monthly payments it represents).
Maybe cars should have a full breakdown of their actual cost included on the screen (in the way that places like Brighthouse have to outline their costs). I was looking in the window of a Brighthouse yesterday and was quite amazed at the way they could present an iPad2 as an item which will cost you - wait for it - wait for it - £1200+!!!!!!!!!!!!!!!
Clarity in car showrooms - what would THAT kick-off then?
Thankyou4calling said:
I just picking figures. What I am getting at is that until maybe a year or two ago depreciation was far and away the biggest cost whilst for many now the equation may have changed. For instance I now think of many journeys in terms of what it will cost for the round trip but previously just put the fuel on and went. Always hurt when selling a car though.
Depreciation hasn't really changed - fuel prices have gone-up 10%+ in that same time - so yes, it's more of a factor Worse still - it's a more OBVIOUS thing, because people have to pay for fuel on-the-spot - and thus the ever greater obsession with MPG and diesels (regardless of other factors)...
Jasandjules said:
I wouldn't have thought a 17 year old would be buying a brand new 12k car.
Au contraire...I see plenty of kids starting their first job and signing-up for whatever deal is being offered on the new Corsa/Punto/Micra or the like.
It's not always the most basic model either (which in the case of the Corsa is most of £12K anyway).
It's worth remembering that the crazy insurance premiums are NOT down to the value of the car, but the likely damage you'll inflict on other people's - and that's the same in either case.
In fact, new cars often attract favourable (not necessarily less but not that much more either) premiums compared to older cars because they know you'll probably treat it better - you're LESS likely to prang your shiny-new-car than you are a 12-year-old s
t box. Then there's the 'free insurance' deals (not usually on offer to 17-year-olds - but sometimes).My recent purchases and the depreciation.
cavalier mk2 - £6.64 sold for £180 after 6 months.
Cavalier mk2 - £40 - sold for £350 after 3 year
Astra mk3 £900 - Insurance gave me £900 after 3 years
Cavalier mk3 - Was Free (but worth about £2K in 2000 when given it) worth about £400 now
MX5 Cost £15002 year back, worth about £1800
Mini 998 cost £1800 10 months ago worth about £1800 now.
Volvo S40 Cost £350 sold it 6 months later with broken gearbox for £350
Which explains why I'm bloody nervous with a £5K budget for a family size Diesel Car. Looking at alfa 156 JTD's and quite frankly I'm scared of loosing £2K in 4 years (which is likely)
cavalier mk2 - £6.64 sold for £180 after 6 months.
Cavalier mk2 - £40 - sold for £350 after 3 year
Astra mk3 £900 - Insurance gave me £900 after 3 years
Cavalier mk3 - Was Free (but worth about £2K in 2000 when given it) worth about £400 now
MX5 Cost £15002 year back, worth about £1800
Mini 998 cost £1800 10 months ago worth about £1800 now.
Volvo S40 Cost £350 sold it 6 months later with broken gearbox for £350
Which explains why I'm bloody nervous with a £5K budget for a family size Diesel Car. Looking at alfa 156 JTD's and quite frankly I'm scared of loosing £2K in 4 years (which is likely)
Depreciation will normally be 50% of the cars value over three years regardless of age. Sensible to assume it too.
Clearly if you only buy a £1k car and do 20k miles even if the car were worthless in a year the fuel would be many multiples of that.
So it's a combination of annual milage and purchase price.
I'd guess if he cars value is >£7k and you do 15k a year and it's a run of the mill car then fuel and depreciation may be very similar mpg would clearly come into play but as a guide I think it's sensible.
Clearly if you only buy a £1k car and do 20k miles even if the car were worthless in a year the fuel would be many multiples of that.
So it's a combination of annual milage and purchase price.
I'd guess if he cars value is >£7k and you do 15k a year and it's a run of the mill car then fuel and depreciation may be very similar mpg would clearly come into play but as a guide I think it's sensible.
Depreciation on most mass market stuff is normally at least 50% with figures of 60-70% not being uncommon depending on what car you buy IMO.
If you buy new, sell after 3 years and do average miles, depreciation will still be the biggest cost IMO. The only way to make a new car financially sensible is to buy it and keep it for a good few years.
The longest my parents ever kept a car was an E36, bought new in 1996 and sold for about £1,200 10 years later. That was relatively sensible depreciation I reckon.
If you buy new, sell after 3 years and do average miles, depreciation will still be the biggest cost IMO. The only way to make a new car financially sensible is to buy it and keep it for a good few years.
The longest my parents ever kept a car was an E36, bought new in 1996 and sold for about £1,200 10 years later. That was relatively sensible depreciation I reckon.
miniman said:
How much can my £900 car realistically lose?
£900, plus the extra fuel you use because it's old and inefficient. Doing 18000 miles a year in a realiable 19 year old 1.8 cavalier is great, except that I know that I could save £1500 a year on fuel by buying a more modern diesel. IF I work on a 3 year payback, that gives me £4500 to spend. Assuming that I buy a car that I can get 5 years out of before it's worthless, and that I could get 5 years out of the cavalier (it's done 115K and it's a simple 8V so not much to go wrong) owning the wrong car will cost me £3000 over the next 5 years.
But doing 54k in a cavalier in3 years dosnt really mean lots of comfort short braking distance weak air con plus it's will be a 23 year old car so maintence will be more. Ie changing all the rubber on the coolant system perishing due to age.
Also as an old car that would need three services a year doing 18k
Also as an old car that would need three services a year doing 18k
Welshbeef said:
But doing 54k in a cavalier in3 years dosnt really mean lots of comfort short braking distance weak air con plus it's will be a 23 year old car so maintence will be more. Ie changing all the rubber on the coolant system perishing due to age.
Also as an old car that would need three services a year doing 18k
It depends how you define comfort. I can get out of the car after 3 hours behind the wheel and still stand. Also as an old car that would need three services a year doing 18k
The Lack of ABS, makes you very aware of what's happening in front of you.
I use decent oil and can change the oil and filters in under 30 mins. Typically this costs £40 with the oil, and a set of plugs.
Have to say that the suspension is all original so it wallows abit, and there never was aircon, which I would like on about 4 days a year.
All hoses are original. The rear brake shoes are 115K old.
Repairs over last 5 years include. One window regulator - Free from a mate.
One Starter motor. One Battery, one headlamp adjust motor. One set of front calipers after I buggered up a simple pad change (DOH) - ended up with larger pads, discs and calipers from a later 1.8.
And I had to clean out the auto choke coolant hoses which were blocked.
And it will need a bit of welding on one sill for the MOT.
Mr POD said:
miniman said:
How much can my £900 car realistically lose?
£900, plus the extra fuel you use because it's old and inefficient. Doing 18000 miles a year in a realiable 19 year old 1.8 cavalier is great, except that I know that I could save £1500 a year on fuel by buying a more modern diesel. IF I work on a 3 year payback, that gives me £4500 to spend. Assuming that I buy a car that I can get 5 years out of before it's worthless, and that I could get 5 years out of the cavalier (it's done 115K and it's a simple 8V so not much to go wrong) owning the wrong car will cost me £3000 over the next 5 years.
Let's say 10,000 miles, unleaded is 1.31, Diesel is 1.36 a litre.
25 mpg in my 525 = £2,380
40 mpg in a Diesel = £1,544
So £800 difference, and actually I can get 30mpg if I'm careful which halves the difference.
Realistically the difference in fuel might be a grand, two grand? That's the depreciation in a year on a £10,000 diesel runabout.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff