2 year old used car. Poor value?
Discussion
I'm looking at what to run as my next (company allowance funded) car.
'New cars are a mugs game' is the accepted thinking right? But is a 2-year AUC actually even worse than a very slightly-discounted new one?
The sums (probably riddled with errors but you get the idea..):
e.g. VAG 2.0T with DSG 11k miles per year. Keep for 3 years.
A. New price £26,800 0miles
B. 2 year old approved used £19,800 21000miles
Service up to date, 5mm tyres etc.
Service cost: A:
3 year service plan £299. Pair of tyres £250.
= £550
Service cost:B:
Cambelt @ 4 years £500. Pair of tyres £250. Brakes @ 45k miles £250. Gearbox oil @40k £150. 2 years extended warranty £1000. Oil service £140 Inspection service £240. 2 MOTS £100 (if nothing is needed)
= £2630
£2630 - £550 = £2080 / 36 = £57
Value after 3 years (finance broker PCP GFV quotes) :
A. £14,200
B. £8,500
Depreciation + service A = £365pm
Depreciation + service B = 11,300 / 314pm + £57 = £370pm
So, drive a brand new 61 plate car with manufacturer warranty and no MOTS needed for £365pm, or a 59 plate with 'insured' warranty for £370pm???
'New cars are a mugs game' is the accepted thinking right? But is a 2-year AUC actually even worse than a very slightly-discounted new one?
The sums (probably riddled with errors but you get the idea..):
e.g. VAG 2.0T with DSG 11k miles per year. Keep for 3 years.
A. New price £26,800 0miles
B. 2 year old approved used £19,800 21000miles
Service up to date, 5mm tyres etc.
Service cost: A:
3 year service plan £299. Pair of tyres £250.
= £550
Service cost:B:
Cambelt @ 4 years £500. Pair of tyres £250. Brakes @ 45k miles £250. Gearbox oil @40k £150. 2 years extended warranty £1000. Oil service £140 Inspection service £240. 2 MOTS £100 (if nothing is needed)
= £2630
£2630 - £550 = £2080 / 36 = £57
Value after 3 years (finance broker PCP GFV quotes) :
A. £14,200
B. £8,500
Depreciation + service A = £365pm
Depreciation + service B = 11,300 / 314pm + £57 = £370pm
So, drive a brand new 61 plate car with manufacturer warranty and no MOTS needed for £365pm, or a 59 plate with 'insured' warranty for £370pm???
Well done, you've just sold yourself a new car on a PCP!
I suppose many people wouldn't bother with the warranty and wouldn't take into account brakes & tyres - how often do we see posts on here with "what car for absolute max budget £2K"? And you ask, what about repairs etc and they say "what repairs?".
I reckon car B looks too expensive vs new price - if that's how much they are, then fair enough, you can't move the market. I did the same thing when I opted out but got a 5mth old Merc that listed at £36K new for £23500.
I suppose many people wouldn't bother with the warranty and wouldn't take into account brakes & tyres - how often do we see posts on here with "what car for absolute max budget £2K"? And you ask, what about repairs etc and they say "what repairs?".
I reckon car B looks too expensive vs new price - if that's how much they are, then fair enough, you can't move the market. I did the same thing when I opted out but got a 5mth old Merc that listed at £36K new for £23500.
When I bought my Audi A6 I did the sums comparing new with used, and the discounts coupled with Audi-sponsored finance deals available on new made far more economic sense than those available for used cars. So I bought a new one.
If you're paying cash from savings (i.e. with no debt) then buying new is indeed hard to justify on a financial basis, but if debt-based funding is involved then a consideration of the overall cost for three years' ownership blurs the choice considerably.
If you're paying cash from savings (i.e. with no debt) then buying new is indeed hard to justify on a financial basis, but if debt-based funding is involved then a consideration of the overall cost for three years' ownership blurs the choice considerably.
Real world figures will be very different.
You're working on no replacement consumables on the new car vs replacing on the older car... It's only a guess that it isn't the other way around.
Also, after 1 year of owning the older car you could take it to an indie or fix / service it yourself.
Plus you may get some dents and scratches on a car you own, which you ignore, but which have to be fixed before returning a leased car.
You're working on no replacement consumables on the new car vs replacing on the older car... It's only a guess that it isn't the other way around.
Also, after 1 year of owning the older car you could take it to an indie or fix / service it yourself.
Plus you may get some dents and scratches on a car you own, which you ignore, but which have to be fixed before returning a leased car.
VeeFour said:
Plus you may get some dents and scratches on a car you own, which you ignore, but which have to be fixed before returning a leased car.
That's a good point. VAG Finance tried it on big-time when my brother's absolutely mint 2yr old Golf went back. They're legendary for it, apparently.Warranties don't tend to cover worn brakes/suspension parts etc. that fail an MOT.
The more I think about it a 2 year old car makes no sense - up to company max of 4 years old is probably the way to go financially (like I did last time).
Though if I could get a 2 year old 'no story' Mk6 gti 5-door auto for 13k then I could change my mind. Links please - I have only been looking on VW's site so far.
The more I think about it a 2 year old car makes no sense - up to company max of 4 years old is probably the way to go financially (like I did last time).
Though if I could get a 2 year old 'no story' Mk6 gti 5-door auto for 13k then I could change my mind. Links please - I have only been looking on VW's site so far.
homerjay said:
27k new then 20k at 2year old?
It's certainly not a car I'd be buying
What's the trade value? 14k? They can get stuffed
here you nail it; buying used cars from a franchised dealer is nearly as dumb as buying new. Real world example; just buying a Freelander II. My choice was betweenIt's certainly not a car I'd be buying
What's the trade value? 14k? They can get stuffed
58 plate Td4 HSE with 31k miles from franchised main dealer = £22k
58 plate Td4 HSE with 34k miles from via a car sourcer = £16k
Both FSH and identical spec. Even after spending £600 on a warranty direct super-duper covers everything warranty it is still a no-brainer
Fox- said:
The flaw is that no run of the mill car thats only 26k new would be 20k at 2 years old.
It would be in most other countries - only the UK seems to suffer from harsh new car depreciation. Due to our dated plates, I think, causing too many people to buy new cars and used cars appearing to age very quickly.in the US cars depreciate pretty quickly as well - a 10 year old car is near worthless (as here).
this is a bit of a special case as you're after a car that was brand new (ie new design) 2 years ago. the first of any car tends to hold value a bit better than the others as people will pay a certain figure to get into the car. The GTIs I found for 13k were mk5s, but they show more typical depreciation figures (after 2 years most cars are worth ~50% of new price)
this is a bit of a special case as you're after a car that was brand new (ie new design) 2 years ago. the first of any car tends to hold value a bit better than the others as people will pay a certain figure to get into the car. The GTIs I found for 13k were mk5s, but they show more typical depreciation figures (after 2 years most cars are worth ~50% of new price)
5lab said:
in the US cars depreciate pretty quickly as well - a 10 year old car is near worthless (as here).
You'll probably turn out to have lived in the US for years, but other people have commented how even cars that would be scrapped here will sell for a couple of $K in the US.And 3yr old BMWs & Mercs sell for about the same price as here, despite being cheaper in the US when new.
It depends on the depreciation curve of the car. For a fair number of desirable recent German cars they cling on fairly tightly in years 1 and 2, hence as per your example aren't great value used. For others they loose a vast amount of value in those years, so make a lot of sense buying at 24 months.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff