Buying new vs used
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From: Tunbridge Wells
Buying new vs used
I'm in the process of changing my beater and am considering a new A3 Sportback (the 5 door / "mini estate" version).
The age old debate of buying new vs used is going through my mind. I conclude new is better value if you look at running costs over a 3 year / 30k mile period. This is the same argument I used for buying my beater new, but have times changed so that my figures are giving me an unrealistc view?
Buying new
So the A3 is around £20k new, available for ~£18k with discounts. The current trade value of a 3 year / 30k mile car on Glasses guide is around £10k. So assume that the car can be sold privately in 3 years time for £11k.
So the running costs are:
Depreciation = £7k (£18k - £11k)
Road tax = £35 x 3 = £105 (the new 2.0 tdi audi falls under band C!)
Servicing = £250 x 3 = £750
Consumables = £1000 (tyres and brakes)
Insurance = £500 x 3 = £1500
Fuel = £3000 (roughly, over 30k miles)
Total = £13355 -say around £13.5k over three years.
Buying used
The same car can be bought privately for £11k (for sale at dealers for £13k+). Current trade value on a 6 year / 60k mile car is around £6.5k. So using the same reasoning as above assume it can be sold privately for £7k.
Depreciation = £4k (£11k - £7k)
Road tax = £125 x 3 = £375 (ie higher tax band than new)
Servicing = £250 x 3 + £400 = £1150 (include cost of cambelt change?)
Consumables = £1500 (tyres and brakes will be part worn on a used car, so higher cost)
Insurance = £500 x 3 = £1500 (same)
Fuel = £3500 (older car/engine is ~20% less economical than new)
Budget for out of warranty repairs = £500 (possibly on the low side)
Total = £12525 - say around £12.5k over three years.
So the three year running costs are likely to be £13.5k for a new car vs £12.5k for a used car. In short, the higher running costs of a used car close the gap. So buying new "costs" £1000 more in total - or £330 per year - which seems like pretty good value for all the obvious new car benefits.
In terms of risks - yes, the depreciation on the new car may be more than expected. But then by a similar measure the out-of-warranty repair cost on the used car may be more than expected. So that roughly balances out.
So tell me (if you've made it this far without getting too bored) where's the catch?
The age old debate of buying new vs used is going through my mind. I conclude new is better value if you look at running costs over a 3 year / 30k mile period. This is the same argument I used for buying my beater new, but have times changed so that my figures are giving me an unrealistc view?
Buying new
So the A3 is around £20k new, available for ~£18k with discounts. The current trade value of a 3 year / 30k mile car on Glasses guide is around £10k. So assume that the car can be sold privately in 3 years time for £11k.
So the running costs are:
Depreciation = £7k (£18k - £11k)
Road tax = £35 x 3 = £105 (the new 2.0 tdi audi falls under band C!)
Servicing = £250 x 3 = £750
Consumables = £1000 (tyres and brakes)
Insurance = £500 x 3 = £1500
Fuel = £3000 (roughly, over 30k miles)
Total = £13355 -say around £13.5k over three years.
Buying used
The same car can be bought privately for £11k (for sale at dealers for £13k+). Current trade value on a 6 year / 60k mile car is around £6.5k. So using the same reasoning as above assume it can be sold privately for £7k.
Depreciation = £4k (£11k - £7k)
Road tax = £125 x 3 = £375 (ie higher tax band than new)
Servicing = £250 x 3 + £400 = £1150 (include cost of cambelt change?)
Consumables = £1500 (tyres and brakes will be part worn on a used car, so higher cost)
Insurance = £500 x 3 = £1500 (same)
Fuel = £3500 (older car/engine is ~20% less economical than new)
Budget for out of warranty repairs = £500 (possibly on the low side)
Total = £12525 - say around £12.5k over three years.
So the three year running costs are likely to be £13.5k for a new car vs £12.5k for a used car. In short, the higher running costs of a used car close the gap. So buying new "costs" £1000 more in total - or £330 per year - which seems like pretty good value for all the obvious new car benefits.
In terms of risks - yes, the depreciation on the new car may be more than expected. But then by a similar measure the out-of-warranty repair cost on the used car may be more than expected. So that roughly balances out.
So tell me (if you've made it this far without getting too bored) where's the catch?
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Joined: Nov 2002
Posts: 16,369
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From: Tyne Valley
Beaters should not cost £20k IMO
If you must go VAG I'd buy a Golf for around £2k.
Or an ITR with £0 depreciation, 35-40mpg, £300 insurance, and around £500 on repairs. Saving you around £10000 over 3 years and giving you a whole load more fun
HTH
If you must go VAG I'd buy a Golf for around £2k.
Or an ITR with £0 depreciation, 35-40mpg, £300 insurance, and around £500 on repairs. Saving you around £10000 over 3 years and giving you a whole load more fun
HTH
Joined: May 2002
Posts: 11,504
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From: Sunny Norf*ck
Originally Posted by Bassoctupus
Beaters should not cost £20k
What would be more interesting is the next two 3-year points i.e. 6 years old versus 9 years old. Or even 15 yo
Then you would be getting into beater territory
But the imponderables multiply ...
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we just bought a 55 plate 2.0tdi 'beater'. with px paid in the order of £6-6.5k with 120k on clock - full Audi history etc as ex lease car. All seems rosy until this monring when coolant light came on....no probs fixed that, then did a little bit of research on 'google' and seems the audi motors are crap and the cylinder heads go for fun. at circa £2k to replace, we could be staring at a nice big bill soon. Am getting tested and will be taking back to dealer if any fault diagnosed as only had it 10 days!!!
Other than that, its a lovely car, but personally for a beater would not buy new and would go into the 6 year territory to get a good value car where most of the depreciation has been and gone...(most as a % of original value...).
We plan to keep ours 'as a reliable' and economical 4 door....I wait in anticipation.....
Other than that, its a lovely car, but personally for a beater would not buy new and would go into the 6 year territory to get a good value car where most of the depreciation has been and gone...(most as a % of original value...).
We plan to keep ours 'as a reliable' and economical 4 door....I wait in anticipation.....
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From: omnipresent
You're not comparing like with like for a start as they aren't the same car.
You've probably underestimated the depreciation on the new car. However there are more unknows on running costs for an older car. Generally an older car will on average be cheaper than new.
I don't know why you would bother wasting £18k on such blandness
You've probably underestimated the depreciation on the new car. However there are more unknows on running costs for an older car. Generally an older car will on average be cheaper than new.
I don't know why you would bother wasting £18k on such blandness
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Sure, it lovely to get a new car. Buy they depreciate a lot, and when you buy new the price has a habit of sneaking up and up as you add optional extras.
Rather than new I tend to look for 6 moth old demo models or early trade ins.
My Audi was 6 months old when I got it, full alcantara leather, sports pack suspension, heated seats, better stereo etc etc.
And it cost me 6k less than the basic model would have cost with none of those and still had the full service warranty for 2.5 years.
Oh, you might have got your tax wrong BTW, I *think* that you have to pay double tax on the first year now?
So, my first suggestion is to not buy new – but to buy nearly new.
It depends what you want from a ‘beater’.
If I assume it’s a 5 door car that will start in the morning is unlikely to break down and is used for filling with shopping, bags of sand from B&Q, wet wellies, new TV, and bags of rubble to take to the tip . .. then I wouldn’t be buying anything new or nearly new.
I’d look for something 6-10 years old with proven reliability and a decent service history at a cost of about 5k.
On the other hand, if I needed to replace the Audi for something that is a sensible second car, an enjoyable car but more practical than the S, but also with a bit of luxury then I’d look for a nearly new premium brand – and I wouldn’t call it a beater..
(my beater is a 5k 12 year old Hilux Surf 4x4)
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From: Frustration
Originally Posted by woojah,Jan 28 2010, 01:02 AM
I'm in the process of changing my beater and am considering a new A3 Sportback (the 5 door / "mini estate" version).
The age old debate of buying new vs used is going through my mind. I conclude new is better value if you look at running costs over a 3 year / 30k mile period. This is the same argument I used for buying my beater new, but have times changed so that my figures are giving me an unrealistc view?
Buying new
So the A3 is around £20k new, available for ~£18k with discounts. The current trade value of a 3 year / 30k mile car on Glasses guide is around £10k. So assume that the car can be sold privately in 3 years time for £11k.
So the running costs are:
Depreciation = £7k (£18k - £11k)
Road tax = £35 x 3 = £105 (the new 2.0 tdi audi falls under band C!)
Servicing = £250 x 3 = £750
Consumables = £1000 (tyres and brakes)
Insurance = £500 x 3 = £1500
Fuel = £3000 (roughly, over 30k miles)
Total = £13355 -say around £13.5k over three years.
Buying used
The same car can be bought privately for £11k (for sale at dealers for £13k+). Current trade value on a 6 year / 60k mile car is around £6.5k. So using the same reasoning as above assume it can be sold privately for £7k.
Depreciation = £4k (£11k - £7k)
Road tax = £125 x 3 = £375 (ie higher tax band than new)
Servicing = £250 x 3 + £400 = £1150 (include cost of cambelt change?)
Consumables = £1500 (tyres and brakes will be part worn on a used car, so higher cost)
Insurance = £500 x 3 = £1500 (same)
Fuel = £3500 (older car/engine is ~20% less economical than new)
Budget for out of warranty repairs = £500 (possibly on the low side)
Total = £12525 - say around £12.5k over three years.
So the three year running costs are likely to be £13.5k for a new car vs £12.5k for a used car. In short, the higher running costs of a used car close the gap. So buying new "costs" £1000 more in total - or £330 per year - which seems like pretty good value for all the obvious new car benefits.
In terms of risks - yes, the depreciation on the new car may be more than expected. But then by a similar measure the out-of-warranty repair cost on the used car may be more than expected. So that roughly balances out.
So tell me (if you've made it this far without getting too bored) where's the catch?
The age old debate of buying new vs used is going through my mind. I conclude new is better value if you look at running costs over a 3 year / 30k mile period. This is the same argument I used for buying my beater new, but have times changed so that my figures are giving me an unrealistc view?
Buying new
So the A3 is around £20k new, available for ~£18k with discounts. The current trade value of a 3 year / 30k mile car on Glasses guide is around £10k. So assume that the car can be sold privately in 3 years time for £11k.
So the running costs are:
Depreciation = £7k (£18k - £11k)
Road tax = £35 x 3 = £105 (the new 2.0 tdi audi falls under band C!)
Servicing = £250 x 3 = £750
Consumables = £1000 (tyres and brakes)
Insurance = £500 x 3 = £1500
Fuel = £3000 (roughly, over 30k miles)
Total = £13355 -say around £13.5k over three years.
Buying used
The same car can be bought privately for £11k (for sale at dealers for £13k+). Current trade value on a 6 year / 60k mile car is around £6.5k. So using the same reasoning as above assume it can be sold privately for £7k.
Depreciation = £4k (£11k - £7k)
Road tax = £125 x 3 = £375 (ie higher tax band than new)
Servicing = £250 x 3 + £400 = £1150 (include cost of cambelt change?)
Consumables = £1500 (tyres and brakes will be part worn on a used car, so higher cost)
Insurance = £500 x 3 = £1500 (same)
Fuel = £3500 (older car/engine is ~20% less economical than new)
Budget for out of warranty repairs = £500 (possibly on the low side)
Total = £12525 - say around £12.5k over three years.
So the three year running costs are likely to be £13.5k for a new car vs £12.5k for a used car. In short, the higher running costs of a used car close the gap. So buying new "costs" £1000 more in total - or £330 per year - which seems like pretty good value for all the obvious new car benefits.
In terms of risks - yes, the depreciation on the new car may be more than expected. But then by a similar measure the out-of-warranty repair cost on the used car may be more than expected. So that roughly balances out.
So tell me (if you've made it this far without getting too bored) where's the catch?
For a start, 20% more economical for a new engine?
Servicing can be done by a nice independant for a helluvalot less - i'd do it myself for free
Tyres, well, I reckon on you only using a set of fronts.
Insurance would be slightly less because, assuming you go comprehensive, the value of the car is less.
But you did miss out on £120 of MOT test!
So you reckon saving £1000.
I reckon on more about £3000.
£3k over 3 years is about £85/month.
So if £85/month is affordable, i'd suggest getting the new car because it is 100% hassle free.
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From: Tunbridge Wells
You have not factored the cost of finance / opportunity cost of not being able to invest your cash elsewhere.
If you need to finance then the finance deals on a new car could be 0 percent. Whereas finance on a used car could be 8 percent or so.
= more incentive to buy new
if you have cash then what could you earn with it if you invested it elsewhere / offset a mortgage. Either way the lower cost the car the better
= more incentive to buy used
Also have you got anything to trade? You may get better deal trading for new and a lot less hassle.
Finally if you are just looking at 3 years only / 10k have you checked lease costs. You might be surprised. I got an offer for a 1.9 tdi sportback for 200 something a month which may work out cheaper than owning.
If you need to finance then the finance deals on a new car could be 0 percent. Whereas finance on a used car could be 8 percent or so.
= more incentive to buy new
if you have cash then what could you earn with it if you invested it elsewhere / offset a mortgage. Either way the lower cost the car the better
= more incentive to buy used
Also have you got anything to trade? You may get better deal trading for new and a lot less hassle.
Finally if you are just looking at 3 years only / 10k have you checked lease costs. You might be surprised. I got an offer for a 1.9 tdi sportback for 200 something a month which may work out cheaper than owning.
Joined: Mar 2001
Posts: 31,181
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From: Hertford
Indeed; that's why everybody in the country drives dull grey german things - the leases are brilliant.
Grab them whilst you can; they're gonna catch a cold one day.
BTW, every time I spec something like that 20 becomes 27 large. WTF is going on?
Grab them whilst you can; they're gonna catch a cold one day.
BTW, every time I spec something like that 20 becomes 27 large. WTF is going on?