The price of new cars.
 

A respected trader offers two new cars to forum members. The prices quoted attract negative comment and comparison with other makes like Kia and Dacia.

As someone who habitually spends less than £2K on any motor car purchase, I consider anything over £3K 'expensive'! Just my personal opinion, which I do not expect everyone to share, but I would never consider spending 10 times that amount on a depreciating asset.

Mulling this over as I type, two things come to mind:

If I was looking to spend that sort of money on a new motor car for whatever reason, I would be more interested in obtaining 'value for money' than 'price' per se.

Secondly, is this why the 'lease / purchase' type of deals currently available are so popular? For a fixed amount per month you can have the use of a brand new car. That you'll never 'own' it, and that it will cost you more overall because of interest payments, may be acceptable compromises to those people who, for reasons of their own, 'must' have a new car.

Having said that, if I did have £30K to spare with little or no return due to the combined effects of low interest rates and inflation, the temptation to spend it in this way might be hard to resist!

Regards, John.

without someone buying new there would be no used cars for you or other people to buy. As you say it is personal choice but some people (not you) are quite happy to call people who buy new cars stupid or mad for doing this. I personally don't mind not owning the car but just want a reliable car that is safe and will not break down on us leaving us stranded with no way of getting to where we want. I like new cars because I like the gadgets etc . Yes I pay for this privelige but as long as I can afford it then I am happy. As I don't drink and smoke my pleasure is my car (also my wife likes it too or else I wouldn't be buying 1). With a new car warranty for 3 years and either free servicing or road fund licence paid ,it make sense to me to enjoy my motoring with peace of mind. I am nearly 70 so have had my share of old bangers etc so it is nice to have a new car.

They're popular for 3 reasons.

1: People are materialistic - Like to have the latest and greatest and care what people think about them.

2: Cars are getting more expensive and people began to stop buying new about 10 years ago, hence scrappage schemes/the birth of PCP plans.

3: It's very easy to do PCP now. I could walk into pretty much any garage, wack a deposit down and drive off/spec whatever I want.

Back in the good old days you were considered pretty daft taking out a big bank loan to use on just a car, these days though, finance is just the norm, I read on an RAC (or something similar) article that 75% of all cars on the road are on finance now.

There are people I work with who are younger than me, earn far less than me, yet all drive nicer cars than me and I'm only 28! One guy I work with pays over £450 a month to drive an RS4 and he put down a hefty deposit too.

The only benefit I see to PCP is the dealer taking care of any issues, but any second hand car would have to go pretty horrifically wrong to be close to costing what someone on PCP is paying over the 3-4 years.

I got my xc90 which would have cost around 45k new for less than 1/3rd of the cost with leather, electric seats, cruise, sunroof and pretty much everything bar RSE. I bought from a Volvo dealer with a warranty and a years Volvo assistance. I can’t imagine buying a new car and seeing 30k waste away and I could afford to I just think you need to be sill to spend 45k on somenthihn worth so little in 5 it 6 years time...

I nearly baught a new car, volvo v70 se lux, specced it with cloth seats. Sorry sir you cannot down spec a car, only up spec. I was prepared to pay the equivalent of up spacing from cloth to leather to go the other way, but apparently volvo do not allow that. By the time I had specced it the price was the thick end of 34 grand, cash purchase, no finance or part ex.

If for that money I could not have the seats I wanted I don't want your car.

I baught an older model xc70 with cloth faced seats for cash and saved 21 grand.

We decided to upgrade the caravan, again cash sale, no part ex the old van is being passed on within the family. Buying new and prepared to take the hit as it's what we want and will last us till we pack in towing and beyond if we site it. Am aiming for at least 10 years towing then we shall see.
Of course I may drop dead tomorrow in which case the plan is an expensive failier.

I did look at a new XC90, there is no way I consider it worth 60 grand.

So as I am not a keep up with the Jones,s man the fact that I have a 9 year old car towing a 2017 caravan, ( the 2017 model was better specced than the 2018 and a good bit cheaper despite being brand new) matters not to me, it's what we decided to buy and I don't care what others think.

I will however say it's surprising how much it costs to equip a caravan from scratch, as the old one was going to daughter she wanted it as was of course and all the useful things you baught as you went along suddenly need replacing.

Being old fashioned pcp was never a consideration for me, however it suits my non technical daughter down to the ground, 3 years warranty and service deal means only insurance and fuel to worry about rather than the unexpected expense her 6 year old vw was giving her.

Paul.

It's strongly suggested, by many economic experts, that the next "sub-prime" type crash will be in the market of leased cars, it's another house of cards waiting to fall, but I guess only time will tell. For me, I've never paid any more than 5.5K for a car, but it's paid for, it's mine, if anything goes wrong with it, that's my look out, that's a responsibility I readily accept because I have no outstanding debt on it. I buy well maintained, decent marque cars and look after them, there's no way I'd ever even consider a brand new car, it's a waste of money for me, you lose money the minute you drive them away, but each to their own.

I lease through work, my company. Stress free motoring at a fraction of the price I would pay otherwise. It is not ego for brand, no BMW, Audi etc on my drive. My history over the last 10 years has been a mixture of Volvo or Skoda.

If the tax situation on company cars continues to deteriorate then I would buy second hand, a car 1-2 yrs old. I do 20k miles a year and I need a reliable car that is also respectable when I arrive at a customers site. I would not buy new, pricing is too high and the instant drop too big.

I'd consider myself a young person still. We drive older cars, always decent specced big engined, mid range/luxury cars (Volvo V70 P2 + Lexus LS), they don't cost much to buy, have loads of toys, reasonable to maintain too. I don't think I could afford to spend a huge chunk of my wage every month on a car (especially when I didn't own it at the end of the term!!). I'm in the camp that thinks people are daft who buy new, unless they can properly afford it, and I think that wouldn't be a huge percentage of drivers.

A lot of young people complain that today it's harder to get on the property ladder etc. Well yes it probably is if you are chucking so much cash down the drain every month just to drive a new car.

Our society is so wasteful too. Instead of fixing older cars which still have plenty of life in them, they get binned. Bad for the environment, bad for our pockets too!

I guess a lot of people want to show off these days, but I for one don't find it impressive seeing someone in a new car because as previously mentioned, they probably don't even own it!

As for toys in cars, if you buy a decent 2nd hand marque/model it will be fully loaded. Again, for reliability, buy a decent marque/model/example and it will be fine.

If you want new for the sake of having something new, then fair enough I think that is a fair argument if you can afford it. My argument against that is that I personally would be really precious about a car if I bought it new, and it would really upset me if I got a small scratch on an interior part, or a shopping trolley ding etc (things that would inevitably happen with any car ownership!). With my second hand cars, I buy nice examples, but if something happens then i'm really annoyed, but I get over it a bit easier!

Do you not find the tax v.high for all but the smallest diesel vehicles

Hadn’t read it was your own company, you could do 20k in a second hand car and get £7,000 tax free or you could lease and loose the lot.

Also young people realise that they're not going to be owning property any time soon so they plough their money into owning a nice car on PCP & carry on living with their parents instead. To an extent I can't blame them for that.

No, still manageable but I'm a 20% person, I'm not in the 40% bracket. I look closely at the HMRC tables before choosing each car. The tax was a key reason why I'm no longer a Volvo driver. Volvo pricing has gone up and it was becoming an issue. The list price on my Superb is great and the emissions decent, as they have to be now. I've saved by swapping despite the rates going up.

This car is up in two years and I'll review the situation then. I suspect the option then will either be a hybrid or I will buy second hand as suggested. Other options will be taxed too high by then.

I would never purchase a car on PCP. The terms are against you. Better to save up and buy second-hand every couple of years after the gullible who lease have taken the initial hit in price.

Most people can't afford to 'buy' the cars they drive but, are happy to pay monthly for them, even if they have to cut back elsewhere. As a result, knowing that this is the state of the market, if cars were cheaper some market share would be lost to outright purchases. Higher prices mean the lease/PCP market stays strong, forcing people down that path no matter what.

I have done the lease thing on a 3 cars, 1 Astra GTC, 2x Mercedes E350. At the end of this, the PCP, lease etc thing was not for me, and I personally have no idea why anyone would choose this option, as you're still paying thousands a year for something that is not yours. Largely, I'm unimpressed with the true quality of new cars where the gadgets and tech hide the true cheapness of the build on most new cars. I'd happily spend £10-20K on a proper classic like Mercedes 190 Cosworth, BMW E34 M5 but, nothing modern that's for sure!

Its quite funny to see the large number of people with new cars, either their own or on lease/pcp etc that cannot afford tyres and are always begging far in advance if we can save them a pair or two of good quality part worns.

The used market has also shot up quite drastically over the past few years where people are asking daft money for some mundane old used cars. Interestingly even AutoTrader and dealers are by default showing monthly payment prices and seeing some modern used stuff, lets say a 3 series BMW for example, a couple of years old is more expensive on monthly payment examples compared to a new one....

What’s always amazed me over the last 10 to 15 years is that if you actually save up and buy a car, especially from a dealer then you receive a warrenty and with some basic maintenance you can get to the point where a year or 2 down the line you know the car is a good one and you simply hang on to it for 2 years with nil depreciation (or virtually nil), good reliability etc and during god time you save for the next. If the car is rubbish then you simply move it on.

A lease car on the other hand is bought at the most expensive stage and you are constantly paying for a shiny new pin and have to chop it in just when it is at its most reliable!

It does depend on the individual deal and how desperate they are to make that months sales figures. We went into a Fiat dealer to but a second hand 50p for my wife but ended up getting a brand new one for less even before we factor in three years worth of interest on the money sat in the bank. I appreciate that is the exception but always worth having an open mind on these things.

Which is what I did..... A £35k car for £22k with the bits I wanted apart from the colour of the paint and the seat colour scheme. £12k depreciation in 22 months, that’s a serious amount of money in the world of Thong. If it wasn’t for rust on the chassis I wouldn’t have sold my V50 but that’s another story.

TT

Enjoyed reading this thread. When I've previously done the maths for leasing a car I've wondered what I'm missing as I make it a very expensive way to 'buy' a car, yet everyone seems to do it. Not for me though. That 'part-worn' tyres comment above is a killer...

Do the math, lease over 36 months = £14,400. Assuming payments of £400.00 pm. Depreciation on a £30 odd k new car is at least £14,400. Plus no road tax to pay.

My cars costing me £269pm over five years but at the end it’s mine to trade or keep, nooooo balloon payment. Ok, the breakdown cost, servicing etc is at my cost but I still have something to show for it at the end. The way diesels are going to depreciate it’s probably not going to be worth much at the end but we’ll see in four years.
I looked at PCP but living on a terraced street where the local use your bumpers as a parking aid and the odd curious door key accidentally makes contact with your paintwork (yes, mines already been keyed) it’s an added cost when the car has to be handed back. I find the mileage limits a bit low too, 8k is unrealistic for us with the amount of touring we do so buying outright is a better option. I was offered an all singing and dancing V60 CC for £300pm on a 24 month contract but given my cars already been keyed and bunted in a car park it would have straight away added another £750 to the cost of the motor. Nah, I’ll stick to buying em outright and taking my chances.

TT

I'm glad someone buys/leases new cars or else my supply of bangernomics motors would eventually dry up:speechless-smiley-5 Personally I'm left totally unimpressed by most if not all new cars and wouldn't have one even if I had the money to buy one and the will to spend it on such a thing,but then I consider anything over £500 an expensive machine.I've broken this limit twice in my life my first Senator B was £1000 and my XJ6 was £1250.Scared me silly to pay so much but luckily the ones I bought were good 'uns and I ended up owning each for 9yrs apiece and spent nothing on anything other than normal service items.

The problem you will come up against is that very few modern cars will make it to the bangernomics stage of life. Electronic failiers will see the death of many cars, when 1 sensor can cost £400 £500 cars will be very thin on the ground.

Paul.

I agree with you Paul that is the problem with new cars, death by part cost.

With a couple of exceptions, we have always brought our cars for cash but the costs of fixing certain items makes owning them past warranty a risk. The part may be in the scrap yard but quite often now you are not allowed to take the part off yourself and buy ‘off the shelf’ which increases the cost and when fitted might need to be coded to the car with a software tool on a computer, another cost.

Very soon I think, especially with pay per mile taxes coming, choices will become even more limited and the second-hand market even further restricted. That monthly rental or lease cost will be become the entry cost for your own personal transport otherwise it will taxies or the bus.

Exactly, Paul! I was having precisely that conversation with someone at the classic car event in Melton only last night.

I cut my motoring teeth on a '51 flathead Ford in the '60s. While there were no sophisticated electronics, it did require a 'top' overhaul - a relatively quick and easy job - at 10k and a full engine rebuild at 30. Cars of that era generally also exhibited a tendency to rust out in 8 - 10 years as well.

The difference between then and now is that such jobs could usually be carried out easily and cheaply, thus extending the life of the vehicle and allowing this impecunious apprentice for one to purchase his first car for the princely sum of £10 - then the equivalent of two weeks wages!

While old, well-maintained cars were (and are) all well and good, some took the 'make do and mend' culture a step too far, which ultimately resulted in unsafe cars that really should not have been on the road. This situation was addressed in 1960 by the introduction of the - then - 10 year MOT test, which itself caused many such cars to be sent to the scrapyard. This created a source of spares that enabled us to eke another year or two out of our own cars.

Time passed, the digital age dawned, and we all now drive around with computers under our bonnets. Heat and vibration being anathema to delicate electronics, we see an increasing incidence of the failures to which you allude. Essentially, we have, I think, simply exchanged one problem for another - plus ca change. While the quest for ever more complex and sophisticated cars continues, the situation will not improve.

Regards, John.

Very true indeed as I know all too well. My V70 was purchased following my 3 series touring failing it’s MoT. What did it fail on? Rust? Dangerous brakes? No - Emissions, in the old days two minutes twiddling with a screwdriver would have it sorted. Now it has been temporarily mothballed as it could be one of a dozen things and most likely a combination of a few of them. Repair costs doing it DIY will be from £50-£800, to pay someone to do it would add £100-£1000, on an older car it just isn’t worth the risk. I will do the cheap bits but it could end up being scrapped. The car drives perfectly with no obvious fault and was only slightly off on the emissions but would just not drop below the limit. It is such a shame as the car took us to Cornwall and back a week before without the slightest issue. I have restored cars, built kit cars and even built and raced electric endurance cars but even with the software and kit there is only so much that can be done. And new new cars seem even worse.

My thoughts exactly, I weighed up the cost of buying my cars over the last 10 years or so and then looked at leasing and was surprised at the cost. I currently lease a VW Tiguan which worked out overall less in costs over 2 years than I had lost in depreciation in my previous car a Seat Leon which although a brilliant car dodgy knees and being quite low didn't make a good combination. The optimum lease period is 24 months and most people look at a calculation of 25% cost of the RRP price is a good deal, anything below this is very good. People would say that you can buy cars below RRP but their needs to be a basic calculation that every body can use. My XC60 T5 Momentum on order meets the basic formula at 24.7% so for me a good deal and I get to drive a nice car for 2 years with everything covered including VED, agreed their are mileage constraints but I can quite easily keep to the allocated mileage. PCP in my opinion is vastly overrated and very costly compared to leasing and I am surprised that more people don't go for leasing.

My cousin is an independent mechanical engineer working for insurers on insurance fraud claims. (To identify the false, deliberate claims). He says that insurance fraud is insane, seriously beyond what is relayed in the press and TV.

Not only is it the economy and that people are actually poorer than ever despite what appearances may suggest but also, the fact that modern cars are so expensive to repair (the manufacturers know this and its deliberate to ensure punters buy a new one), with the cost of parts (as mentioned by another post) and labour rates comfortably at £100+vat p/hr even for independents that;

1, no one will buy a modern car with faults
2, people haven't got the money to repair them (or even consider taking them to a garage)
3, they are uneconomical to repair past a certain point
4, modern cars are engineered deliberately to be 'throw away' items.
5, yet they owe the owner thousands in their state rather than hundreds - hence insurance fraud becomes a favourite for the scums

I think used cars could end up being much more expensive in the next few years, at some point soon cars built before 2015 (euro 5) will be taxed off the streets, £200 per day tax in Birmingham is on the cars for 2019. That will cause a lot of people to look at car ownership/leasing/finance.

This is just an example of the government and big wigs of industry fleecing the consumer... lead them down a path with a dead end so they are stuffed e.g heard people into certain types of vehicles, then change the rules to heard them into another direction, repeat the cycle. Someone's pockets are being lined nicely and unethically at our expense.

I'll share my experience of the 2013 Astra GTC 2.0 CDTI SRI that I tried the lease option on. (full report here : http://forums.t5d5.org/topic/23967-a...comment-299065

Duration : 3 years - no maintenace
Mileage : 30,000 per annum
Deposit : £1595
Monthly Payment £311 (and a few pence) = £10,263
Total Servicing : £880
Cosumables : £1304 (tyres, wipers, brakes etc)
Total Paid : £14,042

Fuel : I've left this out as you have to put fuel in anything and one can choose if they want a gaz guzzler or a shopping trolley.

Insurance : I've left this out as you have to have insuance but, this crap car and the Merc E350's cost almost twice as much to insure than my modified Volvos!

At the end of this, in my eyes, I've paid £14,042 for 3 years and own nothing for it. Thats about £4681 per year.

Now you can buy an E46/E90 BMW 330/335 petrol/diesel, Volvo R (the proper ones), Audi A8 4.2 pterol/diesel or any anything else depending on your taste and it wont cost £5K in consumables/repairs to run (especially the way 99% of owners look after their cars).

I do 800-1000 miles a week in my Volvo C70 (been doing it for about 7 years now), one has about 250,000 miles on it and outside routine servicing in 250,000 miles its only needed the following despite crusing regularly at nealry twice the speed limit up and down the M40.

1 heater matrix (cost about £500 at volvo)
1 radiator (cost about £400 at Volvo)

I get a car allowance at work so buy an ex company vehicle from an auction that has full dealer service history and a high mileage. I save about 60% plus on the purchase price and end up with a car that when washed and polished looks like new. Put about 100k miles on it over 4 years and its still worth 4 or 5k.

So 4 years motoring for a depreciation of about 10k in total. Not bad for a nice big Volvo.

Have you factored in speeding tickets in your estimate, I think not?
:rolleyes:

I am still of the firm belief that the supply of "bangernomics" type vehicles that I buy will outlast me and that's assuming that the two I have now don't do that anyway!

I am down to only 4 cars now, and each of them were as near as dammit £1300 each. I have tried expensive cars and the running costs go up with the purchase price. Unless I came into more money than I possibly needed, I cannot see myself moving from this price range any year soon.
I have tried expensive cars and was bitten hard by depreciation, never again.
I have probably sold far more old cars for more than I paid for them, than anyone who has bought new - free motoring at its best.
I used to work for a chap who had a new supercharged Jag, and my car at the time cost less than a pair of front tyres for his car, and when it got written off, I got twice what I paid for it back by selling the parts off.