Why do people buy new cars??

[675rrr]

I can undersatnd if its a company car but I can never understand why anyone buys a brand new car only to lose 50 percent of its value within 3 years???

Surely its financially better to buy a 6 month old car or older for a lot less money and have more options on it???

Now sure some people will come back and say well its guaranteed with constructors warranty, but even if the engine fails costing 8000 pounds its still better than 100 percent losing 15 or 20 K over the 3 years?


Discuss.???

[volvo145]

Most of the people that I know with new cars just have an agreement.They just lease it or have similar type of thing for a set period and then return them for another one .Some people just buy it at the end of the term.But it is often cheaper to lease than buy now if you work out the figures.
Personally I would rather have my own vehicle paid for regardless of age but it all depends on peoples individual circumstances.
When you run a business now that is a different ball game.

[Considered1]

I've always leased (contract hire) for that reason

If you looked at What car depreciation guide on their website the time to buy would possibly closer to 3 years old when it has lost as you say around 50% or more.

What I found with Volvo (first time for me) this time is the finance on used is 10.9% but less than half that on new, plus with a very large discount (first years depreciation?) and a car Im happy to keep for a very long time (5K worth of options added nothing to the GFV!) was a new car for close to the monthly cost of a second hand one or a contract hire. Better mpg and I get to keep the car after I've paid for all the options on it rather than hand it back.

[andymcp]

Put simply, because the near-new cars save me a little on sticker price, but miss options I want and will cost me a few thousand more over the life of my ownership compared to the brand new cost I have signed up for.

Second hand (even ex-demo) just made no sense at all.

[cheshired5]

I used to get the wife brand new Clio's £149 deposit then £149 a month.
So no capital outlay for a brand new, nice spec, warranted car for the daily cost of a Big Mac Meal.
Didn't pay for servicing as they were two year intervals and we changed after two years.
I did this with 3 Clio's and it suited us perfectly at the time.
When people use reliability as a reason, I don't agree. For the 3,4or £500 pounds a month they shell out, I could guarantee the reliability of my 12 year old S60 many times over.
I sold new and used cars for 6 years and the reasons for other people's decisions are endless. It could be anything from vanity, spite, tradition, love, guilt, impulse, even grief.
It was mostly vanity though

[675rrr]

Good debate this.

So 149 pounds a month for 24 months afterwards you have nothing?

[cheshired5]

Originally Posted by 675rrr

So 149 pounds a month for 24 months afterwards you have nothing?

Not nothing. I had a happy wife, which was worth a lot back then

[volvo145]

Originally Posted by 675rrr

Good debate this.

So 149 pounds a month for 24 months afterwards you have nothing?

True you might have nothing at the end but you would have had less than nothing if you were buying most of the time.
It might have cost you £5976 but how much would you have lost on depreciation?

[Harvey1512]

Originally I bought second hand, minimum 3yrs old, as I could not afford new. I have leased a company car for the last 10yrs or so. I do understand why people buy new. It is a lovely treat for one thing, it is also the car exactly as you want it. Perhaps it is more phsycological than rational but we spend a lot of time in cars and the luxury of having one that no one else has been in is a nice one.

[andymcp]

If it is of any interest, my calculations went like this:

What I wanted - V60 D4 VEA (for the low tax and running costs). I get an allowance every month from work for a car, but it comes with certain conditions. So no running out to buy an F-type, for example. But mostly, the car is a tool and apart from lugging loads on the occasional family holiday, it's used to get me from A to B over 20-25,000 miles a year for work. Ultimately, I expect to pay for a car and then hopefully roughly break even on the running costs for a few years.

When I settled on a Volvo, I took a look at near-new ones on the market. I might want the D4, but if an ex-demo D5 could work then why not? The one I settled on using as a comparison was a 63 plate D5 SE Lux Auto, sticker £28k. The total invoice value for my own order is just over £32k. From what I could gather at the time, the D5 should be good for about 40mpg average without too much effort, the D4 for about 50.

So price comparisons:
New D4 SE Lux Auto, all my preferred option packs, plus the accessories I need (towbar, spare, roof bars, guard, mats etc plus servicing pack) - £32k.

Used D5 SE Lux Auto, £28k. Add £1400 for the accessories I want. Nothing I can do about the 3 options I'd have chosen but can't add as they're factory fit. Servicing I don't know what normal prices are but I assumed 5 @ £250? Plus £600 more on road tax. Fuel difference over my mileage works out at £3,200. Total cost now £32,800.

I realise there are deals to be done on sticker price, I realise I could have bought older and reduced the second hand price. But equally I had a £26k starting price for the new car, the only reason it ended at £32 was because I decided that given all the hours I spend driving I wanted the nice-to-haves. With the current discounts and savings on running costs, fuel, servicing etc on offer, it really was a no brainer.

Equally, compared to any finance offer (apart from 0% over 2 years), there was no benefit in leasing....

So maybe I've been duped, but I'm happy with my choice to be a cash buyer of a brand new car spec'd how I want it and counting down the weeks to delivery.