A thought struck me last night in my search for a new car... is it really so bad to buy new anymore (in terms of losing so much in depreciation I mean)?
For my example, take the Ford Focus 1.6 TDCI Studio. A quick look on parkers tells us that the price for a 1 year old (10,000 mile) version of the above from a franchised dealer is £9,265 (based on the MRRP of £13,327 = depreciation of about 30%) so a loss of £4062 to anyone who brought one....
However with websites like Drive The Deal, no one pays the MRRP, and in reality I could pick one up tomorrow for £10,828. So if I assume (possible egg on face time) that a year ago they were the same price then that would mean a buyer would only have lost £1563 on a years new motoring plus not taking a gamble that a year old car has an unknown history...
So I can understand people saying "don't touch new cars, they depreciate too much, get one a year or two old" if they thought you could lose £4k+ on a £14k car... but the above suggests it would be nothing like that amount..
Anyone got any thoughts?
M
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So I can understand people saying "don't touch new cars, they depreciate too much, get one a year or two old"
If everyone waits for 1-2 yr old cars, then auto industry will have to close down the shutter :)
If you can afford the car you want as new, simply buy it. Don't worry too much about depreciation. At least 3 yrs you'll have no worries.
However, buying 1-yr old isn't that bad either - provided the car has not been misued. You'd still have remaining 2-yr warranty.
Some cars depreciate so slowly (eg. Honda Jazz), you'd rather buy new than a year old.
Unlike a house, buying any car is a losing game ;)
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I've been wondering the same, Morpheus. As with so many things, I suspect the answer is, "It depends.."!
Similar example: the Mazda 5 comments here have got me wondering about. List price is about £17,000 but DtD gave me an online quotation of more like £14,500. Equivalent models, found by the Autotrader and Used Mazda tools, from early 2006 and with 10-20,000 miles, are being advertised for £12-13,000. Even assuming the used prices could be haggled down a bit, the difference is still about what I might expect the car to lose in value in its fourth year, not its first. So for not much more money, I could have a new one, in the right shade of blue, be sure no-one had put BP Ultimate Unleaded in it by mistake, and make it that bit longer till I'd have a five-year-old car again.
What are we missing?
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Your prices are out. To SELL your Ford focus is -
Part-exchange Price: £7470
Private sale - about £8,500
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TourVanMan TM < Ex RF >
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Your prices are out. To SELL your Ford focus is - Part-exchange Price: £7470 Private sale - about £8 500
@ GMAC and TVM,
I never mentioned SELLING / Trading in....
I said BUYING, as in do I buy brand new or do I buy a year old...
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In the above example then you get new for 10.8 or 12 months old for 9.2 the year old car looks overpriced.
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In the above example then you get new for 10.8 or 12 months old for 9.2 the year old car looks overpriced.
Fair point.
Even the private sale price of £8.5k versus £10.8k new is only 2k difference. Plus as others have said, you get a brand new car, the benefit of the extra years warranty, you know exactly what the car has had done / happen to it and 10k less miles on the clock...
M
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While the above is true and the twelve month old car in this example looks expensive there are so many unknowns about this discussion.
The used car may be from a small county dealership who has had this customer for thirty years.
He/She buys a new car every twelve months list price and the dealer always gives top book for the trade-in because he knows the car has only done 6k miles, been in a heated garage every night, gets washed, waxed and hoovered every weekend and any minor scratches or dings, the dealer gets the business of sorting out.
If two customers appear at this dealership with a problem, one having bought this twelve month example sold and maintained by the dealership from new and the other customer with their bought-it-off-the-internet-cheap.com invoice and the dealer only has one courtesy car left and one bay free in the workshop, who is going to get the better service ?
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If two customers appear at this dealership with a problem one having bought this twelve month example sold and maintained by the dealership from new and the other customer with their bought-it-off-the-internet-cheap.com invoice and the dealer only has one courtesy car left and one bay free in the workshop who is going to get the better service ?
the service manager will most likely not be bothered where the cars came from. He'll only be interested in which helps him meet his targets.
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Sorry me old fruit. If you never sell you never have depreciation. It simply dont exist.
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TourVanMan TM < Ex RF >
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Sorry me old fruit. If you never sell you never have depreciation. It simply dont exist.
Except when Johnny Boy Racer smashes into your car and insurance tell you it was only worth £500.
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Except when Johnny Boy Racer smashes into your car and insurance tell you it was only worth £500.
Yes and that!
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TourVanMan TM < Ex RF >
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For my example take the Ford Focus 1.6 TDCI Studio. A quick look on parkers tells us that the price for a 1 year old (10 000 mile) version of the above from a franchised dealer is £9 265 (based on the MRRP of £13 327 = depreciation of about 30%) so a loss of £4062 to anyone who brought one....
The £9,265 you quote is the main dealers sticker price.
You'd probably be offered in the region of £1.5k less depending on what you were trading in to buy.
When buying new you will always lose 20% immediately - that's the VAT and other OTR costs which you don't pay for a used car.
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When buying new you will always lose 20% immediately - that's the VAT and other OTR costs which you don't pay for a used car.
Yes but somebody had to pay that cost on the used one when it was new. Nobody would willingly buy a new car with VAT on and sell it on immediately without VAT.
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Unless it's a much saught after model, you'd struggle to get your money back as a private seller.
Manufacturers do pre-register vehicles to keep the figures up but you go into a mainstream manufacturers showroom and ask for a pre-reg. deal and I think you'll get quite a pleasant surprise at the savings which can be had.
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Dont forget the dealers margin on the used car which counts as depriciation straightaway.Probably between 1.5k-2.5k.
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This is highly dependant on what you are buying. If its a Fiat or a Renault etc, its probably painfull to buy new in terms of initial depreciation. However I set out to by a nearly new Audi, and found that I was only saving about a grand from buying the exact model I wanted new. So why buy a car with 8000 miles on it by numerous drivers.
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However I set out to by a nearly new Audi and found that I was only saving about a grand from buying the exact model I wanted new. So why buy a car with 8000 miles on it by numerous drivers.
Again this looks like a case of an overpriced secondhand model you'd be mad to buy, if you don't know the history, as opposed to buying brand new to your exact specification.
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