Car prices plummeting - Colin M
This months CAP guide warns about pressure on nearly new car prices because of the levels of discount on new cars commonly available. I see the BBC are carrying a story about this too.

news.bbc.co.uk/1/hi/business/3107957.stm

Car prices plummeting - LongDriver {P}
Good Good!

The more nearly-new car I get for my £20k the better...in 3 years and 120k miles time it will be worthless anyway, no matter what happens to used car prices!
Car prices plummeting - Hugo {P}
This is why I cannot see the point of splashing out for a new or nearly new car.

I can get a lot of 6 yr old car for just over £1K.

I am just putting a 16v 1.8l P reg Xantia back on the road, and look to keep the expense inside £800. I was given the car - replacement engine and MOT etc reqd

OK, so it depends on what you want, but my view and concernes say - why go out and spend 20K of your own money on a brand new or nearly new motor when any of the following can happen?

It could develop a major mechanical fault and the manufacturer starts weasling out of the warranty

Some plonker could put tramlines down the side of it while messing about, and not leave a note (£1K and loss of NCD)

It is liable to attract the attention of car thieves

Bsically, it's like carrying £20K in notes with a big banner on your top saying, I've got 20K cash on me.

You never know who you're likely to meet......

For example, about a year ago, my L reg Xantia developed a small graze around the NSF, "Oh what the hell" was my view. Although I like the car to be presentable, that really did not bother me that much. OK I would have pressed for insurance details if I caught whoever did it.

Having said that, we cheapskates need other people to buy new cars so that we can pick them up cheap when they're a few years old, so it remains to be said that there is a good case for buying new - as long as someone else is buying them new!!

:)


****Signature? - Ideas on a postcard please anyone!****

Hugo
Car prices plummeting - LongDriver {P}
In answer to your points above:

It's not my money (technically), as although I have to fork out the £20k to start with, it will be paid for 100% by car allowance (from my employer), mileage allowance (from my employer) and a £5000 per year tax rebate from the Inland Revenue, so it won't cost me anything in the long run.

My employer does not allow me to go on the car allowance if I run a car that is more than 4 years old. I'm going to keep one for 3 years so a 1 year old car is the oldest I can go for.

I could get a cheaper car and make a good profit, but I'd prefer the luxury and comfort of a more expensive motor for the many hours a week which I spend in the car.
Car prices plummeting - Greg Parker
Hugo: good points. Why private buyers shell out so much for a car is pointless. But it is because people are led to believe that new cars equals reliability.

It is basically knowledge. People lack knowledge and are taken in by advertising. For example, I just test drove the C5 diesel at £10,000. Nice enough car, but then I can buy a sound toyota carina e 2.0 executive (e/w, aircon, abs etc.) with 40,000 miles at £2000 (that is N reg). It has about 40,000 miles of life left in the engine, oil has a castor colour, quite economical (30 mpg versus the C5's 35mpg). The carina may not look as good, but then you don't have to look at it and you usually sit in the car. Also, the C5 is more difficult to work on, the carina is easier to work on and means cheap DIY maintainance.

Similar cars, with an £8,000 difference. And the less depreciation means I always go second hand with my own money.

However, the fact private buyers go for new or nearly new cars explains why so my in Britain are in debt.
Car prices plummeting - Baskerville
Hugo: good points. Why private buyers shell out so much for
a car is pointless. But it is because people are led
to believe that new cars equals reliability.


Greg I think this is a little simplistic. Some people do buy new cars for the apparently greater reliability, but beyond the "new car smell" and latest gadgets it's more the warranty they are after I reckon. Who knows what major faults your sound Toyota Carina will develop, which you will have to pay for, because of the way it was driven in its 40,000 miles before you had it--that's potentially a lot of whacked kerbs, crunched gears, low oil warning lights and cold starts, isn't it? And that leads me to the other reason why people do it: at the end of three years you have a second hand car in a colour you like with a history that is absolutely guaranteed. That is worth money I think.
Car prices plummeting - Dan J
Conversations of this nature often make me chuckle. It's an "each to their own" environment. I personally have a car bought as nearly new in 2000 and when it goes in a few months I'll be replacing with a banger for financial reasons (more drinking money available).

However - you can question why people spend all this money on cars when they could motor for pennies but the system is circular. You can only motor for pennies because of all those souls who, whether you think it is sensible or not, will buy brand new cars. The country, in fact world, is awash with motor vehicles at the moment rendering anything old virtually worthless.

Imagine a situation where people stopped buying new cars and it was only the leasers and hirers and big companies buying. Your used car would quadruple in value and motoring would become somewhat a more expensive pasttime!!
Car prices plummeting - Hugo {P}
Yes Dan

Each to their own.

When I considered buying a new car (Rover 75) with the 30% discout afforded by working for my last employer, I was tempted until we clapped eyes on the rear legroom (I am quite tall and my daughters are both tall for their ages)

For image and other reasons people do need new or nearly new cars. If I were working as a financial consultant visiting clients, or a sales rep and visiting businesses, my Xantia would not be suitable, as it is too old perhaps. Hardly the marque of a successful company/salesman.

However, in the job I've recently left, I did not need my own car for business and felt assured of my abilities to select a good value for money car, which I am very pleased with.

Given the choice of a brand new car or a 10year old one I would go for the brand new one if I didn't have to pay for it. However, as I am spending the money on property renovation and I run a second vehicle as well, I have got what I need, not what I want. Maybe there lies the answer.
****Signature? - Ideas on a postcard please anyone!****

****We never stop learning****

Hugo
Car prices plummeting - Maz
40,000 miles at £2000 (that is N reg). It has about
40,000 miles of life left in the engine.

I agree your point, but I reckon you can multiply that by 5 for a properly maintained Carina.



Car prices plummeting - neil
Greg... good news! My Carina II 2.0 has now done 152,000 miles and still drives like new, uses no oil, doesn't discolour oil in 5000 miles between changes... so you might get a bit more than your 40k 'left in it'!

Neil
Car prices plummeting - bartycrouch
It's not just the discounting of new cars that are tempting car buyers. Low interest rates and finance deals such as PCP mean that low monthly payments and low deposits are making new cars look more "affordable". Many of these are returned to the dealers after the contract period is up and they must have an affect on the market.
Car prices plummeting - Blue {P}
All those cars been dumped onto the second hand market are bound to have an effect, if you buy used then you dont get anything like the sae incentives from dealers.

I bought a brand new Fiesta for the free insurance deal, I'll probably be selling as soon as this deal is up (in 2 years), having taken a depreciation hit of less than £1000. The free insurance meant the car effectively only cost me £6,600 (list price £9,600), so how could I say no? But there's one more used car on the market that wouldnt be there if they hadnt have run the deal...

Of course if I'd not benefited so much from free insurance then the 2 year depreciation would probably be somewhere closer to £4000 :-( I honestly reckon that I'll *never* suffer so little depreciation on a brand new car again!

Blue
Car prices plummeting - Hugo {P}
That's true!

This is the other side of the coin. A friend of mine is looking to buy his son a Saxo when he passes his test.

Cost of new basic Saxo with a year's free insurance about £6K I think

Cost of 3rd party insurance on old fiesta for 17 yr old - £1200

Real cost of Saxo £4800 - probably what it'll be worth when its 12 months old.

Possible option - sell 12 month old Saxo in 12 months time to someone in their 30s who can get cheap insurance and buy new Saxo with free insurance.... and so on!

Well why not!
****Signature? - Ideas on a postcard please anyone!****

****We never stop learning****

Hugo
Car prices plummeting - DavidHM
He'd be lucky to get free insurance for a seventeen year old though - maybe at eighteen. And £4800 sounds a bit strong for a year old Saxo; don't forget that Kas are only £5.5k new, or even a couple of hundred less if you want an import.

Probably £4400 is more realistic. Still, insurance is likely to be in four figures for the first two years, so if the first one is kept for a year, insurance will cost more than depreciation plus maintenance on an older car, so it might be worth replacing with a brand new one with free insurance that is kept for a good few years, although a 19 year old with two years' no claims should be looking at half sensible premiums.
Car prices plummeting - hootie
As most of you know, I agonised over all these kind of quandries a couple of weeks ago - in the end it very much depends on what kind of cash you can spare.

Despite my feelings that it was crazy to buy a new car, I got a domestic over rule, and at the end of the day, I also agree with the reasons that brought it about, so we are buying new (without the free insurance, because it seemed that they only want to offer it to people who would have a very low premium anyway - depends on the make of car and how much they want to sell it to you)

At the end of the day, there're very few free lunches, but having decided on a Yaris and looked at the second hand prices, we figure we might aswell have the best out of the car (presuming it all lives up to reputation) and benefit either from a very long lasting car, or the high resale (compared to other cars that we were looking at)when we come to part with it.

If, however, our budget had been tightly fixed, then we'd have gone down another avenue altogether.
Car prices plummeting - Phoenicks
Rather than looking at the normal big name insurers for car insurance people should try specialists like allen & allen, Sterling, Bell direct etc. They literally are the ones out of the back of Max Power.

They will be the ones that can get insurance under £1000 for new drivers/17yrs etc.

Dont forget the saxo is on the way out and that will really affect used values. remember what happened to the AX when the saxo was launched?!
Car prices plummeting - Blue {P}
Well I think I almost got a free lunch with mine, £3000 worth of free insurance over 2 years, on a car that will probably depreciate by about £3,500 over that time, plus I haggled hard and got free metallic (there's another £300 saved!) and a fairly good trade in on my old car. :-)

Blue
Car prices plummeting - Phoenicks
But if you'd managed to get insurance seperately for £850 first year, £700 next it would have cost £2000 extra?

Who was quoting £1500 p/a and why so much?
Car prices plummeting - Blue {P}
I'm 19, with 0 NCB. I got quotes from the cheapest insurance company available, Liverpool Victoria (and believe me I tried *everyone* they were the cheapest by a long way) I quoted ahead at 20, and 21 with the appropriate NCB (thinking positively!) Anyway, the total bill came in for two years insurance on the car I had at the time (group 6 Fiesta Ghia) at arounf £2,800. Taking into account insurance premium increases and I thought my total insurance costs over the next 2 years could easily be £3000.

So by changing I got a brand new car, with warranty (mine was expired), saved a packet over insuring the Fiesta Ghia and restarted my depreciation cycle again, but this time from a much better position, so I will actually have lost very little, provided I keep the car for a full two years. Hopefully! Plus the new Fiesta is bigger and doesnt need cleaning as often cos it doesnt show the dirt. Bonus! It was a no brainer really when I worked it all out :-)


Blue
Car prices plummeting - Ben79
A Saxo will depreciate by over £2000 in a year. My Saxo Forte (2000 W) cost me £7,300 and I p/x'd it for £5,100 at nearly a year old.

Better news is that Citroen Insurance give you a bonus after 2 years when you renew and stay claim free with them.

Ben
On my 3rd Citroen. Saxo, Xsara, C5.
Car prices plummeting - bartycrouch
Cars generally depreciate the most in their first year. The Saxo Desire models seem a better bet as they were very cheap to start with. A young lad I know recently sold his Y reg Saxo for £4000 privately, but only paid £6100 new. Pretty good deal, I'd say.
Car prices plummeting - Railroad
There is no financial argument for buying a new car.

You buy a new car because you want one which is fair enough. I'm glad people do because it helps to reduce the price of second hand cars.

The value of new cars depreciates at an alarming rate. And they still need fuel, tax, insurance, maintenance, servicing, tyres, etc. And contrary to popular belief they still break down, and not everything is covered under warranty.

With all of this taken into account, it's much cheaper to own a good second hand car.
Car prices plummeting - Armitage Shanks{P}
Overall you are all correct but there are exceptions. Quentin Wilson recently did an item on the Ford Ka (would you want one?). He said that he buys them new at a car Supermarket and sells them on 6 months old with a £200 loss. This is cheap motoring re depreciation, it shouldn't need any consumeables and problems are covered by the warranty. But is is a Ka and he is in the trade!
Car prices plummeting - T Lucas
£200 loss,sounds like someone is being 'economic' with the truth.Makes a good story though.

 

Value my car