Has anybody got any facts and info on the most cost effective period to keep a new vehicle before replacing it?
Do you keep it 3years, 5 years or just run it into the ground?
Any useful advice would be appreciated.
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depends how reliable you need it to be, whether it needs to be "respectable" for your business contacts etc
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Paul,
Depreciation on a new car is your major cost in the early years, but that is only a notional or theoretical cost until you come to sell the car. So keeping it a bit longer probably makes more economic sense, and I think that car purchase is best viewed strategically - the long term costs, benefits etc.
Owning a car is always an expensive business, but with modern cars being generally better built and more reliable I don't think there is the need to change a new car after 2 or 3 years like there was a few years ago.
Good luck
Pat
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Interesting question Paul, but impossible to answer precisely as the costs of running an individual vehicle contain too many random factors.
As an accountant who sees the records of what people actually spend on their vehicles, if I had to generalise I would say for vehicles up to nearly 10 years old, the longer you keep a car the lower the overall motor expenses.
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.......keep it for a year and sell it for almost what you paid for it. That way, you'll sufer virtually zero depreciation.
Don't let anyone tell you it cannot be done because it can. You just have to observe and stick to some golden rules.
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I feel another advert coming on...
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For a good time, phone 01234 -567 8910
ask for Doris
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My own recipe:
1) buy used - at 3 to 5 yrs old most cars are worth less than a third of their new price
2) buy privately - directly from the first owner / user. This way you can quiz them and get a feel for how well (or not) the car has been cared for.
3) Make sure the car is pristine. Only accept very minor or easily-fixable faults. Have the car inspected if you don't feel confident yourself.
4) Spotless service record - backed up with RECIEPTS or else a dealer who has the car on their records (and is willing to let you see them).
5) ALL the paperwork in order. Especially records that prove legal title.
6) Check for recalls on that model - have the mods been carried out?
7) If the car has less than 10 mths MoT ask the owner to get it re MoTed at a garage of your choice. If the MoT is new, check out the garage to see if they appear sound.
Once you've got the car:
Drive it around for a couple of months without doing anything to it to make sure you are totally happy with it.
No matter what the service history says have a FULL service carried out.
Keep the car for at least five years. Follow the service cycle from fresh after that full service you've just had done.
Really look after the car well - not just the service items, but everything else too. A 10 to 12 year old car in excellent order with only 2 owners and a spotless service record will be snapped up by someone looking for cheap reliable transport.
Drive moderately most of the time - driving hard all the time really cuts down a cars useful life as well as costing more in fuel, tyres, brake pads etc etc.
Following this recipe you can cut depreciation costs to just a few hundred pounds per year whilst being able to drive a really nice motor. Costs can be further cut by insuring TPFT as the car ages and becomes worth less. Consider doing some of the servicing yourself, this saves a packet, but make sure you get receipts for all items and keep a detailed logbook of what you do (many FE colleges run vehicle maintenance courses, if you feel inclined).
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Cyclone,
Excellent advice! I've tried to do the same myself over the years and it does work. Most recent purchase, 18 months ago, was a new car for the first time. I intend to keep it for about 10 years, and when it's abouit 4-5 years old it will become the second car to replace my wife's 11 year-old Merc. That way it's like a used car but I know the history!
Thinking long term is the key.
Pat
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Paul, the value of any car used, and the cost of new in the future depends on the market at the time and the economy. You as an individual with one car have a virtually impossible task of guessing what special offers and deals will be available on new cars, and what Joe public will pay for your used car in 1, 2, 3, 5 etc. years down the line. The futures market is one of the most risky in the business! Best advice would be to look at what lease company and fleet buyers are doing with a view to residuals, but they can and do get it wrong. also, as others have said, I suspect the longer you keep the car, the better value you will get from it whilst it maintains reliability.
All the best,
Mike
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Fleet practice used to be to keep hold for 3yrs/60000 miles. The drop in the used-car market in recent years has forced some change in that policy such that 24 month cycles are becoming likely for companies who buy their own fleets.
The reasoning behind this is, I think, due to the fact that auctions to franchised dealers only are a sure way of disposing of particular marques, and franchised dealers don't want cars that are beyond 40-50000 miles. Here the concerns have been two-fold, reclaiming cash in the car and ease of disposal.
This is what I've been reading in Fleet News. Although I know it makes sense to keep hold of a car for as long as possible, there may come key areas where there is a step-down in value.
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Ian
Thank you VERY much for all the business from your friends - that Chris is especially nice
Love
Doris XX
PS I'm feeling a bit s*****d out at present, so please can we delay your usual
lunchtime visit on Monday?
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