MegaSack DRAW - This year's winner is user - rgwb
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Presumably between the sell it a week after you bought it and drive it in to the ground there is a sweet spot where a car will garner it's best s/h value compared to use?
when you die
When you're happy with the hit you're going to take for swapping it.
I've known people get rid every 3 years after the first MOT. I'm in a similar boat- we've got an 11 plate Cee'd and will probably demote it to a 2nd car (after offloading the missus's Fiesta on to my brother) in a couple of years and run it into the ground.
Cheers,
Jamie
I've got an 8 year old car I bought new.
I'll probably run it into the ground tbh, to spread the capital cost over the most years - it's reached the point where it's sort of bottomed out value wise as long as it still works so there's no real incentive to get rid.
OH works in car industry and has had company cars all her life. They keep them till they have 7000 miles on them and then they get sold to dealers. As she has a field job, that means we get a new company car every 3 months.
WOW @ 'Flaps!
Cheers,
Jamie
in my experience in selling and buying cars, normally found the 2 year mark is the best time. most motor manufactures if not all will work their deals out to coincide with a car coming to its 2nd birthday, because this is not only the best age for used car stock but it also keeps you in the brand which is their no 1 priority.
12 months is normally the worst as many rental companies flood the market after 12 months and trading a car in after the three year mark isnt the best as the dealer cant claim for preperation costs under the car warranty
i find the 3 year mark is great for buying - folks want no mots and they think that means no hassle.
the price i pay compared to new for 3yo cars means it cant be any where near the best time to sell.
@footflaps - the rationale in a business is different to private, its about how much you can depretiate the vehicle for tax purposes vs purchase/sale price and also what VAT you can potentially recover.
OP I think between 2 and 4 yeas depending on how much you like having a new car (ie more frequent if you like shiny and new and are prepared to pay a bit for it). Personally I am in the keep it for ages camp, we've bought demonstrators and kept them 7-10 years. we bought two new cars in 2007 and still have them both. I think cars are much better built and more reliable than they ever were, we have an Audi A6 with 100,000 on it and it's almost like new. If you are focused on minimal depretiation you buy the 2-4 yr old car
Not really, it will lose most %age-wise in the first 3 years, after that it's a steadier decline (although the make/model is a big factor as well). So usually the most economic way is to run it into the ground over 15+ years...
depreciation is of course the biggest cost of ownership in the first few years, but maintenance starts to become a bigger factor as the car gets older so it's not simply a matter of buy new and run into ground for best financial management
we take the view that the main family car has to be reliable and therefore buy new and change every three to four years whilst accepting that this is expensive
the second car (mine!) is now thirteen years old, cost a couple of grand a year or so ago, and whilst it has low depreciation there is always the risk that maintenance costs will mean it has to be written off at any point in time
@footflaps - the rationale in a business is different to private, its about how much you can depretiate the vehicle for tax purposes vs purchase/sale price and also what VAT you can potentially recover.
When she was at Skoda, the car was completely tax free as well. They ran a scheme which meant they loaned you the money to buy the car and as the company could sell the car, with 7000 miles on it, for the same as the build cost, the cost to the company was 0, so the tax on the car was 0. You just paid tax on the interest of the loan, which was pennies...
I've got an 8 year old car I bought new.
In a similar position, ours is now 7.5 yrs old. Still only done 38,000 and works well enough. I can see us keeping it until it stops being reliable. And when I do change it, I am going to change it for [url= http://budnitzbicycles.com/ ]one of these... [/url]
Run it into the ground. You could get 20 years out of it. Even when it's really old the price of even a big repair is far less than a new car.
Depreceation per year gets less and less, but you still have the use of it, so you're getting a year's car use for less and less outlay. If you consider a car as a cash purchase, and don't try and offset it against its resale value, then the longer you keep it the less it costs per year of course.
£20k car = £10k car after three years, so that's £3,333 per year.
£20k car = £0k car after 20 years, so that's £1k per year. As long as you don't end up spending £2k per year on repairs every year of its life, you'll be ahead!
We bought a 12 month old primera with 18 thousand miles on it. We've had it thirteen years this year and its still only done 74,000. Been a cracking car and will keep it till it dies.
Yes, once it's become a classic and starts to appreciate in value.
Oh and you need to have done no miles in it and have kept it in a heated, dehumidified garage.
When you want to change the car?
If you want maximum value from your car then you are talking 10+ years. Most modern cars are so reliable that the maintenance costs mentioned above don't really kick in till 8 years or more depending on the car, and even then it's much less than depreciation of a new car. Plus everyone has to have their cut when you buy a new car.
Keep it until it gains classic status, you'll be quids in.
Until it hits the scrapyard: when the cost of repair for a few months becomes more than the cost of depreciation and repair on a new car.
Presumably between the sell it a week after you bought it and drive it in to the ground there is a sweet spot where a car will garner it's best s/h value compared to use?
No. The sweet spot isn't between those two extremes.
in my experience in selling and buying cars, normally found the 2 year mark is the best time.
Madness. In your experience of buying and selling cars, what's the difference between the price you'll sell a 3yo car and the price you'l sell a 2yo car? How does that compare to the difference in price of a 4yo compared to a 3yo? 5yo compared to a 4yo? etc.
Feel free to carry on selling them at 2yo though - means more availability for those of us who like to buy them at that age.
When it's scrapped.
Untill it reaches a point where a replacement costs more than the repairs you haven't reached the 'sweet spot'. Obviously if you compare it to a new car price you may well never reach that, assuming you can get parts even an entire engine rebuild is unlikely to outstrip the new cost of a car. Car's get scrapped because the repair costs more than the car's worth, but you could still repair it for a lot less than a new one.
Once your cost per mile exceeds what it would be for the car you would consider replacing it with. Your cost per mile on a car bought from new will be a sort of U shaped curve if you look at the depreciation in "real" terms (i.e. the actual drop in realisable value), with it starting to go up again as maintenance bills start to get heavier on an older vehicle (and also likely fuel economy deterioration on an older engine).
Where that climbing curve intersects the cost per mile curve of a new(er) replacement depends on so many factors that it will be different for different people and vehicles, depending on mileage, how you're financing the replacement, what sort of driving you do....