The only certainty buying a (any) new car is that it depreciates like there is no tomorrow. The question is what price you put on motoring. Personally the cost to me provides reliable transport to a decent job, day to day motoring, holiday trips, including to France etc, averaging 20k miles a year.

Last car was a 2004 Octavia mk1, sold it at 10 years old with 196k miles for 1500 quid. If I keep my current Octavia for 10 years it will have 200k miles on clock, and assuming it is worth nothing at that point it will have cost me £1800 per year, obviously plus servicing & repairs which I budget pessimisticly at £500 per year, reality though is less.

To change it for new every 3 years would cost me at least £3000 per year.

depends if you've got the cash to buy outright,

you can get a new vrs tdi estate for £19720,

should be worth more than £10300 when 2 year old

Yes but also don't forget to add on the cost of the extras he's specced onto that £19720 for a like-for-like comparison. Also there is a modest loss of interest on the capital by handing over all the money upfront.

Base spec vrs's were available on the personal lease for around the £6k mark over 2 years, so even if you managed to get the car for £20k cash, you'd still be needing to get north of £14k come trade-in time two years down the line to be better off than if you'd taken the lease.

You just can't look at some calculator or restealer. You have to look up the market situation by yourself - I like the comment where someone asked if you could buy that car for said "value" having 10k on the clock? No, you can't - well in UK may by you could but I just looked up our local car selling site search (private and restealers selling) for automatic Octavia 3 2013 and up. Before you click on that link, think what could be the answer.

 

http://eng.auto24.ee/kasutatud/nimekiri.php?bn=2&a=100&aj=&c=octavia&f1=2013&i=2&ae=2&af=50&ag=0&ag=1&otsi=otsi

All those prices include VAT.

 

Yes, that is 3 cars at the moment. It was 11-12 cars a month ago and to be honest these prices were spot on from list price minus monthly payments (for those sold cars that is).

 

Oh and one more thing - when I was selling my Mazda 3 GT I was offered 3 000 EUR from restealer. I said I will not give it that cheap and sold privately for 5 500 EUR in one month - mind you, it was the worst time for selling (December to January).

I never understood why people talk about VAT when talking about car depreciation. Sure, VAT isn't paid on 2nd hand items but it doesn't follow that a 2nd hand item is automatically 20% less than a new one for this reason.

I agree....to all intent and purpose we when personally purchasing a new vehicle in the UK have to pay 20% VAT so in my opinion that forms part of the vehicle price and this would be accounted for to some degree in resale cost.

I did think that car dealers had to factor VAT into used sales too so with say a 20k used car, 4k of that is still VAT and would make the dealership 16k or is that not correct?

My situation....having discussed the potential purchase of a new Golf GTD with circa. £1.5k of options using the O3 as a part ex....goes to show what bad news it is. There is over £5k of shortfall after year 1....to change the car (and assuming I didnt want to cash finance the buyout) id be looking to borrow from VWFS 34k to purchase a circa. 28k car....total payable about 40k and monthly payments over a 4 year-ish term working towards £600/month or nearly twice what the O3 is costing me now.....its definitely far from twice the car. There is also an assumption that VWFS would stump up the money for the deal....I dont think they'd approve it personally.

No one in their right mind would go for that, so looks like i'll be running the thing to much nearer the end of its term.

Edited 24 April, 201511 yr by pipsyp

I agree....to all intent and purpose we when personally purchasing a new vehicle in the UK have to pay 20% VAT so in my opinion that forms part of the vehicle price and this would be accounted for to some degree in resale cost.

I did think that car dealers had to factor VAT into used sales too so with say a 20k used car, 4k of that is still VAT and would make the dealership 16k or is that not correct?

My situation....having discussed the potential purchase of a new Golf GTD with circa. £1.5k of options using the O3 as a part ex....goes to show what bad news it is. There is over £5k of shortfall after year 1....to change the car (and assuming I didnt want to cash finance the buyout) id be looking to borrow from VWFS 34k to purchase a circa. 28k car....total payable about 40k and monthly payments over a 4 year-ish term working towards £600/month or nearly twice what the O3 is costing me now.....its definitely far from twice the car. There is also an assumption that VWFS would stump up the money for the deal....I dont think they'd approve it personally.

No one in their right mind would go for that, so looks like i'll be running the thing to much nearer the end of its term.

With second hand cars most traders tend to use the VAT margin scheme, so the 20% is only chargeable on the difference between what the trader sells the car for and what they originally paid for it (essentially their profit).Obviously brand new cars are not eligible for this way of processing VAT, hence the claims of cars losing 20% of value when driven off the forecourt are not correct.

With second hand cars most traders tend to use the VAT margin scheme, so the 20% is only chargeable on the difference between what the trader sells the car for and what they originally paid for it (essentially their profit).Obviously brand new cars are not eligible for this way of processing VAT, hence the claims of cars losing 20% of value when driven off the forecourt are not correct.

That makes sense czechers cheers.

I assume that you looked after you bought your Skoda...

No it was whilst I was employed :-)

Now back to a Motability deal instead for the Octavia :-(

I know its luck of the draw often but the financials on this car have left a bitter taste and I dont think ill be buying another.

I feel more sorry for those that have PCP'd v high spec Elegance/vRS or L&K cars as with no disrespect they will well and truely be having their pants pulled down at the minute.

Its rather a frightening prospect to think there are people out there who have likely paid late 20's for a car thats possibly done 10-12k year one.....that would really upset me unless I was planning to keep the thing more or less forever.

Its not really luck of the draw its more a case of finding out that maybe PCP isnt the most efficient way to fund a car if you plan to change every 12  to 18 mths. 

 

This factoring in the VAT is pointless as well , all cars whatever their value have an element of that value as vat , unless they are VAT exempt or that the vat has been claimed back , why people are subtraction that as a 20% loss in the first 12 months is beyond me

 

All vehicles lose the greatest percentage of their value in the first 12 months , the longer you keep them the lower the depreciation. In this country we are obsessed with changing our cars at least every 3 years if not sooner in many cases , the rest of the world doesn't and they don't have the depreciation we do (Quelle Surprise!!).

 

Having the used market flooded with low mileage 2-3 year old cars is great for pushing the price down, could be worse , could be a Vauxhall

I've never understood why folk spend thousands on changing cars frequently. Buy a good car, look after it, keep it a decade. I'm only now looking to replace my 11yr old Fabia VRS.

Since my father was a tight-arsed Scots Presbyterian farmer with family roots in Cavan, i.e. more than a trifle prudent.

However he was in the habit of buying a car brand new, with absolutly no brand loyalty, and then running them into the ground over 10 or 12 years, or 200,000 miles or thereabouts.

I now do the same, and wor 23 year old Son has just bought his first new car, and its intended to be  a "keeper".

I just got the Octavia nicely run in at 4.5 years/75,000 miles.

m

I've never understood why folk spend thousands on changing cars frequently. Buy a good car, look after it, keep it a decade. I'm only now looking to replace my 11yr old Fabia VRS.

Have to admit I do exactly the same, I buy new, for cash and grind the best deal I can. I generally get the top of the range and spec it to the hilt, then it is a car I'll want to keep.

They may not be cutting edge in 10 years but if you spec them up a bit they still hold their own. Daily driver hitting 10 now, still going strong, voice activated Bluetooth, heated electric leather, nav, xenons air etc, etc, it's only a Focus but I'm still happy with the job it does today. Put a bit away each month for the next cash deal.

It does not suit everyone, but it is not a bad way of doing things

I've never understood why folk spend thousands on changing cars frequently. Buy a good car, look after it, keep it a decade. I'm only now looking to replace my 11yr old Fabia VRS.

Because if you use your vehicle for work and personal you fairly plough through the miles before racking up a decade of ownership.

 

I looked at the 6yr life (with me) of my previous Scout (4,500 to 153,000 miles) Taking purchase price (a good deal on an ex-demo) less trade in and all servicing costs I'm not that much dearer rinsing two cars through a PCP in the same period (in both cases I start and finish with nothing after 6 years). I then factor in two brand new cars in that period, always under warranty, with free servicing and I came to the alarming realisation that, for me and my circumstances (we're all different!), that a brand new car funded this way was the best answer.

Its not really luck of the draw its more a case of finding out that maybe PCP isnt the most efficient way to fund a car if you plan to change every 12 to 18 mths.

This factoring in the VAT is pointless as well , all cars whatever their value have an element of that value as vat , unless they are VAT exempt or that the vat has been claimed back , why people are subtraction that as a 20% loss in the first 12 months is beyond me

All vehicles lose the greatest percentage of their value in the first 12 months , the longer you keep them the lower the depreciation. In this country we are obsessed with changing our cars at least every 3 years if not sooner in many cases , the rest of the world doesn't and they don't have the depreciation we do (Quelle Surprise!!).

Having the used market flooded with low mileage 2-3 year old cars is great for pushing the price down, could be worse , could be a Vauxhall

This isnt really true....what is true is that buying cars, particularly new ones is a bit of a mugs game and we all know it....but when you are a bit of a petrolhead...like cars alot and tire of them quite often then there is a tendancy not to do what is rational rather what makes you feel good.....buying a new car is one thing I tend to get quite a bit of satisfaction from so I tend to look into it good sense or not.

PCP's arent necessarily a bad way to finance a car but it is rather luck how well you do from vehicle to vehicle. My Fabia vRS estate....sold after 18 months with a modest return of equity.....Ocravia vRS estate (MK2)....only paid 20k for it and after a years motoring still got over 16k for it trade and got more back in equity than I paid in for deposit.....MK3 2.0 Elegance estate paid 23k.....just over 1 year its worth a best of £13.5k and I'm up to my nuts to the tune of about 5k. Is proving the polar opposite of the previous two but thats life....just glad I didnt pay cash for it frankly.

The Mk3 is so readily available on the used market now that you can barely give them away and those who bought them new early on and I guess even more so now are suffering the consequences. Really its a case of not having a magic ball and being able to foresee the situation until its unfolded.

PCH is a cheap way to fund a new car but if its going to do alot of miles and/or isnt going to be particularly well cared for you'll tend to suffer the consequnces there given there is less flexibility than there is with PCP.

To those who buy a car and keep it for years, I would suggest most are doing mainly private (and low) mileage in them and there are no caveats about how old the vehicle gets or its CO2 emissions....to qualify for my car allowance now my car has to always be less than 7 years old and currently emit 120g/km CO2 or less which rules out lots of cars.

I am really disappointed with the financial state of mine currently but accept thats life and part and parcel of buying new cars.

This isnt really true....what is true is that buying cars, particularly new ones is a bit of a mugs game and we all know it....but when you are a bit of a petrolhead...like cars alot and tire of them quite often then there is a tendancy not to do what is rational rather what makes you feel good.....buying a new car is one thing I tend to get quite a bit of satisfaction from so I tend to look into it good sense or not.

Yep that buzz of a new car (used or new) is why I have had 26 cars in 22 years of driving. Let's not go down the route of the thousands I've spent though....

I suspect the big issue on depreciation for Mk3 Octys is going to be the next government's attitude towards diesel. Whoever gets in, I'm pretty sure that at some stage they'll start making noises about diesel's impact on the environment.

They won't clobber diesels because it would have a devastating impact on both the new and used market (and the manufacturer lobby won't allow it). But I'd be amazed if they didn't look at car taxation generally and diesel in particular, as the evidence on particulates doesn't look good.

So if the likes of VAG don't unveil tech which tackles that, tax will go up. At which point residuals on diesels will be affected.

That's one of the reasons I bought a TSi.

Edited 25 April, 201511 yr by MorrisOx

I dont think diesel is a dying engine tech myself....its such a big part of logistical and heavy industry that they'll just have to make it cleaner.....

.....in fact they already have.

SCR emissions control will before too long be a manatory EU requirement on all new diesels....id wager come EU7 compliance time all diesel engines will have SCR. Large diesel powered ships and lorries have used SCR for many years but is only becomimg common on cars now really.

Said to reduce NOx and particle matter by around 90% used alone, but even higher amounts when used with a DPF.

Big drawback....yet more complexity to the already complex emission systems on modern diesel cars....also another cost in having to keep putting Adblue in.

Also if the diesel exhaust fluid levels drop too much if you dont top it up the car will effectively break down and leave you stranded or in limp home mode which is a nuisance....something some SCR equipped VAG group diesel owners have already complained of.

Edited 25 April, 201511 yr by pipsyp

I have owned two new cars that retained their value reasonably well. The first was a 1998 Japanese personal import Impreza STI IV which cost £18.5K all-in. I kept it for just over two years before letting it go for around £16K. The other car was a new Mini One (purchased for the wife). I think it cost about £14k, she kept it for 4 or 5 years and then sold it for £9k.

My biggest loser was a Renault Megane 1.6 Dynamique. It cost £15k new and after 3 years was let go for less than £5k. Losing nearly 70% of it's value within such a short time was pretty spectacular. I won't be buying another French car new.

New cars that retain their value tend to be niche, cult or cute. The Subaru Impreza had a cult following during the late Nineties / early Noughties, and STI IV's were the best of breed and rare, so it turned out a very solid investment. The Mini was highly desirable to young ladies and first time drivers. It was cute. The Renault was a plain, boring French car which everyone expects to fall apart after a few years.

My Skoda VRS sits somewhere in the middle. It is neither cult or cute, but may be slightly niche due to the lack of 2l Turbo, load-lugging, spacious alternatives. On the downside used VRS estates will be quite common in 2-3 years time, so resale will likely be much closer in percentage terms to my Renault than to my Subaru.

I personally buy new cars every 2-3 years because I work hard and like to treat myself. New to 3 year old cars are also safer than cars at 10-12 years, and with young kids safety is an important factor for me.

Let's face it, cars aren't cheap and that is how it is.

 

But new, change at 3.... Costly but with warranty there are no surprises and it is reliable

 

Buy and keep for a decade a bit cheaper but breakdown cover, repairs and frustrations increase

 

Bangernomics can be cheap motoring, but you need to be able to accept a breakdowns frustration and bill

 

I have heard that statistically the cheapest motoring is to buy nearly new, about 2 or so, and sell at 7 or 8 after about 6 years of reliable motoring but having avoided the initial depreciation.

 

The art, is working out what suits you best.

Ex colleague of mine with car allowance always used to buy something 3 years or so old for between 8 and 10k and run it as long as economically viable....he did quite well with it and had a couple of half interesting cars too.

The new age and CO2 rules though would have made it alot more challenging for him though.

If choosing a car was decided purely as a financial transaction we'd all be travelling by banger or by bicycle. Let's face it though, car buying is as much an emotional decision (for most people) as it is a financial one. We all have different needs, tastes and circumstances.

Why do some people go on 3 week cruises around the Caribbean when for others they'll just holiday in Skegness for a few days? Why do some buy their clothes from fancy boutiques when for others George at Asda will do just fine?

I have little time for folk who tell me I'm wasting money by buying a new car every few years. By all means point me in the direction of a good deal, but I don't need any lectures in basic economics. It's my money, I earned it and paid tax on it, and I'll spend it however I see fit.

Bingo. ^

I dont think diesel is a dying engine tech myself....its such a big part of logistical and heavy industry that they'll just have to make it cleaner.....

.....in fact they already have.

SCR emissions control will before too long be a manatory EU requirement on all new diesels....id wager come EU7 compliance time all diesel engines will have SCR. Large diesel powered ships and lorries have used SCR for many years but is only becomimg common on cars now really.

Said to reduce NOx and particle matter by around 90% used alone, but even higher amounts when used with a DPF.

Big drawback....yet more complexity to the already complex emission systems on modern diesel cars....also another cost in having to keep putting Adblue in.

Also if the diesel exhaust fluid levels drop too much if you dont top it up the car will effectively break down and leave you stranded or in limp home mode which is a nuisance....something some SCR equipped VAG group diesel owners have already complained of.

Like you say, diesel is too ingrained in the world around us to be wiped out by regulation, and I suspect the tech to make inroads on particulate emissions has been around a while. But the political noise around particulates has been getting louder and louder and I suspect politicians are going to conclude pretty quickly that CO2 alone is no longer an adequate basis for car tax.

I also think policymakers generally believe we should view motoring as more of a luxury than a necessity as roads become more crowded around cities in particular and the pressure to keep reducing the environmental impact increases. So once the fuss about cost of living does down expect motoring to get more expensive again.

And if car companies do introduce cleaner diesel tech you know who'll pay for it!

In the meantime, I'm making the most of my petrol power...

Toyota will not be selling diesel cars in the UK from September 2015, a petrol/hybrid only marque, the writting is on the wall so, enjoy your filthy oil burning smog bleching die-sels whilst you can.  LOL

I have heard that statistically the cheapest motoring is to buy nearly new, about 2 or so, and sell at 7 or 8 after about 6 years of reliable motoring but having avoided the initial depreciation.

The art, is working out what suits you best.

I bought my last 2 cars at 1yr old. The previous one I put 80k miles on, in just under 6 years and then chopped it in. The current one... well ask me again in 2019!

It works for me, but you have to pick from what's there so you don't always get the full choice of engine/trim combinations, let alone options.

I'm with the "it's my money I'll spend it on what I want" brigade, but I have to say that if I was picking a close to £30k car an Octy wouldn't be top of the list! I guess with PCP you're not actually paying that though, so I don't know what's best.