Thinking about a new car

cheechm

cheechm

cheechm

Associate
Joined
16 Jan 2008
Posts
2,350
Currently averaging about 12,000 miles a year of which about 11,000 are motorway miles. I'm doing all these miles in a Golf 1.4TSI. I manage about 43mpg usually which doesn't seem to bad. The official figure is 46mpg combined.

I'm now thinking of moving to a diesel to save a few quid. For ease of the calculations I'm looking at a Golf GTD. Here's my calculations:

Current Car (per year)

VED: £145
MOT: £30
Fuel (£1.30/litre): ~£1500
Insurance: Same for both

Total: £1675

New Car (per year)

VED: £20
MOT: £0 (will buy new and sell after 3 years)
Fuel: (£1.40/litre): ~£1100
Insurance: Same for both

Total: £1120

So there seems to be a saving by buying a diesel. I know I have neglected servicing, but I'd expect the servicing to be cheaper on a new car mainly because of warranty and age.

Also, in terms of depreciation, I bought my current car at £11k (2nd hand) and will hopefully sell for £8k. So essentially the car has cost me £4k in depreciation over 2 years. A new car obviously immediately loses 20% of its "value", but am I right in thinking diesels hold their value better than petrols? So if the new car is £26k, minus VAT it would be around £21.5k, I then after 3 years and 40,000 miles I'd be able to sell for around £18k?

(Both cars would be manual, just because I prefer it to DSG/auto.)

What other cars should I be test driving that are in the same category? I know the Audi A3 is built on the same platform as the Golf. Or should I not be looking at a diesel at all? Budget is around £27k.

Final question: would it be better to part-exchange the current car or try to sell it privately. Never sold a car privately and am always worried that the buyer could try to pin any future breakdowns on me, although as I understand it's essentially buyer beware, correct?

Cheers
 
Hi,

If the only reason to change is to save money, then surely the cheapest option is to do absolutely nothing at all and not spend £26k to save £555 a year.

If you want to change because you want a new car then fair enough.
 
There are some enormously flawed maths in this.

Lets first focus on the saving per year. £500. This is, in the context of buying brand new cars, absolutely nothing at all. It is trivial, a drop in the ocean. Therefore this seems to put into question the entire plan as a money saving activity. It doesn't save money, so if the object is to save money, the plan is a failure and you should stop thinking about it immediately.

The next issue is that 11-8 is 3 and not 4. So you exaggerated your depreciation by 33%.

Then your maths become based on the idea that you could sell a 3 year old 40,000 mile Golf for £18,000?

http://www.autotrader.co.uk/classif...e/up_to_50000_miles/make/volkswagen?logcode=p

Thats a 2.5 year old Golf GT TDI, advertised at £15k. It will sell for less.

Basically, buy a Golf if you want one but do so knowing it will significantly increase your motoring costs.
 
ADL said:
Hi,

If the only reason to change is to save money, then surely the cheapest option is to do absolutely nothing at all and not spend £26k to save £555 a year.

If you want to change because you want a new car then fair enough.
Click to expand...

Indeed, a pay back period of 46~ years.
 
Sorry, should have mentioned that the calculations are based on selling the car at the end of 3 years and not being worse off (essentially due to depreciation and running costs).

Put it this way:

Current car costs £1,675 per year, plus depreciation of probably around £5,000 over 3 years.

Therefore total spent over 3 years is £10,025.

New car costs £1120 per year, plus depreciation of probably around £6,000 over 3 years.

Therefore total spent over 3 years is £9,360.

So yes, I do want a new car and I just wanted to know whether my calculations actually made sense. My thinking is that after 3 years I will have technically spent less money.
 
You need to look at what other people have said. A 3 year old golf will have depreciated for much more than £6000, more likely to be around £12000. Add that into your calculations and you'll see that it makes little if any sense unless you just want a new car. Best option would be to buy nearly new with an approved warranty if you wanted a GTD specifically.
 
[TW]Fox;26253270 said:
This is just fantasy land I'm afraid. Try doubling that to be realistic.
Click to expand...

I assume you mean double the depreciation?

MORE SPEED said:
You need to look at what other people have said. A 3 year old golf will have depreciated for much more than £6000, more likely to be around £12000. Add that into your calculations and you'll see that it makes little if any sense unless you just want a new car. Best option would be to buy nearly new with an approved warranty if you wanted a GTD specifically.
Click to expand...

Indeed. Looks like a showroom model would immediately save 20% (VAT).
 
Look on Auto trader or the like for similar aged / mileage examples to see what they go for.

Here is a 3 year old example, with a few extras, at a dealer, for £16,500 http://www.autotrader.co.uk/classif...0_miles/make/volkswagen/radius/1500?logcode=p

So assuming you go for standard spec, you could probably knock upto £1k off that. Then that is the price from a dealer, so expect another £1k of that for a private sale I would imagine. Or another couple k for trade-in.

You will get your best return with a private sale, but it could be hassle, dealing with a seemingly endless run of Asians offering you peanuts and taking offence for rejecting them, then calling you back a couple days later with the exact same story, from a different number (my experience from selling the 335d). Sometimes it's easiest to just take the hit and trade it in. But be prepared to loose some coin in doing so. But yes, buyer beware is applicable here. Once you have sold it, it is no longer your responsibility.

You are saving £500 per year, going by your calculations. But remember, your depreciation will account for at least that going from your current car to a new one. You will be pretty much guaranteed to be saving money keeping your current car over switching. So you have to ask yourself if you want to pay for the new car, or save the money and keep with your current car.

Also, I am unsure how you have worked out fuel costs on your new car, but don't trust the VW figures. Not even remotely. You may well be close with your current petrol car, but my experience has put diesels, particularly VAG diesels figures as extremely optimistic. I suspect you would be lucky to see half that saving after a swap.

You could have course swap for a diesel of the same value as your current car. This would likely mean going for an older car than your current car, and so may encounter some issues in the next few years. Here is where a good warranty will help you, as it should fix your costs for the term. If going for a comprehensive, manufacturer backed warranty. But this may or may not actually save you any money at all. Better the devil you know really here.

TDLR.

Only swap if you want to pay more.
Cheapest motoring is either run your current car, or swap it for a diesel of the same value.
 
[TW]Fox;26253270 said:
This is just fantasy land I'm afraid. Try doubling that to be realistic.



No, you will have spent hugely more money.
Click to expand...

Fox is correct here.

PCP deals often half the cars value over a typical 3 year / 30k term. So expect the cars value to have halved. So for your £26k motor, expect depreciation of around £13k.

Whereas, your current car (which you value at £8k), may also half in value over the next 3 years. But that will only be £4k. So there is a £9k difference in depreciation over the next 3 years.

That said, drive the deal get you almost £3k off the price of a standard GTD, so you can maybe bring that difference down to £6k. Still a long way off the £1.5k fuel saving your (possibly) making though.

You should really be factoring that into the equation.
 
Last edited:
[TW]Fox;26253254 said:
It's only 46 years if you've absolutely no idea how to do investment appraisal :p
Click to expand...

Potato.

It was just for a bit of context of £555 per year compared to £28k.
 
Cheers for the input guys. Good to know that my maths doesn't quite add up.

I basically have to decide when to get rid of my current car as more and more starts to go wrong, and it continues depreciating.

When there's a few more GTDs on the market I'll probably end up buying a used one that's got less than 5,000 miles. All the ones at the moment seem to be white, which I cannot stand.
 
cheechm said:
Cheers for the input guys. Good to know that my maths doesn't quite add up.

I basically have to decide when to get rid of my current car as more and more starts to go wrong, and it continues depreciating.

When there's a few more GTDs on the market I'll probably end up buying a used one that's got less than 5,000 miles. All the ones at the moment seem to be white, which I cannot stand.
Click to expand...

How old is your current golf?
 
Currently 4.5 years. So the depreciation percentage is reducing year on year. Luckily still running well, but at some point it will start costing more and more, but they then it's too late to sell.
 
It's a 4 year old car, why will it start costing more and more? Why not consider the Volkswagen warranty, it's only about 400 quid.
 
What's gone wrong with it so far, and how much have you spent in repairs? Pistonheads has a great garage section where you can input all of your costs - it gives a summary of how much you've spent, as well as some detail.

If you want a new car, fair enough - just be aware that it'll cost you more, not less than keeping your current car.

For 12k miles a year, do you really want diesel? I was in a similar position a few years ago and bought a diesel Focus rather than a petrol one as a) there was more choice and b) the diesel options were better-specced. The cost savings for me over 10k a year are minimal.

For that sort of mileage you're paying a premium for the diesel option with minimal benefits.

Given your listed requirements, if I was in your place I'd be looking for a nearly new GTI.

Edited to say: sell you current car privately, be honest with the buyer about it's history and any faults, write 'sold as seen' on the receipt and make sure you've got their cash in your bank account before handing over anything (go down to your local branch with them and watch them pay the cash in to your account).
 
Last edited:
[TW]Fox;26253378 said:
It's a 4 year old car, why will it start costing more and more? Why not consider the Volkswagen warranty, it's only about 400 quid.
Click to expand...

Or just buy something reliable and more economical with the money from the 1.4?

Guy wants to save money. Suggestion: **** £400 a year down the drain. :confused:
Are the VAG engines that unreliable?
 
You must log in or register to reply here.
Back
Top Bottom