Buying brand new - Is it REALLY that bad?
- Thread starter paradigm
- Start date
Last 2 car's I've had have been brand new and so is my current car. If no one bought new car's then the market just wouldn't work as the manufacturers will only make a profit when selling the car new. One year's depreciation will kill any profit. If you're not a complete petrol head and all you want is your average saloon or hatchback and you can afford it via monthly payments then I don't see why not do it. If you get contributions from the place you work like I do then do it. If you're rich then do it. Otherwise any other situation I'd be looking to get a 2 year old car as I think that's probably the best point to buy a car as it's still very new but won't lose money as quick in year's 3,4,5 as in year's 1 & 2. Being able to get the car you want with the exact spec, colour everything is really nice and feel's like your car 100%. When you buy 2nd hand you nearly always have to make sacrifices.
If I could comfortably afford and had the inital outlay to purchase it new outright, then I would probably choose that option. Whether I thought it was value for money is another matter...
I wouldn't personally finance a car though.
I wouldn't personally finance a car though.
My friend tends to buy new, but he only keeps the cars for around 3-4 years before selling on. The general trend for him is the depreciation on a new car across that period is about the same as the depreciation on a second hand. Total cost for him is about the same, except his day-to day running costs tend to be lower due to no MOT's, no added costs due to failures and better fuel economy on the newer model. However, he is up in the luxury saloon end of the market, not base model hatches which depreciate eye-wateringly in the first two years. He has been burned with a Giulietta, for example, which he regrets, but at the end of the day he wanted a Giulietta when it came out and it's only a bit of money.
It does seem if you have a bit of capital to put down, you can get a better car and not take a massive financial hit.
It does seem if you have a bit of capital to put down, you can get a better car and not take a massive financial hit.
Dealer financing usually is a rip off when buying used from a dealer. However if you buy brand new the rates are a lot better. Audi recently offered me 7% APR on a new car with a dealer contribution of £4000.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
If you've got vast quantities of money and are simply not bothered then there is little reason not to just order whatever you want, new, to your spec.
But this doesn't describe most car buyers. Most car buyers are borrowing money to buy a car - not in itself a problem - but if you are far from flush you have to wonder whether it's really that sensible to take out a whacking great finance package on something that'll shed an enormous pile of cash in its first year. Most people buying new do so with a pretty small deposit so end up in negative equity pretty much right away. And for what? The new car smell? I've never driven a sub 12 month old loan car that didnt still have the new car smell. Your ideal spec? Fair enough on an A6 or something but just how much spec can you add to a Fiesta or something? Plus it's just as used as everything else once you drive it away.
I was lucky enough to drive a brand new car for a few months once - it was a box fresh 320i with 6 miles on it. To be honest with you it didn't feel appreciably different to the other E90's I'd subsequently drive - all with between 1 and 5k miles on them and worth a lot less. I shudder to think how much money that 320i lost between the day I drove it away and the day I handed it back. Luckily it was not mine and just a loan car.
It's especially confusing when the choice to buy new - an extravagence - is combined with money-saving-eco-stuff like low road tax. Why would anyone care about whether the tax is £35 or £135 when they've just spend £15k+ on a brand new car? It makes no odds. The fact you care about saving money on road tax or spending a bit less on fuel in the first place whilst ignoring the far bigger saving you could make is just bizarre. People obsess about little details like tax and mpg whilst either refusing to face the depreciation thing or pretending it doesnt matter.
Nearly new cars bought through approved used schemes are the way to go in my opinion. It's still new enough to smell nice. It's still got all the backup and warranty you'd want, which is usually easily extendable for far less than you'd have lost in depreciation on a new one. Most people buy dull diesel hatchbacks anyway so there are plenty of these around in a range of specs.
The reason why I couldnt buy new isn't because i cannot afford it but because I cannot think of a situation where there isn't another nearly new car I'd rather own. Lets take my favourite car, the 5 Series. Housey just bought one for about £34k. This would have got him a brand spanking new 520d SE with a few options in his choice of colour. BUt he didnt buy that. He bought one just 1 year old from a main dealer for the same money - but because it wasn't new he ended up with a 530d M Sport instead. Surely thats better?
When I bought the 335i I could have, for the same money, had a brand spanking new 318d ES. No prizes for guessing why I didn't bother.
If you crave a certain car and can afford it new then, well, thats probably different. If you really want a Porsche Cayman R and can afford a new one then, well, there probably isn't anything nearly new you'd rather own and its not as if a Cayman R is an eco-purchase anyway so why not. Ditto the A1 example above. If the A1 is really what you want and nothing else at any price does it for you then, well, never mind, order one new. But thats not normally the case with most purchases.
But a brand new Focus 'Style' diesel with £35 road tax? What a waste of time. Just buy a 6 month old Titanium instead.
There is a different scenario where it can make sense, too, but one that few people do. If you intend to keep your car for 10 years then arguably the difference between new and used becomes insignificant when depreciation is calculated on an annualised basis over such a long period time. Some of me fancies ordering a new 5 series one day and doing exactly that, but I bet when I came to sign on the dotted line I'd bottle it and take the 3 month old next model up instead.
Because the best way to make sure you get the spec you want isn't to max your budget on the options you want - its to buy a car some other poor sap spec'd up with absolutely everything
The 'my spec' thing is heralded as a huge thing but most people dont buy a brand new car exactly to the spec they want as the budget ends up stopping them ordering exactly the options they want and they end up compromising anyway, ie the guy with the 118d who ended up not ordering Xenons etc.
But this doesn't describe most car buyers. Most car buyers are borrowing money to buy a car - not in itself a problem - but if you are far from flush you have to wonder whether it's really that sensible to take out a whacking great finance package on something that'll shed an enormous pile of cash in its first year. Most people buying new do so with a pretty small deposit so end up in negative equity pretty much right away. And for what? The new car smell? I've never driven a sub 12 month old loan car that didnt still have the new car smell. Your ideal spec? Fair enough on an A6 or something but just how much spec can you add to a Fiesta or something? Plus it's just as used as everything else once you drive it away.
I was lucky enough to drive a brand new car for a few months once - it was a box fresh 320i with 6 miles on it. To be honest with you it didn't feel appreciably different to the other E90's I'd subsequently drive - all with between 1 and 5k miles on them and worth a lot less. I shudder to think how much money that 320i lost between the day I drove it away and the day I handed it back. Luckily it was not mine and just a loan car.
It's especially confusing when the choice to buy new - an extravagence - is combined with money-saving-eco-stuff like low road tax. Why would anyone care about whether the tax is £35 or £135 when they've just spend £15k+ on a brand new car? It makes no odds. The fact you care about saving money on road tax or spending a bit less on fuel in the first place whilst ignoring the far bigger saving you could make is just bizarre. People obsess about little details like tax and mpg whilst either refusing to face the depreciation thing or pretending it doesnt matter.
Nearly new cars bought through approved used schemes are the way to go in my opinion. It's still new enough to smell nice. It's still got all the backup and warranty you'd want, which is usually easily extendable for far less than you'd have lost in depreciation on a new one. Most people buy dull diesel hatchbacks anyway so there are plenty of these around in a range of specs.
The reason why I couldnt buy new isn't because i cannot afford it but because I cannot think of a situation where there isn't another nearly new car I'd rather own. Lets take my favourite car, the 5 Series. Housey just bought one for about £34k. This would have got him a brand spanking new 520d SE with a few options in his choice of colour. BUt he didnt buy that. He bought one just 1 year old from a main dealer for the same money - but because it wasn't new he ended up with a 530d M Sport instead. Surely thats better?
When I bought the 335i I could have, for the same money, had a brand spanking new 318d ES. No prizes for guessing why I didn't bother.
If you crave a certain car and can afford it new then, well, thats probably different. If you really want a Porsche Cayman R and can afford a new one then, well, there probably isn't anything nearly new you'd rather own and its not as if a Cayman R is an eco-purchase anyway so why not. Ditto the A1 example above. If the A1 is really what you want and nothing else at any price does it for you then, well, never mind, order one new. But thats not normally the case with most purchases.
But a brand new Focus 'Style' diesel with £35 road tax? What a waste of time. Just buy a 6 month old Titanium instead.
There is a different scenario where it can make sense, too, but one that few people do. If you intend to keep your car for 10 years then arguably the difference between new and used becomes insignificant when depreciation is calculated on an annualised basis over such a long period time. Some of me fancies ordering a new 5 series one day and doing exactly that, but I bet when I came to sign on the dotted line I'd bottle it and take the 3 month old next model up instead.
Because the best way to make sure you get the spec you want isn't to max your budget on the options you want - its to buy a car some other poor sap spec'd up with absolutely everything
The 'my spec' thing is heralded as a huge thing but most people dont buy a brand new car exactly to the spec they want as the budget ends up stopping them ordering exactly the options they want and they end up compromising anyway, ie the guy with the 118d who ended up not ordering Xenons etc.I'd love to see the maths on this because the depreciation curve on his choice of car would have to be completely linear irrespective of age for this to be the case. Few cars are like that!
Even more the case then - in terms of raw £ you'll lose far more on a new luxury saloon than a new base model hatch. Just see how much a new 7 Series costs and then see how much a 12 month old one is!
Ah didn't realise brand new finance is that good.
You can get high street loans at 7% so whilst its not a ripoff its not some sort of rare bargain exclusive to new car customers, either.
That said you do sometimes get rates much lower on new cars, though typically (but not always) these are offered at list price so you are effectively giving up any discount you might negotiate in return for 'cheaper finance'.
When buying any car the only figure that matters is total cost of ownership.
Because a car that costs £20k to buy, loses £10k and does 50mpg could cost the same to own as a car that costs £20k to buy, loses £5k and does 30mpg, in totally simple terms at least.
That said you do sometimes get rates much lower on new cars, though typically (but not always) these are offered at list price so you are effectively giving up any discount you might negotiate in return for 'cheaper finance'.
When buying any car the only figure that matters is total cost of ownership.
Because a car that costs £20k to buy, loses £10k and does 50mpg could cost the same to own as a car that costs £20k to buy, loses £5k and does 30mpg, in totally simple terms at least.
Associate
I've had this discussion with my father, and this is where all logic and sense goes to die.
A brief story will explain this:
My father earns very good wage £125k+ and lives in a cheap area of Wales, so house prices, insurance etc is all very reasonable.
So he bought his cars brand new, and usually kept them for 3 years and traded in when buying the next car, usually a Honda Accord.
A few years ago I told him to forget buying new, and I would find him a far better spec Accord that's only a year or so old with a big saving. He agreed, but it ended up having to come from a Honda dealer.
I found him a 13 month old car, so had just had it's service and such for a saving of over £7k from a new one, all the first year niggles has been sorted, and best of all it had done just under 6k miles and was owned by the manager of the Honda branch. He was now of agreement it was a superb deal over buying new.
Fast forward two years and I needed a car, and duly purchased his Accord off him, and by the time he hard ordered a new 'new' (shape) Accord, as he got used to the exec spec he purchased the top spec too. Fuming is a understatement, but it get's better.
He took the new car to work one morning, came out in the evening and some idiot had reversed into the rear, only by luck the local branch fixed this for free due to my father being a long term customer and it was good PR for them.
Anyhow after this incident he didn't want to risk the new car in work, so he went out and purchased a £2.5k Polo, true he kind of needed a second car for when Mum wanted a car, but still! He now loves the little Polo and hardly ever drives the Accord, so it does around 4k a year.
This is the logic and thinking of a new car buyer
I'm glad he earns enough to be able to afford such ways of buying cars. If only he was into fast cars, I'd have been sorted!
edit:
These days he never trades in his car, we all buy them off him for ever more loss, so my car's never depreciate in my pocket
A brief story will explain this:
My father earns very good wage £125k+ and lives in a cheap area of Wales, so house prices, insurance etc is all very reasonable.
So he bought his cars brand new, and usually kept them for 3 years and traded in when buying the next car, usually a Honda Accord.
A few years ago I told him to forget buying new, and I would find him a far better spec Accord that's only a year or so old with a big saving. He agreed, but it ended up having to come from a Honda dealer.
I found him a 13 month old car, so had just had it's service and such for a saving of over £7k from a new one, all the first year niggles has been sorted, and best of all it had done just under 6k miles and was owned by the manager of the Honda branch. He was now of agreement it was a superb deal over buying new.
Fast forward two years and I needed a car, and duly purchased his Accord off him, and by the time he hard ordered a new 'new' (shape) Accord, as he got used to the exec spec he purchased the top spec too. Fuming is a understatement, but it get's better.
He took the new car to work one morning, came out in the evening and some idiot had reversed into the rear, only by luck the local branch fixed this for free due to my father being a long term customer and it was good PR for them.
Anyhow after this incident he didn't want to risk the new car in work, so he went out and purchased a £2.5k Polo, true he kind of needed a second car for when Mum wanted a car, but still! He now loves the little Polo and hardly ever drives the Accord, so it does around 4k a year.
This is the logic and thinking of a new car buyer
I'm glad he earns enough to be able to afford such ways of buying cars. If only he was into fast cars, I'd have been sorted!edit:
These days he never trades in his car, we all buy them off him for ever more loss, so my car's never depreciate in my pocket
Last edited:
Soldato
I bought new last time...skoda were dong 'vat free' but in reality its a dealer discount to cover the VAT and 2 years interest free..as I had a paid for car to trade it covered the 50% deposit
so my car was paid for nearly a year ago so money just been put into bank
car is still worth a canny wedge so will be a big deposit on next motor...I am thinking alfa next..they are offering good finance deals at moment
so my car was paid for nearly a year ago so money just been put into bank
car is still worth a canny wedge so will be a big deposit on next motor...I am thinking alfa next..they are offering good finance deals at moment
Exactly my thoughts.
Would you buy a brand new Focus Style or a 6 month old Focus Titanium X with Nav if both were the same money?
They are offering one of those daft hire-purchase/leasing options at £200~ a month.
Certainly not the way I'd look at going, as the final balloon payment is sodding huge, and you'll almost certainly be in negative equity/tied in to a new lease after the term (as is the true incentive to the manufacturer with these "cheap" financing packages), but again, if youa re just trying to keep your motoring outgoings fairly fixed and low £/month, then I guess it draws a few people in.
Last edited:
My fiance bought a new fiat 500 last year, with a car like this it worked out so much better, and as it is a woman buyer the car had to be just right!!:
2-3 year old with a spec were after still fetching around £8k
On a finance deal with little deposit it was going to cost £200 per month over 4 years I believe
No decent warranties available
We bought new:
Exact spec we wanted
Very good finance deal over 4 years at £190 with around £3k to pay off at the end (we are thinking the car will be worth atleast £6k!)
Worry free motoring for 3 years, only service & £35 road tax to worry about
Buying new worked out fantastic on this car as they do hold value quite well.
Would we look at buying new for my car? Probabally not...
I would prefer a 6month - 1 year older car but a much better spec
The cars I would be looking at depreciate much worse
I am not a woman!
2-3 year old with a spec were after still fetching around £8k
On a finance deal with little deposit it was going to cost £200 per month over 4 years I believe
No decent warranties available
We bought new:
Exact spec we wanted
Very good finance deal over 4 years at £190 with around £3k to pay off at the end (we are thinking the car will be worth atleast £6k!)
Worry free motoring for 3 years, only service & £35 road tax to worry about
Buying new worked out fantastic on this car as they do hold value quite well.
Would we look at buying new for my car? Probabally not...
I would prefer a 6month - 1 year older car but a much better spec
The cars I would be looking at depreciate much worse
I am not a woman!
The deals that were previously available on the likes of the 107 urban lite made sense too - again you would be looking at a pcp type deal but with the car costing just under £6k and still selling privately (at least at an asking price of) £3kish for what is now a 5 year old vehicle you're almost into throwaway money assuming financed on some sort of monthly payment basis.
Associate
This my thinking with the GT86 when it comes out.
However, you're actually taking even more of a gamble, your cars that had faults, if they weren't new models, maybe you could've been forewarned by other owners having similar faults. With a brand new model (especially with the GT86 as it's a brand new everything) you have the problem that no one has driven it on the road for any length of time.
I think the finance deals on new cars have gotten significantly better than when I last looked; perhaps because the dealers weren't shifting enough vehicles or something. My auntie just got a decent-spec Astra (well) brand new for £14k on 0% interest which I thought was pretty impressive.
