New family car and justifing budget

[Capt Doufos]

Hey everyone,

I am just thinking out loud really, but interested in other opinions.

We have been in the market for a new family car for a while, unfortunatley I should have upgraded years ago and now the current market has been putting me off, it seems even mediore cars are crazy (imo) money. The most I have ever spent on a car before was around £10k about 10 years ago on a 3 year old honda civic. Inflation is a thing as well as the current inflated prices to get a comparable Civic now is in the region of £16-17k.

We are looking at CR-V's as Honda has done us well for the last two family cars they get decent reviews and my Wife likes them. What I am struggling with is even a 2016/17 with 100k on the clock is knocking £15-£16k. It's possible to get a newer generation model for £10k more than that with around 25,000 miles on it which seems better value. We don't do a huge amount of miles so over time this would likely become a low mileage vehicle, with some really crude depreciation calculations I don't think that over the next 10 years we would be much worse of if we bought a newer model maybe ~£3k more total cost. I think I just struggle with the idea of £25k being tied up in a car along with the possibility this could be possibly the worst possible time to buy one given the current financial climate potentially leading to prices crashing once demand reduces. We are fortunate enough now to have the money available but I don't want to spend more for the sake of it.

Is that thinking reasonably sound? Is it stupid to spend 25k on a car now when we could wait? YOLO? I am used to buying 6-10k cars that are worth nothing at the end of my ownership

Thoughts?

 

[Hades]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

 

[MissChief]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

Have to agree with the learned gentleman here. It’s highly likely that as the recession bites and Gas and Electrivity prices begin to bite most car sales will slow to a crawl. Prices will inevitably fall due to this. If your current motor is doing fine, spend a small amount on new headlight bulbs, new wipers and get it cleaned and fix any minor cosmetic issues. It’s surprising how having a minor spruce up of your current car can change your attitude to it. Buy in summer next year and prices will, I suspect, fall considerably.

 

[gc123]

when i bought my mondeo i was told by a family member i was mad due to high mileage....had the car a few years now and although it had teething problems at first and obviously very little use over covid it now appears to be average to low for its year 59 2009 148 ish thousand i always work on 15k a year business or 12k a year private, but either way the same year car with more mileage is surprisingly more than i would have expected mine to be.
if your prepared to look past the numbers in front of you and do do low mileage then crack on . i always service the car and have things like belts etc changed on time so no problem.
hondas..... well i have my sons accord diesel on the drive 2004 200k done 0 mileage in the last 4 years that im getting ready for mot, and the wifes everyday daughter and back fr-v with 200k plus , every year i say we will get rid of it and every year it passes its test, only problem was a broken timing chain which i had to swap out the engine for a lower mileage unit from a crv. other than that nps.i keep saying they will all outlive me but recently someone has been looking at kugas so maybe big changes hehe.


and yes we all know cars are expensive , personally i hope we may be due a drop soon , having been asked to look at loads of adverts by the other half , people are getting crafty at hiding cat c/d/n etc in the advert write ups so you have to check so closely.

 

[Rilot]

Our current CR-V is over 140k now and is still going strong. Just drove it to Poland last week to see family and it didn't miss a beat. Ours is an older model though (2008 2.0i EX).
However, I wouldn't want to be paying £15k for a 100 mile 2016 car though. I appreciate that that's the market at the moment but it seems crazy to me.

 

[Doobedoo]

Not a chance I would pay that for a 100k car.

 

[Capt Doufos]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

Biggest things are just having had it so long, car is on 117k but is fine otherwise, not the quietest on long journeys. We could do with a bit more space and the ability to transport bikes. The options seem very limited for a mk8 civic. That and now being in a better financial position to get something to serve us whilst the children get a bit older. Just worried that waiting can end up with us being 5 years later and no change. Like most in life its all risk management.

I don't have anything against high mileage newer car, I just have something against expensive high mileage cars. It seems to me nuts to spend £15k on something that will become worthless due to the milage, at that point it seems you may as well invest the extra to have something that will retain more value.

 

[Gregvivi0401]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

I would do exactly that.

 

[a1ex2001]

Biggest things are just having had it so long, car is on 117k but is fine otherwise, not the quietest on long journeys. We could do with a bit more space and the ability to transport bikes. The options seem very limited for a mk8 civic. That and now being in a better financial position to get something to serve us whilst the children get a bit older. Just worried that waiting can end up with us being 5 years later and no change. Like most in life its all risk management.

I don't have anything against high mileage newer car, I just have something against expensive high mileage cars. It seems to me nuts to spend £15k on something that will become worthless due to the milage, at that point it seems you may as well invest the extra to have something that will retain more value.

I’d stick with what you have, if you wait another 5 years and nothing has changed either the money in the bank will be worth more or you will have saved a bucket load of cash no having a car on the never never. Only way I’d by a car right now is if I was desperate ie mine died.

 

[hurfdurf]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

I’m struggling to do this at the moment. I’ve been getting impatient for the recession and reduction in car prices.

 

[Rroff]

Prices can be crazy but no way I'd pay 15K for a 100,000 mile, ~5 years old, family car - I recently bought a 2017 Qashqai (force of circumstances rather than my choice) with 40K miles for 14K (decent spec variant so a little more than average) and even that is pushing it but that is the cost these days.

 

[inflames]

What is the reason for wanting to upgrade now? Is your current car needing work or unreliable? Personally I would be waiting if I could to see what the hell the economy does.

I am doing exactly this. Me and wife want to change both our cars but waiting to see what happens first. The current car market is silly.

 

[Terminal_Boy]

You won’t go wrong with a CR-V, just don’t buy one now.

 

[Gregvivi0401]

I am doing exactly this. Me and wife want to change both our cars but waiting to see what happens first. The current car market is silly.

I am in same position will wait.

 

[HangTime]

It’s highly likely that as the recession bites and Gas and Electrivity prices begin to bite most car sales will slow to a crawl. Prices will inevitably fall due to this.

Unlike prior recessions supply is also very low. Cost of living might suppress demand a bit but there have been much lower car sales in the past couple of years than normal, meaning much less used stock on the market. So dealers don't need to offering big discounts to try and stir up demand because there isn't a supply glut. Low supply and low demand should mean cars hold their value longer than in a high/normal supply, low demand market you'd typically get in a recession. It's an unusual situation in that new car sales normally decline during a recession, not prior to a recession so in a normal recession the decline in the <3 year old used car supply normally lags the recession, whereas today it's happening in parallel.

The recession should squeeze the poor buyers out of the market but the industry might be able to sustain themselves with the richer buyers who are not going to feel the squeeze, simply because there will be enough of those around to buy their stock without them having to slash prices. A £4k annual energy bill isn't going to deter these buyers, they already have big wads of cash burning a hole in their pockets.

That said, it's not unreasonable to expect the used car market to continue to decline from it's unsustainable position seen last year and the recession should impact it slightly. We're in a similar position that we'd like a new car but prices have shot up so it's hard to find anything offering good value.

The elephant in the room is what's happening with new car prices, getting hiked all the time. The list price on the car I've been eyeing up since January has already been hiked about 10%, it's gone from like ~£28.5k to £31.4k.

 

[MissChief]

Unlike prior recessions supply is also very low. Cost of living might suppress demand a bit but there have been much lower car sales in the past couple of years than normal, meaning much less used stock on the market. So dealers don't need to offering big discounts to try and stir up demand because there isn't a supply glut. Low supply and low demand should mean cars hold their value longer than in a high/normal supply, low demand market you'd typically get in a recession. It's an unusual situation in that new car sales normally decline during a recession, not prior to a recession so in a normal recession the decline in the <3 year old used car supply normally lags the recession, whereas today it's happening in parallel.

The recession should squeeze the poor buyers out of the market but the industry might be able to sustain themselves with the richer buyers who are not going to feel the squeeze, simply because there will be enough of those around to buy their stock without them having to slash prices. A £4k annual energy bill isn't going to deter these buyers, they already have big wads of cash burning a hole in their pockets.

That said, it's not unreasonable to expect the used car market to continue to decline from it's unsustainable position seen last year and the recession should impact it slightly. We're in a similar position that we'd like a new car but prices have shot up so it's hard to find anything offering good value.

The elephant in the room is what's happening with new car prices, getting hiked all the time. The list price on the car I've been eyeing up since January has already been hiked about 10%, it's gone from like ~£28.5k to £31.4k.

i'd imagine there will be a lot of leased cars coming to the end of their agreement or even being given up later this year or early next too.

 

[Hades]

i'd imagine there will be a lot of leased cars coming to the end of their agreement or even being given up later this year or early next too.

Yep. I had a lease end last December. I didn't renew and decided to "downsize" to just one car.

 

[HangTime]

My point is there will probably be fewer lease cars coming onto the used market because fewer of them were registered over the past couple of years. 2020 and 2021 there were only about 1.6m new car registrations which is massively down on normal, even the last recession had much higher new car registrations. So the number of ex-lease cars hitting the market in 2023 should be lower than in say 2019 for example.

One reason you'd normally get cheap cars in a recession is because of the 'delayed wave' of vehicles that were sold new in the years prior coming onto the market, these were sales that were done before the recession. What's different now is supply chain disruption meant that the registrations of new vehicles fell off a cliff a couple of years before any recession will start. So there are simply less leases to be given up than normal, less business vehicles to dispose of, less private sales etc in theory.

Perhaps the simplest way to think about it is to remember that every used car sale by definition must at one point in time have been a new car sale. Therefore if you have reduced new car sales, you have a 'time bomb' scenario whereby that will inevitably filter through to the used market in some shape or form.