Why buying a new car can be more risky than buying used!
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- เผยแพร่เมื่อ 16 ก.ค. 2024
- You may be aware about the risks of buying a used car, but did you know that you're likely taking a far greater risk when buying new?
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Laws and driving rules may be different in your country. The makers of this video cannot be held liable for any consequences caused by any information that is in any way inaccurate, misleading or missing. The makers of this video are not liable for any person's driving other than their own, it is the responsibility of the person driving a vehicle to ensure they drive safely and within the law. The makers of this video are also not liable for any person failing a driving test as a result of the information provided in the video.
00:00 New more risky than used?
00:20 Risk 1 - Time & depreciation
01:11 Base spec car
03:19 Mid spec car
04:55 Top spec car
06:26 My car
06:58 Risk 2 - Negative equity
08:16 Risk 3 - Bad deal
10:19 Pre-registered
11:24 Electric car targets
12:47 Risk 4 - PCP circuit trap
15:09 Do your research
17:25 Why I bought new?
All I can say is bless you the people who buy new for what you do for the rest of us
my sister got a KIA EV, she lost 60% of money she said in just 2 years.
@@newchannel1220 nice wee saving for next owner thanks for buying
I appreciate those videos which aren't only related to driving or road rules
Watching after booking a new one😅
😂😂😂
If you already bought it, then just enjoy your new ride.
Me too!!! Haha
I nearly bought a new Audi A7 2 years ago, test drove it but before I signed the finance contract I thought why not just buy a used one in cash for just under 20k.
No finance payment, just fuel and maintenance which for a whole year is around the price of what the finance would've been for 1.5-2months.
@@SourceHades good choice, shoulda went s7 haha
It's been common knowledge for many years amongst working class people I would say. My dad told me 10 years ago make sure you stick to a used car and if you want something new, get a 'new used car' something that's under a year driven and only a couple of thousand miles on it at most. That way you get the best of both worlds; a car that's new enough, but not one that's been ruined. I never quite realised how much you could lose on a car that quickly though, very surprising!
The interior of your car is in outstanding condition for 200k miles. And I like the way you justify your MX purchase!
If I remember correctly from the Leon video, seats have been 2 times replaced already and steering wheel 3 times all for the learners' comfort :)
@@YS_Production That would make sense!
My dad has an Audi A8 on 190k miles and it looks brand new. There's the tiniest leather creases in the leather seats but everything else inside out looks like he bought it a few months ago.
I passed my driving test with 1 minor last week, Thanks Richard, your videos have been a huge help!
A neighbour bought a new car, had to go back as Dog didn't like it! Lost thousands.
that's the dumbest reason to sell a car
just have the dog jog if that's what it prefers
imagine returning a brand new car back just because your dog didn't like it. Lmao. Talking about being slave to a dog.
My neighbour bought a new Hyundai Kona EV not too long ago. Unfortunately, the battery failed and the warranty was void because the dealer claimed there was slight damage to the underside of the car (where the battery is). This is despite Hyundai knowing about a common fault with the battery. Seems like the dealer were avoiding paying out.
That's not a nice way to call the missus! 🐶🐶
@@rarespetrusamartean5433 what if you need to put the dog in your car? i.e. vet appointments? i asusme most people dont want to stress out their dog
Great round up but confused you didn't mention another risk, severally damaging and having the car written off within the first year or so! It has exactly the same risk as trying to sell the car within a short period of time! Insurance will only cover up to what the trade in price is! It's the whole reason GAP insurance exists. (maybe a separate video here?)
Yes, this, but most insurance companies will replace new for old in the 1st year of ownership and you just transfer the finance over to the new car. This is why gap insurance is currently banned from being sold by dealers along with new cars. You need to buy gap from the second year. However, the risk is that if you buy a pre reg and are not the first owner of that car then you lose the right to new for old on insurance and will need gap. Something to consider if you buy a pre reg.
I've been watching some finance channels talking about car ownerships and still very impressed by your explanation. TBH your real life experience is a better reference than the mock up examples from those finance TH-cam channels! I like you have included base spec to top spec cars and the hidden cost. Didn't expect you've got some 0% interest deal and to pay off part of the mortgage. That's very clever!
You are so chill Richard
Great video mate.
This is very comprehensive. Thanks for the video
Thank you for this video! Extremely helpful as always!
The risk of buying used is mainly we don't know how well the owner maintained the car or how much the second hand dealer is willing to hide from the buyer
Perfect timing, just passed my test with a LOT of help from yourself and now need to go shopping for cars! It would be amazing if you did a video on budget used cars, youve got a lot of knowledge and a lot of videos on 'first cars' assume youre a teenager - I cant buy a two door tiny 206 type thing as I have a family!
Congratulations on passing! This video may help: th-cam.com/video/k3SCr4BSzYc/w-d-xo.htmlsi=nYAYxmBbprsJGCfL
@@ConquerDriving thank you!
The car I have was just over £21k brand new, I bought it for £9500 with some free paint touch ups at 2.5 years old with 40k miles, the 1st owner paid for options on it and only had it for a fraction of its life and spend loads of money on it. I've got it for 90% of its life but paid less than half the cost for it.
Not very smart lad are you 😂
@@Bane1Mirin How so? I get most of the cars life whilst paying a lot less than the 1st owner did to have it for a very short time period. You go and spend big money on a new PCP car every 3-4 years and enjoy losing a huge chunk of disposeable income.
You never know how the previous owner handled the car. He could have been abusive and you might find yourself dealing with expensive problems in near future. He could have been an old guy going to church once a month on a Sunday.
@@EmptyJarDoto thats almost 0 chance of happening. But his 60% discount is guaranteed
The math checks out. He made a wise choice
@@marcus.H It really depends on a car. If the car is an entry level sports car that appeals to youth - you can be pretty certain it was abused.
A few years ago, I considered buying a new car. But between paying a small sum to have place on a waiting list and the model becoming available to order. The dealer gouged the price and added over £10k on top of the RRP. At which point, I said I wasn’t interested.
In the end, three years later I actually needed to replace my 20yr. old car and ended up, buying a secondhand outright. Paying just £10k for my present low mileage car. Very pleased with it and much happier that I didn’t buy the new car. Present car is cheaper to run than previous car by 4.7p per mile, plus £300 less to tax; and cheaper by 16.6p per mile than the rejected new car, plus nearly £200 less to tax. And of course, someone else took the major depression hit for me.
Interesting video thanks, I passed last year and was struggling driving the 14 year old Golf Plus I had inherited, due to health reasons I needed to switch to automatic. I did my research so I understood PCP and lease side of car buying and decided to buy a not too old car but to get a smaller car and luckily could be a cash buyer. I eventually saw a Hyundai i10 automatic that was 18 months old and a good price at a dealership, I have a 5 year warranty and as long as I use a Hyundai garage I get a years roadside assistance too. I’ve been happy with my car so far and hope I made the best choice for me.
You're good at explaining this stuff, man! I can tell😁 I worked in automotive industry (sales, management) for a long time back in Romania. I enjoy your videos!👍
@@rob-fb5xs nowhere in my comment I have hinted that. Mad assumptions regarding what I think is all you have, but you're wrong. The wear and tear of a 2 1/2 year old has some variables - depending on the previous owner, if it's a mainstream or premium brand, transmission type and so on - but in general it is not as tragic as you make it out to be. Seems you didn't watch the video tho'. The driving instructor is also talking about pre-registered vehicles, many with only delivery miles on the clock. I agree a brand-new car has undeniable benefits, but it depends on everyone's situation which option is best for them. People need all the data to get the big picture and make a decision that is best for them. One important aspect is that you lose ~30% of the value on a brand new-car simply by driving it out of the showroom. Depending on the model and make, chances of making a good deal by choosing a 1yo -2yo used car are quite high.
What a fantastic video Rich!
Thank you Richard for the video! I have never learnt about pre-registered cars and this may open up a few more options for me!
Richard, you have the best advice from a consumer viewpoint out of anyone i’ve seen on youtube! It’s a shame you don’t have an american twin, so i can’t get specific information on our laws and dealer tricks
To be honest i don't understand the arguement of depreciation. I got a new car 10 years ago and bought a second car new last year and i absolutelly don't plan to sell them. Sure you can have bad luck and need to get rid of it, but if you go by that logic, you can effectivelly never do anything in life, because you always have a risk of loosing it. Depreciation is only a concern if you want to sell the car later on and in that case logically you wouldn't even look into a new car; because then you only care about having transportation for a few years, instead of a certain vehicle you really like and want to keep using as long as it lasts.
When it comes to financing a car everybody is different and people need to think for themselfs how they handle their money. But i personally find it extremelly wasteful to take credits and go into dept for anything that is not a house. And when it is a house, the only reason i would consider a credit, is the fact that while it is very expensive, you still would waste the money for monthly rents in an apartment anyway. So in that case you may eat the dept for the greater goal of having a house for your kids later on.
Because i grew up in a "poor" middle class family i learned basically two things in my life: one - always make the most use possible out of something you have and replace it when it's not repairable or it is not getting the job done anymore. two - always save up your money, then set the budget for something you wanna get and after that look at the market and compare prices and functionalities before making a decision.
That have a lot sense. usually mechanics do not buy new cars. me neither. I bought one for £900. I repaired it myself. it has 173k miles on it. and I honestly, so happy. I laugh, pay 14k for a car. no way. as you mention, you can buy a new car. and take care of him until last maybe 20 years. why not.
This video is clearly not for someone like you. You're someone who understands the risks and considers which option is best for them. Richard is trying to inform about these risks, not discourage buying new cars altogether.
Think of depreciation as opportunity cost. How much money would you have lost compared to if you bought a car a year old and invested the difference. How much money saved on finance, or in your case how much money you would save on your mortgage.
I take issue with your argument about bad luck. The probabilities are the same but you can bet more money or less money depending on your appetite for risk. Do you want to play with 50k, 20k, or 5k?
I bought a 10 month old Mazda3 last year with less than 2k miles. It was a £9k saving on a new one.
I bought a new car once, it was a unique car and just released. But I didn’t intend to keep it forever because it was not a forever car.
I bought a car I liked, but I didn’t spend above my means.
I now have a brand new company car, it’s not mine, and I’ll keep it for 3 years then I’ll have to change it.
That’s ok, because it’s costing me a lot less via salary sacrifice, and I am once again spending way less than I can afford to spend, so that as technology improves, in 3 years I’ll get an even better model.
If I could get a fantastic finance deal on a new car with some serious discount then I would probably buy new again.
Thank you for your fantastic video. It was very helpful.
Lots of people swear by buying 1 or 2 yr old cars thinking of they will avoid high depreciation BUT fail to notice that they are actually paying almost what the car cost when new, sometimes more, because new prices rise so quickly. Yes the first owner loses a lot but the dealer benefits not the 2nd owner.
Man this is sad. We got a brand new bmw for the first time, waited for it to be custom made. It only lasted us 24 days and someone smashed into it and the bmw salon just left it out on the rain with no replacement window for months. They just passed it with a straight face in the morning behind their parking lot without a second thought of heartache that a brand new car the same people helped us to order us just rotting there. They didn’t even bother putting it in some covered space. Needless to say this was a huge contribution to us moving out of uk all together.
I Like Your Ideas Really good to listen,And I Learn a lot Thanks😊
I ended up with a brand new Mazda also after initially looking for nearly new. A hefty discount from a dealer via carwow meant a new car ended up being a very similar price.
This is a gem! An absolute gem!
I love your "man" logic, its way i explain every new/used motorbike I get. I was once asked how many bikes do you need, the answer is one more than I have in the garage now!
Well my Honda Civic 2001 with 178000 miles says i depreciated a long time ago but still drives like new
Is it the Rover 45 type or the next one that had the gear stick on the dash?
Thanks for video!
So go find a pre-registered version of what you were considering new. That Leaf comparison was eye-opening.
Excellent advise as always from Richard. The moral of the story is to always carefully consider something before you commit. Applies to most things in life.
Except marriage, just dive in.
I have only bought 2 new cars in the 40 years I have been driving. The first was a Corsa 1.2 which after 3 years was as you say worth barely more than the finance. The second was our end of production Defender 90 in 2016. Brilliant motor, the only car that went up in value by over £5K when we drove it off the fourcourt. 8 yeas later its still worth almost as much as we payed for it. And for all those dismissive of LR its hardly had any issues and these have all been fixed under warranty, though we have extended LR warranty. I also kept that going on my other Defender until it was 13 years old. That motor is 18 years old now and still going strong as my daily driver. Again its still worth as much as I payed for it when it was 5 years old.
This is why you drive test the car before buying it an never accept test drive routes shorter than 10 km. In 10km at least you can see how it goes after it's warmed up.
This is true - my last car, I hired the same car for a weekend this made my mind up for me. I gave me enough time to really know it was the right choice.
@@rufdymond This is the best way to go about it if possible. Unfortunately, you may not find you exact car but at least try something with the same engine or same body / options and see it it fits your needs.
excellent advice
Very useful video.
I found myself trading cars in every 4 years PCP realising they were pretty much breaking even each time. So I was essentially renting the car and make nothing or next to nothing at trade in.
It was cheaper than leasing the same car (even though you don’t pay maintenance on leasing, you often get stung by charges for tiny scratches etc) BUT if you weigh up the monthly payments on PCP vs PCH on a sensible USED car - you can at least get something nearly new, for similar monthly payments, and get 100% of its value back after the agreement.
So if you like a new car every 4 or 5 years. I reckon a PCH on the best used car you can comfortably afford is the way to go.
There’s so many variables, but last time I got £5500 at trade in, and I was paying exactly the same per month as the last PCP I did, which I got £800 for at trade in.
The only negative is that someone else has driven it, and you might find the steering wheel hasn’t been looked after, or some scuffs here and there. But there are so many brilliant cars with low mileage that come in so much cheaper than the same brand new example.
Buy outright or do PCH I say.
General advice: don't buy things that depreciate on credit where you have to pay interest. Unless you really need the thing, can't afford to buy it in cash and can't wait till you've saved up the cash. In that case, you make compromises, you don't buy new, you find something that you can afford and buy it with the largest deposit and smallest repayment term possible to minimise the interest you'll pay. You calculate the payments out and think long and hard about whether you can afford this, what inflation looks like and whether you'll still be able to afford it after N years of inflation and a possible financial loss (e.g. you lose your job and take a while to find another one, your landlord bumps up your rent again, an emergency expense happens that you hadn't planned for). If you still think you can afford it, go ahead and good luck.
Thank you for this! I’d love a new car but in 6 years time, it’ll be the same age as my car now. I know thats obvious so I might just hang on a little as my little car now does the job xx
Im a good driver today thx to u my instructor😊
I bought a 10 year old car 9 years ago for less than 1k. It's now 19 years old and definitely on it's way. It hasn't cost me that much to maintain in that time. Maybe I got lucky. It's been one of the best cars i have ever owned.
See, this is why I bought a Peugeot 107!😅
To be honest there are many valid points. I havea used car and a brand new just some month old. I think for myself as I bought it without any loans just spent some of my savings. The new car will be mine as long as I can keep it. And yes a bit higher the cost of running due warranty and higher taxes but I'm planning to use it for at least 10 years and its a bloody reliable car due that in my country its keeping the price high. But many people dont think like me ending up like the examples as you mention. Interesting topic and usefuls tips thanks for that... and yes I"m in the group who is willling to lose money over a new car but I calculated all the risks and hopefully im not wrong :).
Enjoyed this video even though I'll never buy new (too poor for a start haha). I spent £1800 on my 21 year old Honda Accord 3 years ago and haven't had any problems with it at all. (except it recently failed its MOT for a worn bushing on the lower control arm, but it's all sorted now) I'll keep it going as long as I can, although being a Honda it'll probably rust before the engine wears out haha. 106K miles on the clock now, was 82k miles when I bought it.
I was recently in the market for a new car, thanks to the joys of PCP, so I went back to the local dealer with what I wanted and the "best" they could offer me was an almost 5 year old used, lower-mid spec version of what I was after for double what I was paying on the current car which was just under 4 years old, and no extras included like tow balls, etc.. I told them I'd think about it and shopped around and found a dealership not too far away with the GR spec (top spec) of what I was after, so booked a test drive with them. It's an "ex demo" model, but had less than 1000 miles on it when I took it out. They offered me a better part-exchange price for what I currently had than the first, and the same per month price PCP as the first place. So don't be afraid to shop-around if you're on a PCP and either can't buy outright at the end, or are scared of that final lump sum.
good cheap cars for learners are the older citreon c1 ford ka fiat 500 & nissan micra! mine is 2017 citreon c1 and it hasn't let me down! :)
Wow, the Nissan Leaf has change, it actually looking good now.
good to know, although buying a new or nearly new car is an absurd demand those days, my current income can not allow for such actions so i went for used car, i dont regret paying the price because im happy with how it is optioned but the repair costs come so far at equal the car price i paid atleast within first year of ownership of this used car from 2005, hopefully once i fix everything previous owner neglected it will be stable.
Great points in this video. I bought a new Skoda this month, 5.8% interest PCP with a 25% deposit (without test driving it, I know risky!), but I knew this was the car I'd be keeping for as long as possible, so depreciation didn't matter to me. I upgraded from a 2008 base spec Fabia that was costing me more every few months than it would ever be worth, so to me it just made sense. I also saved almost £200 a year on insurance (despite double the BHP) because of newer safety features, I guess.
I'm lucky enough that on top of monthly repayments, I can save enough extra to pay off the optional final payment without refinancing (I imagine at double the interest rate!).
If you find yourself in the PCP trap though, but still want those new cars, just get out of it and lease them instead! You'll save so much money. But if you _can_ afford the final payment and plan to keep it long-term, go ahead and buy new. PCP has the perks of the dealer contribution, plus the interest rates are lower than a personal bank loan these days (5.8% vs the average 6.9% from banks currently).
At my age I buy a nearly new ICE car and pay cash. I get two years warranty on the car. With dealers trying to sift electric cars I am not sure that makes sense any more.
At my age I am not sure how much longer the government will let me hold a driving licence as they want to get everyone out of cars, starting with the old and then the young drivers.
All government's penalise the motorist, but do not offer an alternative.
With the roads in the state they are now, I am looking at a Bradley Fighting Vehicle as my next purchase.
Few comments:
Pre reg is considered as used car so that finance comes always more expensive ( no dealer contribution etc ) so alternative finance company is defo here
Depreciation on a brand new car comes from VAT in the first year just to keep in mind
My father still tells me the story of when he hitchhiked from Cornwall to Amsterdam in 2000 to save thousands on a pre registered RHD Peugeot 206 GTI registering it at the local DVLA office in Truro upon his return. He then sold it in 2005 and bought a pre registered Mk5 VW Golf TDI in Preston again saving thousands over the brand new dealership price. Our most recent new car purchase was a 23 reg VW Polo GTI last May, we found the price difference between approved used and new negligible so went for new.
I don't like buying new cars because I'm not sure how reliable it is going to be. I rather buy an older, low mileage, used car because it gives time for everyone else time to rack millions of miles on the platform. I feel much more secure going in knowing what the common problems will be.
I factory ordered a split new Car delivered April 15 2014 , paid Cash. It’s still my Car on the drive and on low miles 36k miles and still drives like new after ten years. I got a test drive for a afternoon of a polestar 2 fully loaded it came in at £53k, lovely car big but hid it weight very well and so easy to drive. Six months later I got offered the exact same car now with 3k miles on it for £31k 😮
I think the younger generation have it right they don’t want to own Cars that are just money pits.
Since I can remember my family has not bought a new car, always a pre registered one. This has the additional benefit, that you can not say to your self after 2 weeks "Man, I wish I had configured extra package X and Y" because you never configured it in the first place. Especially with VAG cars, they have so many options, that the configurator would give me FOMO. "Should I take the Light package or the Light Pro package or the Light Night Package"-or something like that.
And that rule that a manufacturer has to pay 15 000 for every non electric car over the limit sounds a bit stupid. Imagine beeing a manufacturer that still builds affordable compact cars and then you sell a car for 17 000 including taxes and have to pay 15 000 as fine and actually losing money by selling a car, I get the point but it does not sound very benefiting to people without massive amounts of money.
Same with heat pumps. Very few houses are suitable and yet boiler manufacturers are nonetheless fined for not hitting targets, so they just pass the cost on.
And in case you're wondering, the Tories are doing this in an attempt to hit CO2 targets. Apparently it's easier to make it someone else's problem than do the job you're being paid to do.
And sadly I suspect Labour will be exactly the same.
@@loc4725I would suggest you check out Technology Connections video(s) on heat pumps - unless you live in the arctic or off the electricity grid there's almost no houses in modern countries unsuitable for using heat pumps.
They obviously won't solve the climate crisis alone but technologically they pretty much only have upsides compared to traditional gas and even more so compared to resistive electric heating.
The real issue with them rn is that even though energy wise they're more efficient than a gas boiler (even if the electricity used to generate them comes from the same natural gas that would be pumped to a traditional boiler), electricity is so much more expensive to buy residentially than gas that it doesn't make financial sense for end users, especially in the UK where the disparity in price between electric and gas is pretty severe. But this is a pretty easily fixed political issue rather than a fundamental problem with the technology itself
Dude opened my eyes
I've bought brand new once and once only, I went mad and bought a brand new Vauxhall Corsa in ice white, 1 Month I had it before a truck skidded and crushed it against the wall where it was parked. It was written off and I got 2 thirds of what I paid for it. So I bought the same model nearly new in Grasshopper Green and I loved that car, until my dear Son destroyed it, I'm getting used to the Fiesta he bought me as a replacement!
Well, my car stopped depreciating about five years ago. Now it's appreciating. Classic Honda.
Enjoyable and this is the way I looked at things. However never really faced the possibility of trading in after days 😬 Last time you did a “cost” (environmental cost) analysis a comment said: stay away from politics……. Sad world we live in!! Love your content👍
As you said sometimes nearly new is almost as expensive as a discounted new car. The only problem with buying used is all the damage you inherit, but I guess that only bothers some.
Also a newer car has more safety features and other things like Apple car play or Android auto
It's mad how financially illiterate so many people can be.
A lot of it is basic maths and doing your research (shopping around), with everything online now it's so easy.
Richard clearly has he head screwed on right.
Personally I've always bought 4-5 year old used and kept them for 5-10 years, and I've done the same re-mortgage trick, but in reverse.
Meaning borrowed a bit extra on the mortgage to buy a car in "full" at a rate of 1.5%, rather than than going for car finance at 8% (or whatever it was, definitely much higher).
Ahah. This explains why a few weeks back I saw a dealer on CarWow selling a £32K electric Corsa for £14K off.
I have just brought a pre-owned citroen c4 cactus 16 plate for £5,500 i love it. I have the finance on it for 3.5 years I'm planning to sell it on a couple of years after the finance is off as 2029 I will look a buying a newer non electric cars then with the current zero emissions coming in
I went car shopping as an American about 6 months ago. I was set on buying used since this country, perhaps the world tbh, is experiencing really expensive prices and supply shortages. The problem is, so was everyone else. This created a shortage of used cars for sale. I couldn't find a used car for less than 25,000 in an Suv class (needed the 4 wheel drive for snow) most had in execess of 120,000 miles already on them. So I bit the bullet and went new for just another 10,000 more which imo seems like money well spent for the value of a warranty and getting new in comparison.
Things are wonky over here. I've seen lots of videos saying that there's a huge amount of inventory that's being hidden and held back so dealers can keep their expensive price tags since the economy is so expensive now. In any event it's really difficult over here to get an affordable "budget" vehicle either new or used. The powers that be rig the market this way so people keep buying new imo. Nobody here is happy about paying 30..40...50k + for a car but they do because most simply need the transport for work. Maybe the market isn't the same atm but this was my own experience about 6 months ago.
I'm curious what makes you think you need a 4wd SUV? There's always been places with snow and harsh weather but 4wd vehicles and SUVs weren't too common until about 20 years ago and people managed before that.
BTW I want to make it very clear I'm not looking for an argument here, especially as I don't live in the US, I'd just like to learn more about the thought process :P
Here’s an argument.... you can call US prices “expensive” when you start paying $7.12 a gallon, like we do here in the UK for gas. 🤣
@@matthewturnock8725 Because I work for the post office and am considered a "necessary employee" and must report for work even during snow storms and state of emergency closures when everyone else gets to stay in bed. 5am and I'm on the road before the plows touch them. If I don't show up at work I could get fired
@@Novaximus Ah that's fair - but this is such a niche scenario it's kind of crazy your employer doesn't provide or heavily subsidise your car considering it's such a big additional expense and literally needed for your job.
Considering a reliable regular car just for normal transport you can get for a few grand (at least I assume this is doable in the US, it certainly is in Europe / UK), they're effectively making you throw away half a years salary just for priviledge of being able to work for them :/
@@matthewturnock8725 lol that's the Post office for you. If I said more about it on here it could actually cost me my job :/ (they do spy on social media stuff) But yeah I agree with you. They'll just say "well you knew that when you signed up for the job"
this was rollercoaster of a video
One of the reasons why not many people buy new cars and lease them instead. It spreads the depreciation into a manageable monthly figure.
Whenever I've bought new I look at what the same car is selling for used at 1 year old then aim to pay closer to that for the new one. There are some big discounts out there. That way the initial depreciation is softened somewhat. Of course many will pay close to list for a new car which is when the depreciation really hits.
What you need to remember about the new car is that between £700 and £1000 are 9n the road cost number plates registration etc. 20% of the price is vat, . The moment you take delivery you can drop the price of your base toyota by £4500. When buying a car look at the price before tax and registration charges that will give you an idea of the value of the car that £16700 toyota is really £12.200. So if you where to sell it within a week that all you will be offered .
Bought a 10 month old Seat ibiza toca in 2014 from car supermarket £8,300 , Parkers price guide said £14k new , was made up 😁 went Seat dealer for 1st service they'd got a deal on , been on for months Brand bew Seat toca £ 8,995 was gutted 🥴
I agree with you about the fact manufacturers have likely increased the price of new petrol cars to cover these fines.
I bought a new audi a6 avant s-line in 2016. I managed to get it with £8k discount, and it was actually cheaper than the dealer sold second-hand car of the same spec and 1 year old. After 3 years, the car was worth £10k less than I paid. I still have the car, and at nearly 8 years old, it's worth about 11k, a drop of 21k. It drives perfectly, has 90k miles, and I plan to keep it for at least 5 more years. Fingers crossed, I have no major faults in this time.
Thanks for your analysis which has good insight.
Do you have any idea about manufacturer’s approved used car? It looks like a good choice for whom want a used car but lowest risk.
for the past 20 years of owning a family car we have almost always bought a fairly new used car from the dealer where the car is used by the dealer’s management. so far that had consistently presented us the best value and least risk.
That's the logic employed by so many originally looking to buy "new" - choose a demonstrator. You will have all the usual new car warranty advantages including importantly, free servicing, and not being hit so heavily with depreciation.
I'm a buy-to-own-and-use-forever kind of guy. I've learned in my 48 years of life that where you live plays an important role in your decision to go used or new.
I live in New Jersey. The roads here get salted every winter. Most roads in my area are riddled with potholes. We get a decent amount of rain and humidity throughout the year as well. Because of these factors, mechanics in NJ will tell you that this state is a known car killer due to rusting, brakes and tires.
Sure enough my new 2006 Hyundai Santa Fe literally fell apart after 17 years of ownership. I kept up on the oil and took care of it. Engine still worked great. No problems with the transmission. What happened was I went over a wooden bridge near my house that I drive over daily and my entire sub frame broke from the rust causing everything it supported to fall out.
Not only was the repairs too costly to bother with but a 17 year old car really isn't supported at most places with available parts on that kind of level. My Santa Fe only had 150,000 miles on it. Yeah..I know. That's all the use I got out of it. So owning forever isn't always a great option. It was also no fun driving with no A/C for two years, dealing with a short in the main radio/heater unit, randomly working power locks and all of the other faulty quirks of an older car that add's up to a lot of annoyances and unreliability.
So for me, as a New Jersey-ian, I bought brand new (for many many reasons I won't list here) but I plan on only keeping it for 10 to 12 years where then I will use it as a trade in towards my next new vehicle. 10 years, I am still covered by a warranty. It's a long enough term that I'd have had a few years of "free" driving with no car payments if I had financed it. And it's a good age to sell before it starts to turn into a lemon with repair costs while still retaining some resale value. You also will probably be able to avoid that super expensive 100,000 mile service when it hits.
Every year, splash the entire underside of the car with fluid film.
Go watch Eric from South Main Auto, who has to deal with his fair share of rust buckets, and what he reckon will help keep your car in the best condition possible.
Project Farm also did a comparison between different products for undercoating.
@@0bzen22 ty I'll have to check that out
There is however also how much value you place on car ownership, and the kudos factor. There is a psychological wellbeing ,feel good factor, self esteem, achievement sort of, to buy brand new. I think the buzz stays with you for a while, and that has a value. But still , yes you want to keep the car for a long time .
The only reason I have bought new cars is that I can customize them. Unfortunately on the 2nd hand market if you want some extras the only cars available with those are the higher/highest engine options making them more expensive than the new one (if you're not looking at cars with high mileage). People seem to like to spend more money on the engine than on the other things. Also paying monthly for a thing that loses value sounds very painful. When I was buying my first car I bought the best used car I could afford with the cash on hand.
Great video, something no one thinks of including me, but I’d never buy new 😨, never say never though 🤭
The LEAF is in a pretty unique situation at the moment though, it's just finished production at the end of March and Nissan are clearing through the stocks of finished ones at steep discounts. They haven't dropped the list-price, but both pre-reg and new-sales are both down around 50% of RRP at the moment.
It's another contributor to depreciation however, 2+ year old LEAFs have tanked even further with these clearance discounts.
And even before manufacturing halted for the last 3 years or so it's been pretty common to get 20-30% discounts on new factory orders for a LEAF, because it's just not competitive with other EVs at the RRP.
New car prices has gone up way too much. 11 years ago I bought a showroom C1 for 9k, now carwow quoted trade price for nearly 3k. On the other hand I bought a new VW with PCP and worked out I must have paid nearly 6k in interest for a 30k car over a 3 year period, no wonder everyone is broke, there are so many ways to trick you into paying way more than you have to. I will never do another PCP again.
I bought new this time purely down to the bad luck ive had with my last 3 second hand cars....ive basically lost ~£7k. Bought a Kia on a PCP with the full intention to pay it off when the PCP ends for peace of mind and low monthly payments due to my large deposit and dealer contribution. Always been anti new car and PCP, but this suits my situation. Fingers crossed it'll be a keeper for the next 10 years!
I never give up my new cars until I've had them more than 10 years..My last two cars I had them for 14 year's, I've probably bought my last combustion car, a late 2022 seat Leon with a massive discount of £6000.
There really is no need to pay list price on a new car - I’m looking to change my car now and looking around, can easily get between 10%-15% discount on the models I’m looking at. If I’m prepared to go with pre registered or a car with a few hundred miles on the clock (essentially new) I could get even more off. I tend to keep my cars for a long time so depreciation isn’t a problem for me, but I still look to get that initial price down as low as possible.
Funny that the Nissan leaf was mentioned since I'm getting a company car that's a Nissan leaf. I wonder if company cars go towards the quota you mentioned? If so my boss must have gotten a good deal on it and that's why I'm getting 😅
Yes, all cars sold goes towards the manufactures quotas.
"I bought a new car to save money on my mortgage" Brilliant!
I bought my car new in 2020. I didn’t want a new car specifically, but I wanted car that was a new model and, list price, it was actually cheaper to buy new. I’m now at the end of my PCP and have just paid the balloon.
The car is supposedly worth about £4,000 more than the balloon, so definitely better purchasing it from them and then either keeping it or putting it towards something else.
I think there’s risks in everything - cars very rarely make you money. I’ve had 4 years of hassle free motoring in a car I love and has everything I want. So to my mind, I’m a winner.
Oh, and when it came on the back of a truck, it had 1 mile on the clock 😂 best day
All very nice interesting points, I am contemplating buying my first car in the nearing future (not really needed to buy 1 until now in my early 30s) and very nice to see a quick points view of it.
Though I will admit my caveman brain keeps going "buy caterham 170" at me.... xD. I will have to tell my caveman side no, not a good idea!
I have bought all of my cars new, then run them until they're uneconomical to get through services/MoT. I've never really understood the whole 'two year change' thing that some do.
I spread the cost over those years & second hand value becomes unimportant to me. So far, I've had 2 x 14-years & am currently year 4 with my latest. About 14-years seems to be a sweet spot 😊
Some people like to enjoy different cars not drive same one half their life. If happy driving 14 year old car seems illogical to buy new as most of time you are driving older cars. Look at what Richard has owned, 'life too short to drive boring cars'..
Even if you're not an EV fan that pre-registered Nissa Leaf is a fantastic deal ...
Hey Richard, what navigation app do you use or recommend using in between Google maps, Waze and Apple Maps (say one had access to an iPhone)? I ask this specifically in the context of a new car, when using Android Auto or Apple CarPlay (again asking for a recommendation there too :) Thanks
LOL
"Bought a new car to save on my mortage."
That 0% interest rates on new cars thing is something I didn't know existed, a UK thing most likely...
I'm looking at 8.6% at a dealer and 5.75% with my bank :S
Central bank interest rates were low for a long time in virtually every 1st world country before the pandemic so it was really common to see 0% interest rates on purchases in most of the western world. Today in the UK interest rates on purchases of 6%+ are much more common and there is hardly any at 0% because the central bank rate is 5.25%. If I wanted to buy a Polo or Golf in the UK nowadays I'd be looking at 7%.
@@01chohan I know. but he specifically mentioned 0 rate for a new car and other values for 'used' ones, maybe I got it wrong. Let's see if they come down a bit more cause even the 5.75% is an absurd...
It's his 'man logic' brilliant 😂😂
I think people need to get their priorities straight. if you can afford the monthly car payment of ~£500 then go for it! but you gotta realsie mortgage payments are literally 1.5k minimum nowayds (live zone 4 london) then you add bills ontop of it you really gotta be earning alot to justify it
I recently got into a 2 year lease hire for a new vehicle worth ~£38k and my total outlay for the 2 years is just over £8k or £4k per year and they pay the road tax. I think that £8k is way under the depreciation cost for 2 years plus my lease allows me to do 12k miles per year .
Hello sir, I just watched your videos for driving manual car smoothly, I guess it can be applied to motorcycle driving as well, right?
But it depends, some.people can afford it. Like if your investments in equities on the Stock Market go up in value, and your able to multiply 💲💲, and receive a lump sum ,
A Maserati Levante is probably the worst new car when it comes to depreciation.
Levante GT Ultima in metallic black directly from Maserati - £93,055.
The exact same car with 10 miles on the clock - £79,000.
That's a £14,055 loss before you even leave the showroom.
Just wait around 2/3 years to halve the value again, and for someone else to have sorted out most problems!
Damn, a base Aygo is £16k? I remember when they used to be £8-£10k at most, that was brand new list price. The only cars I'd even consider buying brand new is a 911 or something similar that holds its value extremely well, otherwise used all the way for me.
I've just started working in a dealership first time at Toyota this month, I've heard from a customer a fact that the real reason cars depreciate so much in a short time is because of VAT which can't be claimed back, so a £32,000 @ 20% VAT is 6,400 depreciation, so not far off what Second hand is from a day or so old. So in reality your loosing VAT straight away
I always buy new cars.
My current one is an 12y old aygo that just goes.
The only real issue with it was the heater fan replacement.
Diy an €90 repair, in hours of work that would be €500 as it's quite some work to replace that #%* fan.
My first car is a vw polo blue gt 2017used under 2 months old