Depreciation on new vehicles a joke!

Motor vehicles were NEVER an investment - they alaways go down in value - some more than others. I think the issue centres around what you are prepared to pay in repairs etc.

Hi Axle,

Not much you can do, other than dont buy the car.

Unfortunately, it is a matter of supply & demand, and there ain't a big demand for 2nd hand vehicles

Hi
Record new car sales= record used cars on the market, The old supply and demand...buy a 1 to 3 YO car and laugh at the poor mug who dropped 50% of his cash...you will drop maybe 25% over the next 5 years.

Cheers
stefan

Never experienced a 'new vehicle' ; what is it? LOL
Going along with your reasoning, why do some people buy new and upgrade every few years? More money than sense? I'm sure someone out there will enlighten me, but the only benefit seems to be owning a vehicle in warranty. That seems a high price to pay if you never need any warranty claims.

Doing research and buying a 'near new' vehicle saves thousands of dollars. Plus you may get accessories included which don't seem to add to the value of the vehicle.

recently bought this cruiser(rigs photo)
full service history, few accessories, still got 20kms/2 years factory warranty ex Qld gov, done a few k's in a short time(NOT stop/starting) for about %60 new value WHY would you buy new !

I have only ever bought 1 new car and it is now 4 years old and going well.
I also am of the opinion that the hard earned money is too valuable to throw away thousands driving out the showroom door. Not to mention the unbelievable stamp duty on a new car. I realise there is S/D on used as well, but not as much.
I drive a 20 Y/O turbo Sahara and have no intention of upgrading.
All the new vehicles have too many gizmos for me.
But by not buying new, you don't get all the new safety features, and I would like to have a few of the new safety features.
What price for safety?
I know we are all some of the most highly skilled drivers around, but it's the other ones out there are a bit of a worry sometimes.
Dave

Hi Axle,

To throw an example into the mix, if you have a vehicle that you can claim through your business - ie tax deductable, then the only thing to consider is how much is the vehicle going to cost you each year in lease costs & maintenance.

Of course this is assuming you do not have the ability to pay cash for the vehicle.

Example 1 - New Patrol Purchase - assume $50,000 and travelling 30,000km per year

- Lease payments of $750 per month, or $9,000 per year
- Maintenance - only servicing costs of approx $700 per year
- After 4 years driving, total financial outlay is approx $39,000
- Sell the car at 4 years, get $25K - $28K trade in value, pay out lease approx$15K, so $10K cash left over.
- Therefore, true cost over 4 years is $29K, or say $7.5K per year.

Example 2 - Buy 4 year old Patrol, 120K on clock for $30,000 through dealer

- Hard to find company to carry out lease, as they say car too old.
- Finance company that will lease charge higher interest rate on vehicle, similar to personal loan rates
- Repayments on lease / loan $650 per month or $7,800 per year
- Higher maintenance costs as replacement parts are to be considered.
- Maintenance costs approx $1,500 - $2000 per year
- Sell car at 8 years for value of $15,000
- True cost over 4 years is $36 - $39K, less sale price of $15K
- Therefore true cost is between $21K - $28K depending on maintenance costs.

So you can see, the numbers are not much different, so why not go for a new car as it is tax deductable

Of course if you can pay cash for 2nd hand car, then much bigger savings using both cars, but outcome is similar.

My thoughts anyway.

TonyG

I agree..
I'd never buy another new car and enjoy the feeling of dropping 50% in 3 yrs.

but remember, cars are only designed to last 3-5 yrs now, thats what the "normal" turnover for the rich and stupid is...

I like the bloke that bought the Lexus 4b, and went to trade it in, in the mean time, sales of them were extinct, so Yota dropped the price of them.. You dont need me to tell u what he was offered for a trade in...

you are quite right .. only the stupid drive a private vehicle .. the others are rich ..
thats how I understand the rich and the stupid or was it meant differently ???
Well some merry(or not) a virgin ... some don't .. money speaks .. rofl
have fun
gmd

Of course it's never really worth the price of a new car but don't be fooled into thinking the 2nd hand ones are any cheaper when in fact the running costs will make them conciderably dearer to run. New cars come with new batteries, new tyres & new windscreens, then also come with with a warrenty that will limit the maintenance you'll need to spend on it. Occationally one may buy a perfect vehicle 2nd hand but for the majority it's a lottery whether it will be a lemon or not. My first thought when buying a 2nd hand car is why did they get rid of it, whats wrong with it? There is often a good reason. I know if it was my 4x4 you were buying 2nd hand all polished up you would be looking at a life time of expensive maintenance :-))
For me reliability is #1 so new or as new cars suit my needs. I could think of nothing worse than spending my time fixing up an older car when I could be up the bush driving. All too often I see people not spend quite enough on their purchase only to spend heaps over the following years as the damn thing broke down.
That said the gap between old & new does seem to be growing making it harder to trade up this time.
Probably a good example is my current dud car(105 series). I've blown 3 front diffs all covered under warrenty. If I had bought it 2nd hand the repair bills could have topped $7000+! Add that together with a new set of tyres, a windscreen & a major service then all of a sudden the gap between an old & new car is not quite as big as it may seem:-)
Cheers Craig.....................

The car with the biggest depreciation is apparently the Range Rover HSE 4.6 .

New price around 140K . 2 yr old around 60K.

My mate just bought an 03 Merc with 30km that was new at 57K for 33K .

If you were after a luxury vehicle there is no way you would buy new , they dont even change body shapes like Holdens or Fords every year .

Glenn.