Why buy new ?

Submitted: Thursday, Nov 27, 2003 at 13:40
ThreadID: 8792 Views:1949 Replies:7 FollowUps:9
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Hi all,
Over the years i have bought new and second hand and it is a great feeling picking up that new car.These days a decent 4x4 will set you back around $50,000 then govt charges etc and then what accessories you want.After setting it up to do the driving you will do ,this new car would need to be around for say ten years coz after two years depreciation will have wiped in some cases $15,000-$20,000 from the purchase price.What is causing the high rate of depreciation?.Is it that low interest rates are making buying new more affordable thus creating a surplus of used vehicles and to sell them the price must drop.Have been checking the used market and believe that it is a buyers market for second hand with 2000 models for example with extra's going for around 60% of new .Might be a while before i buy new again.The new car market is still strong though despite a loan of four years plus interest would leave you with a vehicle worth less than half of what you have just paid off.Any thoughts mark
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Reply By: Truckster (Vic) - Thursday, Nov 27, 2003 at 14:30

Thursday, Nov 27, 2003 at 14:30
I agree.

Mick on here picked up a 4.2 GU at Auctions Ex RTA for $33k...

Why would anyone buy a new car ever again! To lose $20-30k in 3-4 yrs?
AnswerID: 38671

Reply By: Mark - Thursday, Nov 27, 2003 at 14:31

Thursday, Nov 27, 2003 at 14:31
On the face of it, you are right for a "private" buyer. However, look at the generous fleet discount of ~$7,000 for say a Patrol plus tax breaks for using it for some work purposes. A higher initial cost results in a higher tax deduction. After say 3 years, the $50K (list price) vehicle is now worth say $35K.

Factor in the fleet discount and the $3,000 per annunm tax refund and the actual cost is $50K - (3x$3K + $7K) = $34K

(Note that there have been some simplification of costs, but end result is similair - GST is paid on payout figure, not purchase price etc...)

So, apart from running and maintenance costs, the vehicle has cost nothing!!! (interest cost not included). This is why business's and govts all use new vehicles. The interest does cost $$$, but I personally do not mind paying that as the "cost" of a new vehicle vs a 2nd hand one. Also, there are no repair costs (still under warranty) unlike a vehicle 5 or so years old - basically pays the interest.

The poor old private buyer gets slugged both ways, no fleet discount and no tax break. And thats why the private buyer typically goes the 2nd hand route. It also supplies a ready market for the 3 year old fleet market that needs to be turned over.

I hope this helps explain the vehicle cycle to some degree.

Cheers

Mark

AnswerID: 38673

Follow Up By: marcus - Thursday, Nov 27, 2003 at 15:57

Thursday, Nov 27, 2003 at 15:57
There are some exceptions like if i was a farmer who wanted a patrol coil cab and was entitled to a primary producers tax exemption then claimed all running costs.By the time i sold it at market value and claimed the depreciation the losses would be minimal.
Anybody got a hobby farm going cheap?
mark
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FollowupID: 28656

Follow Up By: Member - JohnR - Saturday, Nov 29, 2003 at 20:37

Saturday, Nov 29, 2003 at 20:37
Not that I saw red when I saw Marcus comment but just remind anyone that if there is a significent reason to be able to claim the GST component and depreciation as a business, it is not farmers but any business that can claim it.

There is no need to try to perpetuate the misinformation here as farmers get no tax breaks better than another.

I hope people get caught on the hobby farm tax if a non earner trying to rort the system.
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FollowupID: 82746

Reply By: Member - Peter [SA] - Thursday, Nov 27, 2003 at 14:45

Thursday, Nov 27, 2003 at 14:45
The reason i chose to buy new was I KNOW my vehicle hasnt been thrashed by the previous owner, I KNOW it hasnt been thrashed as a Demo car, I KNOW who has worked on my vehicle, basically it gives me total piece of mind knowing exactly the condition the vehicle is in, I am also planning on keeping it for 10yrs minimum.
AnswerID: 38676

Follow Up By: joc45 - Thursday, Nov 27, 2003 at 16:14

Thursday, Nov 27, 2003 at 16:14
Not necessarily! I wanted to take a GU 4.2TD for a test drive shortly after they came out in '99. The Nissan salesman wandered into the yard, hooked a "dealer" plate onto a brand spanking new GU, and said let's go. Up Greenmount Hill, he said floor it! Rev it out! This was a vehicle with less than 20km on the clock. A few days later, and probably a few more test drives, it would have been sold as a new vehicle, not a demo. Hmmmm....
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Follow Up By: Truckster (Vic) - Thursday, Nov 27, 2003 at 22:18

Thursday, Nov 27, 2003 at 22:18
Joc hit it on the head...

And remembering Pre-delivery ?? Also remember its loaded onto trucks to be delivered to car yard.. Taken to get accessories fitted etc..

Yea fair enough thats only going to be a total of 50-100klms, but yea the most important of the lot....

Then there is the winding back of the clock, and of course that never happens..

But is all that worth $20,000 to know?
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Reply By: flappan - Thursday, Nov 27, 2003 at 15:06

Thursday, Nov 27, 2003 at 15:06
Was easy for me.

I bought a 5yo Patrol at just under half its original cost.
AnswerID: 38682

Reply By: ptcrowe - Thursday, Nov 27, 2003 at 18:52

Thursday, Nov 27, 2003 at 18:52
I wouldn't buy a new one. I hunt around a few forums and notice that there are always people complaining that their new truck has been in the shop eleventyninehundred times this year to have the glitches fixed. Wait a couple of years till some other poor sap has done most of the fiddly crap first then pick it up cheaper. Just my two bobs worth.
AnswerID: 38706

Reply By: Phil G - Thursday, Nov 27, 2003 at 19:32

Thursday, Nov 27, 2003 at 19:32
I got sick of maintaining my previous Cruiser. Would have had to spend a lot of money on new seats, LR tank, gearbox repair, tyres, swivel housing service etc etc

Bought the new Prado diesel instead, and do my own maintenance. I've spent nothing but the cost of oils and filters; and I have done some remote desert trips with confidence of knowing the vehicle's in top condition.

I bought the vehicle new because it was the same price as near-new.
AnswerID: 38712

Reply By: Willem - Thursday, Nov 27, 2003 at 21:25

Thursday, Nov 27, 2003 at 21:25
I go everywhere with confidence in my 25yo truck. I go everywhere the $60,000 4bys go. My truck cost $2900 5 years ago and I have done 105,000km with it. Along the way I have rebuilt the engine and fitted some new goodies to the tune of $4500. So all up, for a $7400 price tag I have a reliable vehicle albeit not so flash with all mod cons. The thing is to get out there safely and to return safely and my truck does that. So.........

Cheers,
Willem

Always going somewhere
AnswerID: 38729

Follow Up By: Truckster (Vic) - Thursday, Nov 27, 2003 at 22:19

Thursday, Nov 27, 2003 at 22:19
LOL..

Well put! Gee, $7400... how much would you get for it with trailer if you sold as a complete going matching unit???
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Follow Up By: Willem - Thursday, Nov 27, 2003 at 22:39

Thursday, Nov 27, 2003 at 22:39
Hello Truckster,

The trailer cost me $800 and then I fitted a Treg coupling and an extra spare tyre and rim. And musn't forget the paint job. So say $1100. The whole rig costing $8500.

Won't get much if I traded it in though. There is no great demand for ancient technology. Parts are hard to come by(have to look a bit harder) but they are out there. Would be busting to get $4000 for the rig. Most buyers are not keen on a 5 metre paint job. (painted by hand but 5 metres away it looks good!!!). $2500 is more realistic.

After all the info I have collected on this forum about 'newer' vehicles, I think I am going to keep this one and just plod along and see the sights. In 5 years time it will be a Classic Car and maybe worth something.

Cheers,

Willem

Always going somewhere
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FollowupID: 28700

Follow Up By: Truckster (Vic) - Saturday, Nov 29, 2003 at 10:25

Saturday, Nov 29, 2003 at 10:25
$8500 Thats cheap for the fun youve had with it!!!

You could have had the same fun in a $80k Cruiser eh... but then you would be living on the street..

$70k could buy a lot of accessories for the G60....
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FollowupID: 82716

Follow Up By: Willem - Saturday, Nov 29, 2003 at 17:05

Saturday, Nov 29, 2003 at 17:05
$70k could buy a lot of accessories for the G60....

Yeah, like gold plated wheel rims :-)))))) I have a very eccentric mate (a lot more eccentric than me) who slotted a Pontiac 6.2lt V8 diesel into his G60 but had endless trouble with the heads. Then he turfed the body and hung a Nissan Urvan body over the lot. All this was done in WA and took 15 months to get the engineers certificates and pass rego inspection. Then he got jack of the idea and flogged the thing for $11,000. He never admitted to the cost of the project.

As I am now on a pension anything over $10,000 is beyond my reach. I will just have to put up with the old technology. Maybe if I sell the Valiant???.............but the hard part is putting an ad in the Trading Post.

Cheers,
Willem

Always going somewhere
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FollowupID: 82736

Follow Up By: Truckster (Vic) - Saturday, Nov 29, 2003 at 19:12

Saturday, Nov 29, 2003 at 19:12
Gold plated?? I'D BE AFTER SOLID GOLD!!!!!

Keep the Valiant, shame to see it go, and wouldnt get enough for it to make it worth selling...

Whats the details on the Val again?? Hmmm *thinking of nutha car* ;)
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FollowupID: 82743

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