# Why buy new and not second hand?



## suds (20 Feb 2006)

I wondered if there were any good financial reasons for buying a new rather than second hand car. I know almost nothing about cars - and really care very little about them either - and don't understand why people spend so much money on them. I have a 1997 car - it's fine, takes me around, causes no problems, and does what it says on the tin. I thought though that I might replace it this year - heard that SSIAs should mean a glut of second hand cars on the market, and thought I'd take advantage of it. But why will people buy new? Do you save money? Someone told me that if you buy new, then trade-in every 2 years or so it's cost effective in the long term. Is it? Or is the bottom line just that people like shiny new cars and don't really care what it costs them?


----------



## DrMoriarty (20 Feb 2006)

IMHO, 'trading up' every now and again to one of those two-year-olds (at about 60% of the new price) makes far better financial sense.


----------



## Carpenter (20 Feb 2006)

I would have had your outlook regarding old vs. new cars but this year we bought a brand new car, for a number of reasons.

Prior to purchasing this year we had a succession of small cars (some very old, mostly reliable and costing us very little in terms of depreciation and running costs.  Having "economised" over the years we decided to "treat" ourselves to a new car, although we still went for a modest and practical choice.  We were looking for a safe family car and most of the newer models are very well kitted out in terms of air bags and score highly in EuroNCAP tests.  It is nice to have something from new and knowing that we've looked after the cars we've had to date I was happy to lose initially on big depreciation.  If we couldn't have afforded to go for a brand new car we would certainly have opted for a 05 model (and no older) with manufacturer's warranty.  Another factor was our lucky position of needing only one car, so as a "one car household" we opted to make it a good one, and I'm glad we did.  In the past we always found that unless you know the previous owner or history of the car you really don't know what you're buying, unless the car is only a year or two old.  The best car we ever bought was an '88 Ford fiesta, bought from my brother, previously owned by his friend and we drove it troublefree for a number of years and it only cost £500 at the time!


----------



## A.Partridge (20 Feb 2006)

Buy good secondhand - unless you are a complete freak about newness. The money you will save can go towards something else you need. The biggest cost associated with cars is depreciation - particularly with new cars.


----------



## Billo (20 Feb 2006)

I like to buy a new car from time to time.
Recently I bought a new corolla. It cost me 8.5k plus my 02 corolla.
I will probably hold on to the new car for another three or four years and then trade in for a new car again. I am happy to get the guarantee and avoid the NCT and other expenses associated with older cars.
Rgds
Billo


----------



## Lorz (20 Feb 2006)

I personally would never buy a brand new car - the minute your name goes on the VLC  it has cost you thousands!  I have always bought second hand and having being stung quite badly with my last purchase, I would recommend you buy from a reputable dealer who is in business a long time (therefore has built up a reputation and won't want it thrashed) and is also a member of SIMI.  If the garage is a member of SIMI they will get involved in any dispute you may have and try to resolve it ammicably.  Having resolved my problems with the shady dealer I went to, my car has now depreciated 50% in 2 years.  At the time I bought it, I had a lot of other financial commitments and decided for the first (and last time) to put the finance over 5 years!  Never again.  I now have lost the trade in value of my previous car and having suffered with the depreciation, I now probably owe more than the car is worth!  Crazy situation!  Lesson learnt!


----------



## weeslip (20 Feb 2006)

On a related not - would something like this make sense 
[broken link removed]

We are also a one car family, baby around the corner and looking for something big, solid, reliable and a bit nice to drive. The mondeo fits all of these and then some. Trade it up in two/three years.


----------



## mc-BigE (20 Feb 2006)

I bought a 2002 BMW 320d estate for €24,000 cash last month after haggling down from €25750, that car is over 40,000 new (newer model)

Dealers expect you to haggle! but some don’t always "play ball"

walk away if you don't get money off the asking price.

Might be harder to get money off more desirable cars.

Best of luck


----------



## Lorz (20 Feb 2006)

You're always going to get a deal if you're a cash buyer - ie no trade-in.  I'd expect close to 10% discount if I had no trade-in.

McBigE - well done - you def. got yourself a bargain!


----------



## Eurofan (20 Feb 2006)

Billo said:
			
		

> I like to buy a new car from time to time.
> Recently I bought a new corolla. It cost me 8.5k plus my 02 corolla.
> I will probably hold on to the new car for another three or four years and then trade in for a new car again. _*I am happy to get the guarantee and avoid the NCT and other expenses associated with older cars.*_


I thought this was a fascinating comment as it seems to exemplify the thinking behind frequent trading up (and by frequent i mean every 3 or 4 years).

I've a friend who religiously trades up every 3 years "before she loses too much on depreciation". 

The maths simply don't work but imho i think people just like the new plate on the driveway.

Cars these days that are *well maintained* go forever. There certainly aren't any significant "expenses associated with older cars" that come even remotely close to what you are guaranteed to lose on depreciation with a newer car.


----------



## CCOVICH (20 Feb 2006)

Cars don't make financial sense IMHO.

I say this as someone part of a 2 car household and I'm not anti-car (I drive an Alfa-definitely for the 'car lover'!)

But if I had quite a bit of excess capacity, I might go for a new car, but maybe if I was one of the first to have it (yes, I am that shallow!), otherwise I wouldn't bother.


----------



## Billo (20 Feb 2006)

"There certainly aren't any significant "expenses associated with older cars" that come even remotely close to what you are guaranteed to lose on depreciation with a newer car."

Eurofan  I disagree.
I have had old cars in the past and things like cylinder head gaskets, clutches, shocks, starting motors, petrol pump are some of the things which I had to suffer through. Maybe I was unlucky.
Depreciation is heavy on a new car in the first year or two but it levels out as time goes on. As i said above I traded in a four year old car  for €8.5k. I thought that was a fairly good deal. Anyway as I see it money is not everything and reliability and guarantee must count for something. It does to me anyway.
Rgds
Billo


----------



## Winnie (20 Feb 2006)

I think that people go for new car for 2 reasons
1) Snobbery
2) So they won't have any problems fixing car

The snobbery call I don't have much time for - most people trying to keep up with the Jones's
As regards reliability - I think a 3/4 yr old car that is properly checked out prior to buying it is unlikely to cause problems

As for the point you mentioned about it being economical to trade up every 3 years ....... it depends on how you define economical!!  The deprec on new cars is mental.

I spent €2k on a car.....have had it for 2 years & I plan to keep it for another 2 years!  so that is a net cost of €500 p.a!


----------



## Corolla97 (20 Feb 2006)

Bought a new Corolla (92 - 97 type) in 1997. Paid 11,000 punts for it (scrappage scheme ). Have 212k miles on it now with no problems so far. Last April before I went to the US on a holiday I took a test drive in an Almera automatic to get a "feel" for driving an automatic. The dealer offered me 100 Euro on my Corolla as a trade in against the Almera. Needless to say I didn't trade.
So maybe buying new and holding on to the car for a long time is a good way to extract value from it.


----------



## chihiro (20 Feb 2006)

my car is 14 years old and still going
92 peugeot 106, bless her;-)


----------



## Carpenter (20 Feb 2006)

I think Billo's comments regarding reliability and a manufacturer's warranty are big factors in motivating many people to opt for a brand new car.  A warranty should things go wrong is why many people opt to buy even a second hand car from a dealer as opposed to a private seller.  Obviously some people will be motivated to have "the new plates on the driveway" but what's new about that?  Obviously a new car is more likely to give troublefree service and this is a big factor for some motorists.  Older cars can be reliable and represent good value for money but even the best maintained car will be subject to wear and tear, particularly as the years roll on.  This kind of "age related" wear and tear can be expensive as parts are expensive, difficult to source etc.  I would regard a new car purchase in the same way I'd look at any other type of consumer choice.  When I stay in hotels I'm happy to stay in mid level or budget accommodation, more people are happy to splash out extra for the 5 star room with a view, egyptian cotton sheets etc.  You can't take the money with you but if it makes you happy (and you can afford it) why not buy the new car etc?  I also know that I could probably halve my monthly grocery spend by eating cheaper food and sticking to a less varied diet (and still stay healthy) but I like fresh fish, buy good cuts of meat and eat lots of fresh fruit and veg and I don't want to economise on this area- especially when I don't have to.  Likewise with a car purchase, I think.


----------



## Eurofan (20 Feb 2006)

Corolla97 said:
			
		

> So maybe buying new and holding on to the car for a long time is a good way to extract value from it.


Absolutely superb. Kudos to you my friend you've done the only better thing than buying second hand.

Buying new and keeping for a good 10 years or so is the ideal way, of course in todays fickle world there's few and far between (and i include myself in that) with the ability to do so.

My better halfs mother has a '97 golf from new thats never given a days trouble. Regular on-time maintanance and no problems whatsoever.

I'm just after buying a 2000 Bmw 323i for twelve grand, thats astonishing depreciation of over seven grand a year _just to own it_ and an awful lot of car for the money.

I'd much much rather own and enjoy that quality level of car than buy a new corsa/micra etc. But hey thats me and my money people spend on whatever they choose.


----------



## DOBBER22 (21 Feb 2006)

I see Hyundai are now offering a 5 year warranty on their cars this must surely be a big plus to buying one of their new models, you could hold onto it for 4 years and still sell it with 1 year warranty left!
Toyota seem to think that Hyundai are now their main rivals when it comes to reliability and value for money.
Maybe other manufacturers may be thinking along the lines of Hyundai by bringing out 5 year warranties....watch this space 

http://www.hyundai.co.uk/fiveYearWarranty/

[broken link removed]


----------



## YouNeek (21 Feb 2006)

Eurofan said:
			
		

> I'm just after buying a 2000 Bmw 323i for twelve grand, thats astonishing depreciation of over seven grand a year _just to own it_ and an awful lot of car for the money.


 
Eurofan - you didn't buy that one that was on boards for the past few months, by any chance?


http://www.boards.ie/vbulletin/showthread.php?t=2054854040


----------



## suds (21 Feb 2006)

Thanks all for replies. Reading through these, reliability seems the main reason to buy new - not a good enough reason for me, I think, as my '97 gives no trouble at all, and the previous car (which I had for nearly a decade) was the same. Other than that, as Carpenter says, it seems to be just a consumer choice issue. If you like cars, and can afford it,  it's worth it to you to spend the money on a new one, even if it's not cost effective.  Lots of people seem to feel this way - actually I often think people have some sort of car fetish,  they seem to love them so much. They're just coloured hunks of metal on wheels to me, so I think I'll keep my money for things I enjoy more than my car. Each to their own. Thanks again for everybody's opinion.


----------



## ZEGAR (21 Feb 2006)

Winnie said:
			
		

> I think that people go for new car for 2 reasons
> 1) Snobbery
> 2) So they won't have any problems fixing car
> 
> ...


----------



## mc-BigE (21 Feb 2006)

Lorz said:
			
		

> You're always going to get a deal if you're a cash buyer - i.e. no trade-in. I'd expect close to 10% discount if I had no trade-in.





			
				Lorz said:
			
		

> Very true Lorz, but I found big differences in how much you can get off, depending on what part of the country your in.
> 
> For example: I was looking for either a BMW 320d estate or Audi a4 tdi estate about the 2001 / 2003 age
> I’m in Cork, so I tried my local Dealers, who didn't want to know when I started haggling hard.
> ...


----------



## Winnie (21 Feb 2006)

ZEGAR said:
			
		

> Winnie said:
> 
> 
> 
> ...


----------



## CCOVICH (21 Feb 2006)

Let's keep this on topic, i.e. good reasons to buy new.  We are heading into LoS territory here.


----------



## icantbelieve (21 Feb 2006)

Another thing to remember about buying newish is that its sometimes the only way to get rid (via trade-in) of an car that won't sell privately. Some cars once they get to a certain age just can't be sold for anything other than giveaway prices. So what you save not buying new can be lost if you can't sell it when the time comes. That's one of the reasons why people buy new and trade up every few years. 
I was selling last year and despite the fact that dealers were selling my car for €18-20k the private sale price for my car was around €15k. I discovered this because before I tried to sell privately I rang a few people selling the same car as mine with the same spec and pressed them for a realistic price. In the end I bought nearly new and got a trade in of €14,700. Having checked the market I think I actually came out well ahead as if I'd tried to sell privately I'd have had to service the car as there was one due (€500-700), change the tyres (€200), valet it (€100), advertise it for at least a week (€100 per week), thrown in a tank of petrol (€70) and been available to sell it (what price my time and hassle of tyre kickers). The nearly new option I went for was already at a great discount (I thought it was a reprint) because it was around September-October when fleet cars come back to the garages. Plus there was a special offer on of 5 years servicing included. I'll only ever buy returned fleet cars from now on.


----------



## ribena (21 Feb 2006)

I have bought 4 new cars in my short(ish) life and am presently awaiting the arrival of my 5th new car.  I like to buy a new car.  It has absolutely nothing to do with snobbery or prestige or social climbing, I just like to have a new trouble free set of wheels to drive.  I changed two of my cars after 2 years and then moved on to another model which I really liked so I held on to those cars for three years each!  I need my car for driving to work as well as for weekends away and I probably spend as much quality time in at as I do in my home!  I find each time I change my car that there are new gadgets / devices / gimmicks all of which I love to get.  I have 4 bald tyres at the moment, I'm 2,000 miles overdue a service, have something or other gone in the back of the car that needs to be replaced, have hopeless wipers not to mention all the bumps and scrapes my poor old Bess has recieved!  I'm only delighted to get a whole new car with hopefully 3 to 4 years of hassle free happy driving.


----------



## Billo (21 Feb 2006)

Fair play to you (Miss)Ribena. You tell them.
Rgds
Billo


----------



## brian.mobile (21 Feb 2006)

My car is as important as my home.m I want it to GET me home.

It has to have a four essential requirements:

1) to start
2) to stop in a flash
3) to accelerate me out of 'bad' judgements on our poor famine age roads
4) match my sunglasses

BM


----------



## Eurofan (21 Feb 2006)

YouNeek said:
			
		

> Eurofan - you didn't buy that one that was on boards for the past few months, by any chance?


Yup sure did, poor spec (ie no leather, heated seats etc) compared to my old car but drives wonderfully. Full service and pre-nct today with flying colours.

Big engine cars in particular depreciate to an extordinary degree since few people are prepared to pay the extra running costs. Tbh though bar the higher tax i've found the insurance to be of a negligable differance (but then i'm 30 with full ncb) and running costs are just fine.


----------



## RS2K (22 Feb 2006)

Don't forget that up to date cars as much safer in the event of an accident.


----------



## Eurofan (22 Feb 2006)

RS2K said:
			
		

> Don't forget that up to date cars as much safer in the event of an accident.



Very sweeping statement that would you care to elaborate?

Imho it varys wildly from model to model i'd prefer to rely on NCAP results and my own research that "newer=safer".


----------



## ribena (22 Feb 2006)

Another plus side for buying a new car, most cars come with two or three year Roadside Assistance for free and most have a two or three year Warranty if anything goes wrong with the car.  

I can't wait for the day they invent a car with two little hands coming out of the sunvisor mirror and a flexible pull out mirror in to the bargain to assist ladies applying their make-up on their way to work!


----------



## RS2K (22 Feb 2006)

Eurofan said:
			
		

> Very sweeping statement that would you care to elaborate?



Agreed but improvements such as abs, multiple airbags, active seatbelts, anti submarine seats all make crashing in an up to date car much more survivable.


----------



## DrMoriarty (22 Feb 2006)

RS2K said:
			
		

> Agreed but improvements such as abs, multiple airbags, active seatbelts, anti submarine seats all make crashing in an up to date car much more survivable.


Never thought I'd hear an old RS2000 driver coming out with a line like that..!


----------



## practitioner (22 Feb 2006)

There is nothing sweeter than the smell of a new car.You don't need to go looking at cigarette lighters to see if someone has been a smoker despite the dealer trying to convince you black and white the other is true.Sure they depreciate a lot but if one works and saves and is prepared to cut back elsewhere, why not spend the money.Spend some, save some.


----------



## RS2K (22 Feb 2006)

DrMoriarty said:
			
		

> Never thought I'd hear an old RS2000 driver coming out with a line like that..!



New cars for everyday use. Old car purely for fun.


----------



## Cabaiste (28 Feb 2008)

Sorry for dragging up an old topic but its one I'm interested in at the moment as I'm currently looking to change my car and am having trouble deciding on new vs second hand.

From what I see, its very hard to find any value in second hand cars from main dealers and thats what is making me consider buying new.

I don't agree with the assertion that as soon as you drive the car out of the garage it has cost you a couple of thousand in depreciation. This is unrealised depreciation and is only a cost if you were to sell the car there and then!


----------



## Importer (28 Feb 2008)

I have made up my mind on this debate years ago....................

If you are a rep or similar doing 35000 miles per year, then go ahead and buy a new car. Over three years and a whopping 105,000 miles you are protected by a guarantee.By in large you can expect reasonably trouble free motoring. At the end of the three years you trade it in, the salesman raises his eyebrows when he looks at the mileometer and you receive 40% of what you originally paid. You have travelled 105,000 miles and its cost you 60% in depreciation. On a 30000 euro car this amounts to 17 cents per mile for depreciation.

On the other hand if you do 8000 to 10000 miles per year it makes no financial sense whatsoever to buy a new car. The car is depreciating outside your house / your office and you are not getting value for it
You sell it after three years and 29000 miles and the twinkly eyed salesman will offer you 50% of what you paid for it. This amounts to 51 cents per mile on a 30000 euro car. For this type of driver a return trip from Dublin to Cork is costing them 163 euro on depreciation.

If you drive a lot, Buy a new car you will get value from it
If you dont drive a lot dont waste your money on a new car

Good luck


----------



## Graham_07 (28 Feb 2008)

Importer said:


> If you drive a lot, Buy a new car you will get value from it
> If you dont drive a lot dont waste your money on a new car


 
I've been in the "will I change" "won't I change" mood for a few weeks with mood swings to match those from prozac to valium. Thank heavens for a simple answer that I can relate to.

( going to polish up the auld motor, gonna be around for a while yet. )


----------



## Cabaiste (28 Feb 2008)

Importer said:


> If you drive a lot, Buy a new car you will get value from it
> If you dont drive a lot dont waste your money on a new car
> 
> Good luck


 

Where do you reckon 20-22k pa fits; new car or no new car?


----------



## Carpenter (28 Feb 2008)

Importer said:


> If you drive a lot, Buy a new car you will get value from it
> If you dont drive a lot dont waste your money on a new car


 
Excellent summary!  I'm on the lookout for a second car at the moment and it won't be a new one....


----------



## MandaC (28 Feb 2008)

Decided to change my 04 Peugeot 307  this week as it seemed to be using a lot of fuel.  NCT due in September as well, and a it just did not seem to be driving great.

Have had three brand new cars (and a couple of junkers before that) and don t think I will be bothered buying brand new again.

A couple of years back, I was interested in cars, but now I want to just get from A to B.  So, despite my family thinking this is the best joke ever, I bought an 07 1 LitreYaris!  

Only have it since Tuesday, but love it to bits.  Its fun to drive, easy to park, really economical to run, plus a very low depreciation rate. Also due €80 back off the insurance, so happy days.

Definitely think nearly new is the way to go.


----------

