Are these figures correct in connection with getting new car/keeping old one?

S

Slim

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Hi all, I'm pondering changing the car and I have come up with 3 scenarios in an attempt to make a decision based on cost:

1. Hold on to existing car - Value €11,000
Cost of extra road tax over 5 years € 500
Cost of maint/repairs(not reg. service) est. € 2,000
Value in 5 years est at € 2,000
Total Cost over 5 years €11,500(incl. depreciation)

2. Buy 141 car Value €25,500
Cost to change €14,500
Value in 5 years €11,000
Total cost over 5 years €29,000

3. Buy 151 car Value €29,500
Cost to change €18,500
Value in 5 years €15,000
Total cost over 5 years €33,000

If these figures are correct, and some are estimates, then the most economic option is No. 1. what do you think?

TRied to line up figures but couldn't!
 
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Delboy said:
Whats the 'cost to change' about?
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How much he has to stump up after the trade in.


Are you sure you will get €11,000 as a trade in? The dealer has his margin to take into consideration when giving you a value.

Are you borrowing to buy a new car?
What about maintenance and repairs of new cars? They break down too.

Without doing the maths, if you think it will cost you €2k a year to keep your car on the road, I'd look at changing. I paid just over €2k to my mechanic this year and it needed a major part replaced. If I had to pay that ever year, I'd get rid of it.


Steven
www.bluewaterfp.ie
 
Sorry it's not clear. The €2,000 for maintenance/repair is over the 5 years, just in case injectors go (it's diesel). I am being allowed €11k on trade in. I am disregarding normal servicing and maintenance costs such as tyres as they will arise on any car. The options in 2&3 have warranties for 6&7 years respectively(Kia).

My annual mileage has dropped significantly but still doing about 20-25,000 km.

I was just astounded at the cost over 5 years of lowering my backside into a newer car!! Hoping I'm overestimating the cost so I can do just that!!
 
Its late on a Friday evening but as far as I can see, this is not correct.

You're double counting the "cost to change" and depreciation cost in scenarios 2. and 3.

The total cost in both 2 and 3 is 14,500 over five years if you ignore financing charges. If
you include the cost of borrowed money, then the total cost for 2 and 3 is higher
 
Let's take scenario 2. I put €14,500 with my trade in and start 2015 with a car worth 25,500. Over the next 5yrs, it depreciates by 14,500k, so my total cost is 29,500. Not only have I shelled out 14,500 but my purchase is worth 14,500 less, no? I suspect this is why car purchasing is described as a mug's game!
 
Take scenario 2
Say you take 14.5 from your savings,and add it to the trade in to buy the car.
In 5 years you sell it for 11,which you put back in the bank .
So,your bank is 3.5k down,but you have also lost your current cars value of 11,so you are down 14.5
Similarly,with scenario 3,you would also be down 14.5 k,so about 3k over 5 years for a brand new car!
And your estimate of 2 grand over 5 years in extra maintenance for a car with high mileage already sounds optimistic.
 
For instance,clutch and dmf over a grand,dpf a grand,injectors 400 each .
Then there's starter motor,timing belt,alternator.......
 
What are 'dmf' and 'pdf'?

I can't get my head around this! If I add 14.5k to my 11k, that's 25.5k, which I reckon will be worth 11k in 5 yrs, that's a cost/net loss of 14.5k!! Ah!.... As Dr. Debt pointed out, I was double counting the cost/depreciation!!

So, which one to buy? Same car, difference of 1 year. 1 yr old or new!
 
I'd go for the new one if the higher repayment were doable. One point to consider is where in the model cycle is the new car?If it is due for replacement soon,your shiny new car is suddenly less desirable .
 
Just a point as id previous 2 kias, sturdy car etc but your resale value after 5 years could be way lower which is why we changed to a different manufacturer....we found some dealerships didnt even want to take them as a trade n give outrageous quotes to put us off, we were stuck trading in at a kia dealership..

also inlaws just got three new kias n watch the spec on them as standard things not always included...60plus woman driver had her brand new kia n no electric windows, now finding car not suiting her...my own kia sold as having central locking, turns out didnt, finally kia got it retro fitted but wasnt same at all...

we changed car yearly n have only bought new once...perhaps if you holding onto car for good few years better chance of not losing money...
 
Slim said:
I can't get my head around this! If I add 14.5k to my 11k, that's 25.5k, which I reckon will be worth 11k in 5 yrs, that's a cost/net loss of 14.5k!! Ah!!
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If you do nothing (option 1) then after 5 years you will have (relative to option 2) €14500 minus the €2500 extra the car will cost to maintain so €12000 cash and a car worth €2000; net position €14000. Option 2 is €0 cash and car worth €11000; net €11000. So option 1 is cheaper by €3000

Option 1 (relative to option 3) you would have €18500 minus the €2500 extra the car will cost to maintain so €16000 cash and a car worth €2000; net position +€18000. Option 3 is €0 cash and car worth €15000; net €15000. So option 1 is cheaper by €3000

So if your figures are correct (and they may be optimistic)there is no net cost difference between options 2 & 3 (which puts your figures in doubt). So €50/month is the extra cost to have a new/er car for the 5 years.
 
michaelm said:
So if your figures are correct (and they may be optimistic)there is no net cost difference between options 2 & 3 (which puts your figures in doubt). So €50/month is the extra cost to have a new/er car for the 5 years.
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Yeah, the figures are estimates. The reason scenarios 2&3 have same outturn is higher cost to change but higher residual value. Net result the same and, with scenario 3, I can choose colour, spec is higher and more appealing to me.
 
Sandals said:
Just a point as id previous 2 kias, sturdy car etc but your resale value after 5 years could be way lower which is why we changed to a different manufacturer....we found some dealerships didnt even want to take them as a trade n give outrageous quotes to put us off, we were stuck trading in at a kia dealership..y...
Click to expand...
True. I have no illusion on dealer generosity. I should probably buy a VW Golf.
 
Shouldn't you give us the age and mileage of the car you currently have. It could be very important.
 
Hi Bronte, I don't really want to set out that much detail. I was miscalculating the cost over 5 years. Some of my numbers may well be out but I have to take a shot at it.

I have made the call and am on the cusp of ordering a new car for January! I know I'm a mug but I can rationalise it by imagining all sorts of hideous repairs to the existing motor!
 
Hah! Yeah but it seems they are flogging loads at the moment! Thanks all for the help.
 
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