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Best value to age ratio for second hand car? Minimizing depreciation loss

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Found 17th Jan 2014
In terms of buying a car, it loses about 30% from brand new once its sold, then 50% by the 1st/2nd year and 60% by the 3rd year, at which point is it generally best to buy a used car so it holds its greatest value?
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I've always though the third year
But you buy it at 20%discount so the first year loss is much less.
The depreciation is roughly 20% a year based on the value at the start of the period so that after 10 years car is worth about 10% of what you paid originally for it. Older cars have higher maintenance costs and higher road tax which cancels out some of the saving but on the other hand you might not bother to fix minor dents and scrapes. Maybe get a low mileage car to try and avoid major repair bills.


Edited by: "sreddar" 17th Jan 2014
Without looking into it - I'd say after 3 years
sreddar

The depreciation is roughly 20% a year based on the value at the start of … The depreciation is roughly 20% a year based on the value at the start of the period so that after 10 years car is worth about 10% of what you paid originally for it. Older cars have higher maintenance costs and higher road tax which cancels out some of the saving but on the other hand you might not bother to fix minor dents and scrapes. Maybe get a low mileage car to try and avoid major repair bills.



That is what I was thinking about hitting a balance where cost of depreciation is less significant and cost of repairs and services (cambelt etc) become more significant. I think 3 years is the perceived commonly best time because that is when a lot of warranties run out, so you have a lot of people selling up then, people who cannot run the risk of something going wrong (retired cash buyers, leases, self-employed, company cars).
Depends on the car. A 10 year old yaris will be worth alot more than a 10 year old clio . Despite the original price being near identical.

Edited by: "smellyonion" 17th Jan 2014
Buy a low mileage Toyota, Hyundai or Kia with a fully documented service history, you will then still have the remainder of a 5 year ( Toyota/Hyundai ) or 7 year (Kia ) warranty.
Best value is to buy a. £500 car off eBay with as much tax and mot, if it fails the next mot, scrap it and start again .
Inactive

Buy a low mileage Toyota, Hyundai or Kia with a fully documented service … Buy a low mileage Toyota, Hyundai or Kia with a fully documented service history, you will then still have the remainder of a 5 year ( Toyota/Hyundai ) or 7 year (Kia ) warranty.


doesn't the warranty only apply to the 1st owner?
ktm666

Best value is to buy a. £500 car off eBay with as much tax and mot, if it … Best value is to buy a. £500 car off eBay with as much tax and mot, if it fails the next mot, scrap it and start again .



Providing it even works while you own it. How many of those cars have "real" mots? Most of the time it's someone they know doing a dodgy.
I bought a car in July which is 3 years old,have original receipts and it has lost a lot of value from new. I'm very happy with it and got it for a good price(bought it privately). I plan to keep it for a while hopefully so will get my monies worth and further depreciation not really an issue.

Even though it is 3 years old it only had 9.5 k on the clock when I bought it. Had a good service,has been garaged and kept spotless it is more or less new.

My last car I bought from someone on ebay in 2009 for £920 as a run around(good service history/receipts etc), I no longer have it but its still on the road. 13 years old now,was a cracking wee car-extremely reliable,cheap to run,repairs minimum. Passed every mot I put on it and serviced regularly.

Look after a car and it will look after you


Edited by: "takethatfan1978" 17th Jan 2014
smellyonion

Providing it even works while you own it. How many of those cars have … Providing it even works while you own it. How many of those cars have "real" mots? Most of the time it's someone they know doing a dodgy.


This has worked well for me for the last 8 or so years, might not be the option for some, but from my experience, it's the best way on not loosing money through cars. Often I'll sell for more than I buy. Yes, some might cost money, but the idea is to get a half decent car in the first place. As for the mot's, I never knew this was an issue? Garages are just as likely to put a 'dodgy' mot on a car so they can sell it and turn around a quick profit as the private seller who happens to have a mate who is an mot mechanic at a mot registered garage.
3 years I would say, manufacturer warranty has just run out so there is no real value in its actual age as such when it comes to trouble free motoring, but you also have to look on the flip side, it could be a pup. Swings and roundabouts really, you will never find the perfect balance in the motoring world, too many people trying to scrape the cream off the top.
ktm666

This has worked well for me for the last 8 or so years, might not be the … This has worked well for me for the last 8 or so years, might not be the option for some, but from my experience, it's the best way on not loosing money through cars. Often I'll sell for more than I buy. Yes, some might cost money, but the idea is to get a half decent car in the first place. As for the mot's, I never knew this was an issue? Garages are just as likely to put a 'dodgy' mot on a car so they can sell it and turn around a quick profit as the private seller who happens to have a mate who is an mot mechanic at a mot registered garage.



I agree with you my last car gave me a few years of great cheap troublefree(excluding snapped cambelt,but that was garages fault) motoring.

My £920 car lasted me 4.5 years and still on the go now,i was just going to scrap it but our mechanic who is also a friend took it and has guaranteed us work on our cars now,this has equated to quite a bit from servicing to repairs on my husbands car and mot. I have certainly done well out of my 'banger'
AL1S0N

doesn't the warranty only apply to the 1st owner?




No, they are fully transferrable to future owners.

Only Vauxhall limit their warranties.
5 years, there hold be **** all depreciation after that.
Strange - looking at the people that have been down voted as there is some sound advice.

The question isn't worded the best, the OP asked for the point at which they would maintain the greatest value. This would have to be buying brand new as that would be when it is worth the greatest.

I presume the OP means to ask when the best point is to buy a car so that it won't lose as much.

A poster above said that it depends on the car which is spot on, all cars depreciate at different rates. Generally buying when the car has got to around £1000 is a good point, as long as the car has been maintained and has MOT, then it can hover around this price for a few years. This is dependent on you maintaining the car though. If you can do repairs yourself then this point is even better - if you're going to have to pay for every minor thing with the car then you may be better with a newer car.

I prefer to buy cars that would be quite expensive new but at a good few years old. That gives me the luxury of a quality built car at a price point I can justify and not lose to much on.

Our current cars are 12 years old and 9 years old. The 12 year old car, we have had for 5 years, the 9 year old car we have had for 2 years. So both cars were bought at 7 years old.

The 12 year old car has lost approx £1000 over 5 years, so about £200 year.
The 9 year old car is worth more than we paid so hasn't lost anything yet.

I do servicing and minor repairs myself, in the time I've owned these cars other than regular servicing, tyres and brakes all that we have had to do is:

Exhaust back box on the older car,
Suspension spring on the newer car,
Boot switch on the newer car,

Approx £250 worth of repairs - not too bad over the timescale.
nbuuifx

Strange - looking at the people that have been down voted as there is … Strange - looking at the people that have been down voted as there is some sound advice.The question isn't worded the best, the OP asked for the point at which they would maintain the greatest value. This would have to be buying brand new as that would be when it is worth the greatest.I presume the OP means to ask when the best point is to buy a car so that it won't lose as much.A poster above said that it depends on the car which is spot on, all cars depreciate at different rates. Generally buying when the car has got to around £1000 is a good point, as long as the car has been maintained and has MOT, then it can hover around this price for a few years. This is dependent on you maintaining the car though. If you can do repairs yourself then this point is even better - if you're going to have to pay for every minor thing with the car then you may be better with a newer car.I prefer to buy cars that would be quite expensive new but at a good few years old. That gives me the luxury of a quality built car at a price point I can justify and not lose to much on.Our current cars are 12 years old and 9 years old. The 12 year old car, we have had for 5 years, the 9 year old car we have had for 2 years. So both cars were bought at 7 years old.The 12 year old car has lost approx £1000 over 5 years, so about £200 year.The 9 year old car is worth more than we paid so hasn't lost anything yet.I do servicing and minor repairs myself, in the time I've owned these cars other than regular servicing, tyres and brakes all that we have had to do is:Exhaust back box on the older car,Suspension spring on the newer car,Boot switch on the newer car,Approx £250 worth of repairs - not too bad over the timescale.



Yes thanks for rephrasing it and your further info
Ideally you want to get a "future classic" so you can sell at a profit. There was a time when you could get an E-type jag for a couple of hundred quid. There are various lists on the internet showing what the experts think will become classics in a few years.
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