Why buy new and not second hand?

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suds

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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?
 
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. :)
 
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!
 
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.
 
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
 
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!
 
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.
 
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
 
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!
 
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.
Click to expand...
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". :rolleyes:

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.
 
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.
 
"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
 
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!
 
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.
 
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.
 
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.
Click to expand...
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.
 
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]
 
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.
 
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