You know I cannot, for the life of me, understand what persuades people to buy new cars. Don't get me wrong, I'm glad they do, as it means more second-hand cars for me to choose from.
The benefits of a second-hand car include:
- It's much cheaper and you don't lose up to a third of the value the minute you drive out of the showroom,
- You don't need a loan to buy it, and a loan on a depreciating asset is the worst kind of loan,
- It's less likely to be subject to a recall for some dangerous malfunction that only comes to light during the first year,
- It's invariably cheaper to repair, as you don't necessarily need to go to a main dealer,
- If you do total it, it's not expensive to replace,
- You're not so precious about getting a dent,
- Probably cheaper to insure,
- If old enough, you can do most of the servicing yourself,
- If classic it's probably a lot more individualistic,
- The resale value will be much closer to the purchase price, and
- It may even increase in price if it's a classic.
I've never bought a new car, in fact the newest car I ever bought was a 5 year old Volvo estate which lasted me for 15 years. Most have been in the 10 to 20 year age range at purchase and I've never paid more than £7k (that was the Volvo). Most of my cars have been in the £2~3k range.
Here's the Chairman's 2nd hand car tip. If you want a diesel powered, hatchback workhorse capable of towing a caravan, but couldn't care less whether it looks good or not, I'd go for a 2ltr, 2000 to 2004 registered Mazda Premacy. You've probably even never heard of it - that's because it's plug ugly, but because it's ugly you can pick one up with well under 150k on the clock (good for another 150k because it's diesel) for under £500. Bargain!
My next car is going to be one of the above, as the Hyundai Getz isn't powerful enough for a caravan and is at the end of its life anyway as it will probably not pass another MoT without a shed load of expense. Residual scrap value is £200 (if I'm lucky), but it only cost me £800 four years ago. That's what I call value.