Depreciation vs Maintenance.

[MBDevotee]

I have heard that if you pay off very early it could affect your credit rating?


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Nope, if anything it will improve it - taking out a loan then paying it off improves your score, more than never having finance in fact. But its important to pay it off in less than 13 days (well 14, but I'd never run it that tight.)

If you pay it off in less than 14 days its actually classed as "cancelled" and removed from your file.

But also you have significantly more consumer protection if a car is on finance, so if its 0% or perhaps 1% APR its not worth paying off.

 

[MBDevotee]

See my post #39. He knows what he is doing and buys a new car for him and his wife every ~3 years (currently Q8 and E53 AMG Coupe). Going financing seems to be the best way at the moment because they (think that they) will make their money on the finance package and are prepared to offer something better than on a cash deal.

Nope, not so much they will make money on the finance (on new cars - different on used) its about renewal and customer retention.

Imagine someone goes to the dealership and buys a car Cash. They leave the dealership and do not HAVE to ever return, they can change their car when THEY want to and so on - for a company like Merc that's awful... a 3 year old Merc is hardly falling apart and these people may keep it 3.5, 4 or even 5 years.......

Now imagine a customer on PCP. At 3 years they have a lump sum to find which 90% of them can't or don't want to find... so at 30 months they get a call from the nice friendly man at the dealership who is just "touching base". He mentions there are some great deals on at the moment, and he can probably get them into another car but much newer with the new tech and incredibly that will only be another £35 a month - I mean thats nothing, we aren't talking about £50,000 any more, we aren't even talking £700 a month, no we are only going to be haggling over £35 a month..... which customer do you think the dealer and manufacturer makes more money from over 30 years?

So they can't FORCE you to take a PCP, they have to "encourage" you to take one, how? By making the rate more attractive, by throwing in service packages, by doing deposit allowances.

Almost without exception, a PCP will be made more attractive than paying cash - I saw Audi the other day were offering a £7000 deposit allowance on some Q something or other....... quite a big incentive.

 

[DSK]

Hmm, sounds like juicy thread and one which, I'll read when I have more time.

For me even now being in a very healthy position in life and a happily able to spend £110K in a disposable/careless manner without it eating into my investment and savings etc, I've no interest to pop to the dealer..... most stuff is just to boring and fugly. But I tend to buy good used cars and think I buy at the lower price point where, I have nothing to loose.

1998 S70R bought in 2011 for £1,800.
Was on at around 110,000 miles, all history, 2 owners and now has 159,000 on it and I'm refusing offers of £11k on it.
Maintenance costs have outside routine servicing and consumables have been a wrongly diagnosed radiator costing £250 all in.

1995 UK Supra TT bought around 2010 ish for £5000.
Was on around 140,000 and now 180,000 miles. 2 previous owners, all history.
Only costs outside servicing and consumables were ignition coil pack connectors and new coils (£700). I won't include performance tuning.
Probably worth several times what I bought it for with typical examples advertised around £35-£45K.

2000 C70 T5 bought around 2015 for £1500.
71,000 miles at purchase and now on 189,000 miles.
Only costs outside routine servicing has been an electronic throttle body fault and a failing radiator (approx £550 all in).
Had offers of £5k on it from the local MOT tester who MOTs my fleet every year, but, again its never going to be for sale.

2007 GSXR 1000 bought around 2015 for £5200.
6,500 miles with full history, extras and 2 owners. Now on 7,300 miles.
No additional costs outside annual MOT and service.
Been offered £5800 from a LBS who MOTd it, so perhaps a bit more privately.

2007 Merc CLS, 65,000 miles bought about 2 years ago for £3000 (within family) so lets not count that. Typical value is around £6K.

I'm considering getting my mum a car that will be easier for her to drive and as an example, I'm looking at roughly 2007/8, 110K Lexus IS250 advertised at around £2/2.5K. Whilst I don't expect it to rise in value, a good healthy one will provide reliable, luxurious, headache free motoring for as long as one wishes.

I tried the lease thing with an E350 and disAstra 2.0 GTC. I can't believe why people do it? I paid £13-17K on each, over 3 years, combining lease fees and maintenance costs. Plus they were the worst to drive in terms of reliability and luxury, including the 2010 E350. So compared to the above, in my book, new cars make zero sense. I'll stick to my old fashioned ways.

 

[Ron240]

For me even now being in a very healthy position in life and a happily able to spend £110K in a disposable/careless manner without it easting into my investment and savings etc,

in my book, new cars make zero sense. I'll stick to my old fashioned ways.

Have I understood you correctly....you have a completely disposable budget of £110,000 yet you drive a 14 year old car?
I have a friend who is probably quite similar to you...he has virtually no outgoings but does not spend money so his savings continue to grow. The last time i got it out of him when drunk he admitted to having £70k in savings. Despite this he is continually pleading poverty and currently drives a 6 year old car.
I work beside somebody who is very comfortable for money (much more than me) but has a reputation for being tight with it. He also drives an older car and thinks new cars are a waste of money. He accused me of being off my head when I told him my previous new car retailed at £40k.

Now I realise it is down to personal choice, but you cannot take your money with you so why not at least enjoy some of it while you can?
I have put this to my friend many times, and recently I think I may be getting through to him.

I just cannot get my head around having over £100k to do with as I please with no consequences, and not use some of it to buy a nice new car.
If you are familiar with the tv comedy series Still Game, I bet you are just like Tam Mullen.

 

[Mr Greedy]

I just cannot get my head around having over £100k to do with as I please with no consequences, and not use some of it to buy a nice new car.

I think different people value different things.
For some the comfort and reassurance having that sort of money (even if never used) can give a reduction in stress and a quality of life that no amount of nice cars/whatevers can replace.
For others, having the cash burning a hole and not the nice car would be the exact opposite position, and they would be miserable not being able to spend it.
Each to their own

 

[DSK]

Have I understood you correctly....you have a completely disposable budget of £110,000 yet you drive a 14 year old car?
I have a friend who is probably quite similar to you...he has virtually no outgoings but does not spend money so his savings continue to grow. The last time i got it out of him when drunk he admitted to having £70k in savings. Despite this he is continually pleading poverty and currently drives a 6 year old car.
I work beside somebody who is very comfortable for money (much more than me) but has a reputation for being tight with it. He also drives an older car and thinks new cars are a waste of money. He accused me of being off my head when I told him my previous car retailed at £40k.

Now I realise it is down to personal choice, but you cannot take your money with you so why not at least enjoy some of it while you can?
I have put this to my friend many times, and recently I think I may be getting through to him.

I just cannot get my head around having over £100k to do with as I please with no consequences, and not use some of it to buy a nice new car.
If you are familiar with the tv comedy programme series Still Game, I bet you are just like Tam Mullen.

I'm still reading the 1st page of this so don't want to derail but, knew this will be a great thread to see how different things suit different people.

Yes, I have money and drive old cars. The Supra and Volvo's replaced some new stuff like Jaguar XKR 4.2 and a couple of BMWs simply as they were more reliable. I appreciated a car not having a single glitch compared to chasing down ever idle flicker, dodgy smell, fault code etc even if the car drove fine on the face of it.

I've put £110K aside to use as I wish, putting the rest of the larger sums back into the bricks/mortar/investments type stuff. Now spending £110K on a piece of depreciating new shiny metal which anything this side of more expensive Supers cars doesn't interest me. There's something that does a lot more for me such as an old CLS55 AMG which I'm trying to find the right example of one for my stable than an new fugly CLS53 (seriously looks like 1/2 arsed work at MB gmbh office in my book). Working hard, putting in the effort, travelling 1,000 miles a week, snow or shine, ensuring my family has 100% of me as well as my professional career, cost me my first marriage. My 1st wife wanted to chill more (in a selfish way). My 2nd wife isn't much better and thinks money comes easily. As a result, I haven't told her about what I've sold, what I have invested in, what I have kept for a small personal treat (£110K). If she knew, she would have the holiday brochures out, appointments at the estate agents and local dealerships, rather than taking a moment to appreciate the fabulous life and things she has now. She doesn't understand the grit I have for hard, honest work and what it takes, even when you are at breaking point to keep going. She has never made it easier for me since marriage. How can someone like this every appreciate the true value of £1? let alone more!

Give most people £100K and yes they'll blow it on buying something like a Range Rover Sport SVR and a holiday... then what? can't afford to fuel/service it, get little back for it when sold? Not very clever! Very few people will cherish and use money wisely! Its taken me 40 years of what seems like a tough life and sacrifices to reach this point.

As a family we also fly to 3rd world countries 4 times a year (different members go each time), (outside of lockdown), putting aside some of our annual earnings into a family pot, which is used to pay for medical stuff such as eye treatments, feed the poor and education in 3rd world countries for whom need it. No we are not a charity but, been raised this way from day one. Do honest work and help those in need. Never understood it as a kid but started tagging along when I was in my mid 20's to help. When you see a 7yr old, with news paper as a roof, no family, no hope, just secluded waiting to die, too low to even beg ..... the though of ****ing money on a car or a rolex never comes to mind but, seeing someone whose able to see again, live again, do more for themselves and family, the kid who has no hope waiting to die being given an education and more importantly a new chance in life is seriously like nothing you can imagine. The only sad thing is, we can only help a small number out of our pockets each visit compared to those who need it. (It also pains me to watch the many of the charities on TV doing similar now but, knowing that money will not being going where needed). My family has been doing it off their own backs and from their own pockets and hearts for over 40 years!

Many say, 'you can't take it with you, enjoy it'.... that's true. You come into this life with nothing and leave with nothing.
I say, 'have a little joy but, do not waste it!' You never know what's around the corner and who you may be able to help in what way. What is little to you, could be more than the world to someone else!

 

[Ron240]

I gave you a like for the lengthy reply that you clearly put a lot of thought into.

Just for the record I certainly wouldn't blow that amount of money or anything close to it on a car, but I wouldn't drive a 14 year old one either.
I would do what I do now and keep on buying the type of new cars that I have been....but not need to save up the money in-between.

It is your money and you are free to do with it as you please, so I am certainly not going to tell you otherwise.

 

[eman]

If you are born into money spending it is easy. If you won the lottery and you were normal working class it’s a lot harder. Yes you buy a big house a few cars expensive holidays look after your family. But the handling of the hangers on is what gets people. Not to many who won big on the lottery stay married as the pressure is to great for them to handle. I liked Chris Eubanks reply when asked what it was like going from a millionaire to bankruptcy and he said when he was a millionaire everyone had a £3-5k problem. As DSK says some people have a choice how to spend money but an awful lot don’t.

 

[Ron240]

I liked Chris Eubanks reply when asked what it was like going from a millionaire to bankruptcy and he said when he was a millionaire everyone had a £3-5k problem.

That was a great interview...I really enjoyed watching it.
Chris Eubank is a very smart man and I can see that now...but back when he was boxing I wrongly perceived him as arrogant.

 

[EmilysDad]

That was a great interview...I really enjoyed watching it.
Chris Eubank is a very smart man and I can see that now...but back when he was boxing I wrongly perceived him as arrogant.

I always think of They Think it's All Over when they set Chris up with his comments about Jonah Lomu 16 mins 50sec and then a few mins later

 

[rorywquin]

..................................

As a family we also fly to 3rd world countries 4 times a year (different members go each time), (outside of lockdown), putting aside some of our annual earnings into a family pot, which is used to pay for medical stuff such as eye treatments, feed the poor and education in 3rd world countries for whom need it. No we are not a charity but, been raised this way from day one. Do honest work and help those in need. Never understood it as a kid but started tagging along when I was in my mid 20's to help. When you see a 7yr old, with news paper as a roof, no family, no hope, just secluded waiting to die, too low to even beg ..... the though of ****ing money on a car or a rolex never comes to mind but, seeing someone whose able to see again, live again, do more for themselves and family, the kid who has no hope waiting to die being given an education and more importantly a new chance in life is seriously like nothing you can imagine. The only sad thing is, we can only help a small number out of our pockets each visit compared to those who need it. (It also pains me to watch the many of the charities on TV doing similar now but, knowing that money will not being going where needed). My family has been doing it off their own backs and from their own pockets and hearts for over 40 years!

Many say, 'you can't take it with you, enjoy it'.... that's true. You come into this life with nothing and leave with nothing.
I say, 'have a little joy but, do not waste it!' You never know what's around the corner and who you may be able to help in what way. What is little to you, could be more than the world to someone else!

I respect your philanthropy but did you need to tell the world.

 

[rorywquin]

Have I understood you correctly....you have a completely disposable budget of £110,000 yet you drive a 14 year old car?
I have a friend who is probably quite similar to you...he has virtually no outgoings but does not spend money so his savings continue to grow. The last time i got it out of him when drunk he admitted to having £70k in savings. Despite this he is continually pleading poverty and currently drives a 6 year old car.
I work beside somebody who is very comfortable for money (much more than me) but has a reputation for being tight with it. He also drives an older car and thinks new cars are a waste of money. He accused me of being off my head when I told him my previous new car retailed at £40k.

Now I realise it is down to personal choice, but you cannot take your money with you so why not at least enjoy some of it while you can?
I have put this to my friend many times, and recently I think I may be getting through to him.

I just cannot get my head around having over £100k to do with as I please with no consequences, and not use some of it to buy a nice new car.
If you are familiar with the tv comedy series Still Game, I bet you are just like Tam Mullen.

One of my neighbours bragged to me that he has more money than he can spend. He definitely is not short of money but.......he is as mean as cat sh1t. They only have one small light on where they are sitting and the rest of the house is in darkness. She told my wife that she is wearing thermal underwear because it is cold inside (won't turn thermostat up). He is 70+ & goes on his roof with rickety ladders etc to do any work (recently repointing and some flashing that needed repair) because he doesn't want to pay others............not sure how he'd feel about life if he fell off the roof.....gives me the heebees seeing him up there.

I don't get it and I do struggle to relate to tight fisted people (my dad was a tight fist).

I've told my son that my aim is to only leave enough for an Ikea coffin & cremation (I consider an elaborate funeral the biggest waste of money ever devised) - burn me and dump the ashes. I'm spending the rest.

 

[EmilysDad]

.....

I've told my son that my aim is to only leave enough for an Ikea coffin & cremation (I consider an elaborate funeral the biggest waste of money ever devised) - burn me and dump the ashes. I'm spending the rest.

about 15 years ago I helped out at a funeral my Dad had arranged. It was for a local Taiwanese who'd owned a few take-aways, he was only a little bloke but the family had chosen a huge American style casket in oak .... the kind you see on films where the lid is split. Apparently it'd cost the funeral firm £1500! There were 6 of us carrying ... it was stupidly heavy.

 

[d215yq]

Have I understood you correctly....you have a completely disposable budget of £110,000 yet you drive a 14 year old car?
I have a friend who is probably quite similar to you...he has virtually no outgoings but does not spend money so his savings continue to grow. The last time i got it out of him when drunk he admitted to having £70k in savings. Despite this he is continually pleading poverty and currently drives a 6 year old car.
I work beside somebody who is very comfortable for money (much more than me) but has a reputation for being tight with it. He also drives an older car and thinks new cars are a waste of money. He accused me of being off my head when I told him my previous new car retailed at £40k.

Now I realise it is down to personal choice, but you cannot take your money with you so why not at least enjoy some of it while you can?
I have put this to my friend many times, and recently I think I may be getting through to him.

I just cannot get my head around having over £100k to do with as I please with no consequences, and not use some of it to buy a nice new car.
If you are familiar with the tv comedy series Still Game, I bet you are just like Tam Mullen.

Well it depends on your definition of diposable. As I'm 36 I see my savings of around that amount as being able to retire 5-10 years eaarlier (or do a 10 hour week teaching English instead of 40 hours in a "proper" job) and yes that money would enable me to do that for 10 years as cost of living is cheaper here and I have a city flat and a country house paid for (it's 10% of UK property prices and ive had to regut them myself so not as impressive as it may sound)...

Given the above and having a good and secure (for this day and age anyway) job I suppose some would say the savings are "disposable" but I don't agree and up until 3 months ago I drove a 33 year old wreck - soem 100k car could never match the enjoyment and quality of life of 10 years of retirement or maybe a beachfront property! I only drive a (rented) new car now as I get a very "favourable" rate from the company scheme and having a house to regut I couldn't be bothered to maintain the 33yr old wreck and needed an estate. I may well buy a 10k SEC or W124 convertible as they will not depreciate and should be cheap to maintain as I'll learn DIY as 2nd cars but even then I want my house sorted first!

Back to the original thread it's amazing how much people think cars cost to maintain. People make comments like "oh you must be saving so much paying 250/month absolutely everything included (exc fuel) for your new focus estate (about half price of market rate) over that old car". Which is not true as the fixed costs of the old merc (insurance breakdown raodtax) were 200/ year, MOT/DIY service 120/year and there was an average of 500 of other maintenance expenditure and with that it did 20k miles per year with hardly an issue. So I'm down 1500 a year and that's before you consider the lower mpg the new car does.

If I lost my job (and as such new car) tomorrow I'd get the old merc through the MOT and be perfectly chilled driving that until I decided what job/lifestyle/project I wanted to do next in my life and what sort of car (if any) I may need to change to. It is nice having a new car where everythign works and it's just easy to drive and forget about but it's nowhere near a game changer such as the extra weekend house/travels/sabatticals from work and volunteering holdiays I've done and would probably forget about it after a few weeks of readjusting to the older vehicle.

 

[Ron240]

Well it depends on your definition of diposable.

I was responding to how it was originally written.
"happily able to spend £110K in a disposable/careless manner without it eating into my investment and savings etc"

This has all been previously clarified and understood so I would rather not drag it up again please.

 

[davemercedes]

This has probably been the most interesting thread I've read through on the forum - so a big thank you all!

It's very interesting to read other people's views on car ownership and depreciation etc. I bought my current car a 2007 S203 C Class Estate for a shade under £9K in 2013. Initially I intended to upgrade it later on but retirement reduced my mileage more than I had anticipated (and lately the pandemic reduced it to practically nil) and the thing about it is - it's been a good car and when I'd had it for 2 years I realised it was a keeper. I get it serviced by a superb local garage and take it to an Indy for anything specialised (e.g.: Transmission Service). My Indy (Mercland) solved a limp-mode problem by finding a split pipe which cost £125 I think.

Otherwise the car still does what it should i.e.: it starts, stops and drives beautifully and at risk of somebody up there hearing me, it doesn't go wrong. So now, rather like DSK's "fleet" I drive a 14-year old car that I still love to bits and whenever I get the idea of changing it's actually SWMBO who says "don't - there's no need" ! Unfortunately the money making machine that is city councils or rather their method of turning the Clean Air requirement into robbery will probably force me to make a change. But I shan't be rushing towards an EV - when I can easily get hold of a - 12 year old Toyota Hybrid for £9K and enjoy luxury in a 7-8 seat people carrier (for taking the grandchildren around) and simultaneously reduce my road tax and fuel bill in one go!

 

[MBDevotee]

Good point although a 2008 era Toyota hybrid won’t give you much over 35-40mpg (a little more in the city a little less on a motorway).

If you can, get the 1.8 not the 1.5 (assuming you are meaning a Prius) as it’s fuel economy was massively better (60+ around town, 50+ on a long run) which is the opposite of a conventional car which is better on juice on the motorway.

 

[DSK]

There's another thing that slipped my mind the other day.

Volvo, a few years ago stated that they don't want people to buy their cars in future and instead pay a flat rate and rent the car. The purpose of this is to wrap up the costs of loans, leases, purchases, taxation etc all into one monthly subscription. I believe, whilst not widely rolled out (yet), this is in active trial. I've never used nextflix so have no idea how it works! (too busy leading a sheltered life) which is something they compared it to at the time. I'm guessing its a bit like SKY, you pay for a package, then change as you wish. With cars the change, subject to charge will be model changes and new for old etc.

I assume its only a matter of time before this becomes a norm as it seems most of us are considered to be a subscription culture by the business experts.

For some, sure, wrapping up costs up all into one payment will consolidate a few costs and be easier to manage and stay on top of. I'd like to see what this looks compared to the current lease/pcp etc methods the industry is forcing consumers down.

Personally, to me, its a way of extracting (large amounts of) money, in a way which only continues to favour the fat cats of the industry and yet, the customer owns nothing in the process. Additionally, I feel that the prices will deliberately increase further for vehicles to push the majority down this path. Totally unethical in my book as it will be pushed as doing the consumer a massive favour.

 

[Mr Greedy]

The problem with the above for some, is that cars can be very emotive, and people treat them very differently.
My mates car, I'm almost loathed to take a lift in it (even pre-coronavirus) for fear I'd catch rabies or the plague.
My car is spotless inside and out (most importantly inside).
I don't know how cheap car rent would have to be for me to get over the state some people leave cars in. Picking noses. Coughing. Chucking rubbish everywhere. Getting in with massively muddy boots and dogs, with mud all scrapped into the speaker grills in the door and all over the seat base.
It's different with today's car rental, as you rent for a specified period of time (e.g. 7 days on holiday) and quality control and cleaning can be easily accomplished between users. But I think (please correct me if I'm wrong) that the fat-cat eutopia of the model you are suggesting is almost an individual journey-by-journey approach. A bit like Boris bikes or whatever.
Being able to 'sweat' the asset for use 16 hours a day, vs 0.16 hours or whatever someone might normally use their own car for.

 

[DSK]

@Mr Greedy - if I read you post right, the Volvo thing is not like a Boris bike scheme or those rental car app things but, rather like popping to a dealership, selecting a new car but, rather than lease/pcp/hire and whatever other nonsense they call it plus, tax, gap insurance, maintenance etc, all get wrapped up into one monthly payment, for however long you wish to rent the car for (same as typical 2/3/4/5yr else deals the dealers offer now). The monthly payment would be determined by model/rental term/mileage etc and then you hand back at the end (IIRC).