A money saving car theory to share...

[ninebob]

Just wanted to share my way of thinking ...

I'm a firm believer in the concept of "disposable cars". I'm 24 years old, and earn a decent salary, but I don't like wasting money, so have sucessfully applied the following policy for the last 6 years:

Buy a car for £250 to £450, with maybe 6 to 9 months tax and MOT. Spend nothing on servicing etc, not even oil or wiper blades! Just fuel. When the MOT is about to run out, sell it on cheap (maybe £50 or £100, or at worst just scrap it), then start again for the same amount.

My car ownership has therefore cost me about £300 per year. Bear in mind that INCLUDES road tax. All I've paid on top is insurance and fuel. I reckon it's a damn good financial policy.

And I haven't even had what you'd call "rubbish" cars. I started 6 years ago with an A-reg fiesta, and have worked my way through a Citroen BX, 2 Granadas, a Peugeot 405, Honda Accord, Audi 80.

Now back on another Pug 405, this time a J plate diesel. Great fun to drive, and it's cost me nothing since I bought it for £400 6 months ago. Nothing.

Now, all you who drive nearly new cars (Adam? Simon?) - tell me how much you've spent on servicing, finance repayments etc, in the last six months....

Am I on to something?

 

[david and julie]

I have a friend who as been doing similar for years.

He pays a bit more than that, always buys the very low insurance groups and cheap to run cars. Gives them a good clean and polish and always as a for sale sign in the window. He always keeps the price below about a grand because people can afford that much and always as another ready in his drive.

He reckons he makes a few quid and as free motoring.

In all fairness it depends how many miles you do, you wouldn't be using a runner if you are doing 20K or 30K a year.

 

[kevplumb]

i used to jog behind busses
till my old man told me to jog behind taxis and save more money

 

[AdamW]

Hey Simon, welcome back.

Yes, I have a couple of colleagues who believe not so much in disposable cars but in cheap cars. I remember one of them had just had his G-reg Cavalier in for MOT. It failed and needed about £200 of work. "Hahaha!" said I. "My car, being a few months old, will not fail me and I don't need an MOT for nearly 3 more years!"... I found a hole in my logic a few seconds later when I remembered my monthly payments were £248

It is all a matter of priorities I suppose. I had wanted a car since forever. Even when my mum was pregnant with me they picked up "Brmmmmm brrrmmmm" noises on the stethoscope. Now living in the West End is great for going out and living it up, and you can walk most places. But a look at the cars round those areas shows what kind of money you need to keep a car in Knightsbridge! So by the time I had both the money and the space to have a car, I was gagging for it... and blew a load of wedge and got a loan to buy a nice one. Of course a few months later when I wanted a mortgage and found they slice car payments off your salary I cursed my autovanity.

I have 3 more payments and the car is mine... all mine! MWAHAHA!!! I will keep it for another 6-12 months after that I think, then trade up. Use that extra £248 a month for a couple of holidays perhaps. Make sure I have a garage first I think. What a goal to set myself.

I know a couple of guys who've gone to the extreme on this: one bought a brand new MG TF (only the little engine though), another one has bought an MR2. Both nice cars. Now one of them lives on his own in what he describes as a "shi**y little bedsit", and the other is going to be renting until he is 40 (not that kind of renting, Simon )

If I got something like a TVR, I would consider having an old cheap car as a daily runner, save a lot of money both on insurance and petrol, plus fixing the TVR ever 1000 miles

 

[pipme]

In the end one does what one can afford ..... That is the crux.. aford

 

[ZenStalinist]

Well, I actually don't plan to do that. It'd take too long to remove the extra loud sound system, neons, etc.

 

[pipme]

Asked a dentist acquaintance about gas consumption in his home, noting three rooms with gas fires beside full CH .... His reply "Whatever it takes" .....

 

[ninebob]

Asked a dentist acquaintance about gas consumption in his home, noting three rooms with gas fires beside full CH .... His reply "Whatever it takes" .....

What's that got to do with my car

Incidentally, this one's been so reliable I'm thinking of breaking my tradition of selling before the MOT - I might put this one through and see what happens, hopefully keeping it for another year. Just for the cost of the test!

Um, what is the cost of the MOT test these days, anyone know?

 

[pipme]

Just to illustrate the real outlook some people have to cost...

P

 

[masona]

Now, all you who drive nearly new car

Well this is my theory.

If I was living on my own then I probably do what ninebob do but as I have young family I feel the newer car have more safety equipments such as my car have Euro NCAP crash score of 4.5 out of 5. The problem I finding is there are too many landrover, jeep etc and would you stand a chance if they hit your old banger ?

Two of our workmate was killed on the way to work in their fiesta last month hit our bitumen tanker on the side ( road condition - raining ) but having said that they wasn't wearing seat belts but I'm sure the ABS braking system and airbags must be a great advantage.

My late father used to say "If it save your live then it's a bargain"

 

[securespark]

Point taken.

As far as costs go, Apart from tax (115 pa) and insurance and fuel, my only cost to date has been around a ton fifty for the first service at 18K. Next service (hopefully) due around 36K.

All I know is that the new car has p i ssed all over its predecessor ( a diesel Xantia Estate) for costs:

The annual road tax bill is cheaper.

The servicing (on current experience - it is variable) is a quarter of the cost.

The fuel is cheaper (per tankful) and each tankful goes further.

 

[AdamW]

Here I have left insurance out of the equation as that is so variable: a cheap car for a young bloke is still more expensive to insure than an old bloke in an expensive car. I have also deliberately left MoT off the new car, for the fact that you don't need one until it is 3 years old (yes I know my car would be 3 years and 4 months )

My Ashtray costs me, if I recall, £115 for the 1 year and 3 year services, and about £155 for the 2 year service. Tax is £140ish. I get 33mpg so that is about 10p per mile.

So, working out the cost of 3 years, 22k miles, motoring for me:

3 x 140 = 420 tax
22,000 x 0.1 = 2200 petrol
385 for servicing

total = £3005

Depreciation on the car... well, I bought it for £9000 (was £13000 new, I bought it 4 months old: shows the depreciation). Parkers reckons private sale at £4800. That doesn't include the a/c or alloys, or the fact mine is 27K miles, but I doubt the options would add much. Let's just assume I sell it tomorrow and it goes for £5K (i'm feeling lucky!).

devaluation = £4000

Total motoring costs for 3 years = £7005

Now, let's follow ninebob's theory.

Let's assume I buy a £500 car each year, with 6 months MoT left on it (I doubt you will find many with 12 months MoT). I keep the car for 12 months at a go, so have to run it through the MoT and do a bit of work.

So, cost of 3 bangers = 3 x 500 = £1500
Petrol = £2500 (well, old inefficient engines, more likely to thrash it)
Tax = 3 x 140 = £420
MoTs = 3 x £250 (including work) = £750

Total cost = £5170

Now, that assumes that the car "disappears" at the end of each year, i.e. you scrap it without cost, or you give it to someone for free. People I know with old bangers do this to avoid the hassle and cost of scrapping.

As you can see, the savings are significant, a little more than £600 a year. You may save more if you find a good one and decide to keep it longer. But it all comes down to priorities. For example, I spend far too much on expensive suits, yet the bulk of my home clothes are Matalan! Reason being, I feel it is important that I look and feel good at work, but outside of work I don't really care. Plus I just really love the feel of expensive fabrics. However I know people who buy their work clothes at Matalan yet they think nothing of buying a £150 shirt for a night out.

So, I don't think that I will be going the cheap motoring route any time soon! I just love the feel and smell of a new (or nearly new) car. And the way I can choose between either wafting along with Classic FM on the stereo feeling calm and like a million dollars, or runt it round the country lanes with drum'n'bass releasing my inner chav.

 

[pipme]

One thing missing ... cost of replacement as for example a monthly saving plan at say 4.9% gross .... to deliver £5k in 3yrs thus allowing £10k for replacement vehicle.
5000 ( r - 1 )
( r ^n ) - 1

Where n= 36 months : r = ( 1 + ( 0.049 x 0.8 ) ) ^ ( 1/12 )

Result £131.24 per month. O/A cost £4725 to prod £5k

£5k borrowed at say 6% would cost £157.75 per month O/A cost £5679 to repay £5k

Difference twixt saving and borrowing O/A £954 or £26.5 per month. or 265 miles at A's £0.1 fuel cost per mile

True cost over three yrs
=BAS= £7005 + £4725 = £11750 or £75 per wk
Or
=BAS= £7005 + £5679 = £12684 or £81.31 per wk. @ 7333 miles/annum = £0.58 per mile

Insurance should be added in, averaged would be good shot.
Plus Cost of AA or other.

Oooops this has become more the cost of running A's car !!
Always interesting to try getting that real cost ... Can be frightening !!

P

 

[david and julie]

I would think the least expensive and the best option would be a car such as Adams when he sells it.

At £5000 and only 27K miles the car as lost most of it's value yet will still look nice and clean.

It would also no doubt last another 3 or 4 years with little trouble if looked after. You would probably still sell it no problem then.

Adam would do even better if he lowered himself and bought the diesel Astra instead, because they do minimum 50% more to the gallon. (I get 51 local).

I do agree with Masona though. Most new cars give airbags,sidebars,abs etc and are generally a lot safer.

 

[AdamW]

I am wondering now, from what I understand, back a few decades people weren't particularly bothered about having a new car and most people would be perfectly happy running a car for 10 years. But now we are saying that a 3 year old, slightly below average mileage car is good for another 3 or 4 years...

Would anyone say this is true? Are people more bothered about having a shiny late-model car now than they were 30 or 40 years ago? Was this created by the August registration letter change? Is it due to having slightly different headlights each year?