Author Topic: "New cars cheaper than second hand ones"  (Read 4596 times)

kt

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"New cars cheaper than second hand ones"
« on: August 22, 2013, 12:10:23 AM »
http://uk.finance.yahoo.com/news/new-cars-cheaper-than-second-hand-ones-122146242.html
Quote

The premium attached to brand new cars means that most drivers assume it’s cheaper to buy second-hand, but they could well be wrong.

Figures from Moneysupermarket.com show cars straight off the factory are up to 73% cheaper to run, which comfortably outweighs the extra cost of a new vehicle in the long-run.

“If you take all the costs of running a car into account before taking the plunge you should know exactly what you’re in for and this can help you choose a car you can afford to buy and keep on the road.”

unfortunately when they say 'all the costs of running a car' they don't include actually buying the thing. which is more than a little misleading. and by 'cheaper to buy' they actually mean 'cheaper to run'. for the two they've given it costs £500 - £700 more to run a second-hand car so running new car would 'save' you £2,500 - £3,500 over 5 years.

fortunately the comments seem to have noticed this!

martynthewolf

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Re: "New cars cheaper than second hand ones"
« Reply #1 on: August 22, 2013, 01:24:23 AM »
That's shameful. What a crappy piece of journalism. How could they publish such misleading information? I'm glad the comments are giving them a kicking.

dragoncar

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Re: "New cars cheaper than second hand ones"
« Reply #2 on: August 22, 2013, 01:40:33 AM »
Quote
In all cases the cost of insuring the newer car was lower than the older version. 

Crazy UK.  Also... no road tax on new cars???  I don't even know what a road tax is but I can't imagine why a new car would be exempt unless it flies.

kt

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Re: "New cars cheaper than second hand ones"
« Reply #3 on: August 22, 2013, 01:56:43 AM »
road tax is actually almost solely based on CO2 emissions as far as I'm aware. i think some can be so low that they don't have to pay any road tax which i guess might be how they're getting round it. or they may have looked at financed vehicles with those kind of costs included in the package for the first few years.
but i can understand insurers offering lower premiums for newer cars based on the assumption that they have new safety technology and have not had a chance to develop potentially dangerous faults.

dragoncar

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Re: "New cars cheaper than second hand ones"
« Reply #4 on: August 22, 2013, 02:30:41 AM »
road tax is actually almost solely based on CO2 emissions as far as I'm aware. i think some can be so low that they don't have to pay any road tax which i guess might be how they're getting round it. or they may have looked at financed vehicles with those kind of costs included in the package for the first few years.
but i can understand insurers offering lower premiums for newer cars based on the assumption that they have new safety technology and have not had a chance to develop potentially dangerous faults.

Insurance was quoted as $0.  Medical/liability may be slightly lower, but collision and comprehensive will be based on the value of the car which is higher when new. 

Le Dérisoire

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Re: "New cars cheaper than second hand ones"
« Reply #5 on: August 22, 2013, 07:12:36 AM »
Not so long ago, there was a post on Yahoo stating that you should INVEST in diamonds (buying the real thing).

Here it is: http://ca.finance.yahoo.com/news/diamond--investor-s-best-friend--182807971.html

Dr.Vibrissae

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Re: "New cars cheaper than second hand ones"
« Reply #6 on: August 22, 2013, 08:03:13 AM »
Oh, Yahoo news, always good for terrible writing and poorly disguised paid ad pieces. I recently was fooled into reading a piece claiming that I would be surprised by the restaurant that sold the most beer.  I wasn't, but I shouldn't have been surprised that it was based on the restaurants own unreported and unverified "numbers".  I see the UK version is no better.

daverobev

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Re: "New cars cheaper than second hand ones"
« Reply #7 on: August 22, 2013, 08:50:08 AM »
It could be that the insurance is covered by the car dealer for the first year, ditto road tax. Or, as mentioned, if it's below a certain CO2 level, it can be free. But I'd guess it is an 'on the road' price.

The biggest problem is that, while the running costs would be cheaper that first year... the next year you'd have to pay road tax, insurance, etc. And when you get to 3 years, MOT. So you're paying 5 grand more in year 1 to save 700 quid in year 1. Um.

They don't even show the cost of buying new vs buying second hand! And you don't pay VAT on second hand... So yeah, dodgy article.

No Name Guy

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Re: "New cars cheaper than second hand ones"
« Reply #8 on: August 22, 2013, 12:03:35 PM »
 "New cars cheaper than second hand ones"

Only if you engage in flawed accounting and ignore / deliberately leave out what is probably the biggest expense in owning a car - depreciation. 

The tables at the end of that article reveal the flaw.  There's fuel, road tax, insurance, "MOT" (what ever that is), maintenance and "breakdown cover".  Nowhere in that is depreciation.  And with the 5 year old Ford Fiesta being about 550 GBP more than the new in the "total annual running costs" that won't even come close to covering depreciation.

Sorry there UK Yahoo Finance and your clown author Lana Clements - epic fail.
http://uk.finance.yahoo.com/blogs/author/lana-clements/



Matte

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Re: "New cars cheaper than second hand ones"
« Reply #9 on: August 28, 2013, 08:58:39 AM »
The only time I have seen this be true is on trucks in western Canada.  People who bought them per 2009 who paid 40-50k+tax for their half ton truck seem to think that they are magically still worth $30k, yet the same trucks brand new cost 20-30k because they had to discount them so much to sell them.

MrsPete

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Re: "New cars cheaper than second hand ones"
« Reply #10 on: August 29, 2013, 02:09:58 PM »
While I know that used cars are usually the best option, there's always the exception that proves the rule.  When we bought my new car -- six years ago -- it was a very popular model, and the price difference between new and used was just under $1000.  For that small difference, we chose to go new. 

I'm not pretending this is a common scenario, but it is why you should always do the math yourself rather than assuming.