Worthwhile trading a vehicle every two years?

[Lamingtons]

The problem is who would want a Hyundai Getz, Geez their ugly.

LOLLL ok I agree.

Especially when a Jap car like the Yaris is now on sale for $15,990 driveaway.

Wylie I have owned euro cars, high end hot looking rods. I can safely say that gosh they look good inside and out. But when things go wrong or just a plain ol' servicing it costs SO MUCH. Especially a Saab as IMO - just my opinion - they look dated very quickly.

 

[WinstonWolfe]

Wylie, get your son to check his assumptions on redbook.

Below is an example

Based on the redbook figures below, the price depreciation between a 2 and 4 year old Saab is 30%.
If he pays 40k for a 2 yr old Saab, and sells 2 yrs later, he will lose 30% of 40k = 12k.

Further, he will not necessarily buy and sell for the trade-in prices. Dealers have to make a profit.

For a 2yr trade strategy to beat holding a car, his maintenance costs would have to be higher than depreciation (and slippage due to dealer margins).


If he is on a lower wage, he has no business messing with things like this.
I doubt he has a realistic understanding of maintenance costs.

Our 19yo bought a 10 yr old Holden utility in very good condition for $5k with 140k on the clock. His service costs for the first year are $340.

Finally Wylie, is your son's car garaged most of the time? My view is don't buy an expensive car unless you own a garage to put it in.




2008 Saab 9-5 Aero New 80k
Trade today 30700
2 yr depreciation = 62%


2006 Saab 9-5 Aero New 82900
Trade today 21700
4 yr depreciation = 74%


depreciation between yr 2 and 4 = 30700-21700/ 30700 = 9000/30700 = 29%

2000 Saab Aero New $75886
Trade today $3600
depreciation = 95%

 

[D.T.]

Nathan: Tell me more about buying brand new $40K cars for $30k. Negotiating skills or someone on the inside?

Also, if you're selling them after a year with 40-50K km's, won't that have meant you'll have had at least 4 services done? Are you getting these included in the purchase, or are you including them in the cost to trade?

 

[wylie]

Wylie I have owned euro cars, high end hot looking rods. I can safely say that gosh they look good inside and out. But when things go wrong or just a plain ol' servicing it costs SO MUCH. Especially a Saab as IMO - just my opinion - they look dated very quickly.

I agree..... but I have to say his SAAB still looks good, not dated (except I don't take too much notice of cars, but some car shapes DO date quickly).

We tried to talk him into buying something less "flash" for around $10K but he had his heart set on the SAAB. It has everything that opens and shuts, heated leather seats, pretty schmick, but it broke down after a week, and he had to borrow ours for three weeks while he waited for repairs .

When he asked me a few nights ago about whether he should trade, he actually talked about trading within two years. I just cannot see how he can NOT lose out financially, but happy to be proved wrong.

When we looked at different cars, we spoke to several mechanics. Some said "don't buy a SAAB (or any European make for that matter) due to higher servicing costs etc". Others said servicing was not really more expensive, but waiting for parts can be an issue. Others said it was not really a problem.

The one he bought had a full service history, pretty much one owner, and our mechanic said "I wouldn't buy a SAAB, but if I did buy one, I would buy THIS one." So he is happy, but thinking ahead now of upgrading .

I do know that friends bought a Jag and fuel cost to fill the thing, plus expensive repair costs when they were run into (insurance covered repairs) meant insuring the thing was too expensive. They got rid of it pretty quick smart.

I would just like him to put the "upgrade" money towards buying a unit. Now that I have shown him the numbers on how he could afford a unit with one or two mates to share, I think he is re-thinking. I hope so.

 

[WinstonWolfe]

....but it broke down after a week, and he had to borrow ours for three weeks while he waited for repairs .
........
The one he bought had a full service history, pretty much one owner, and our mechanic said "I wouldn't buy a SAAB, but if I did buy one, I would buy THIS one."

I am amazed that you had the mechanic inspect the car and it broke down a week later.

 

[D.T.]

I am amazed that you had the mechanic inspect the car and it broke down a week later.

Incidental?

 

[wylie]

I am amazed that you had the mechanic inspect the car and it broke down a week later.

It was not something that the mechanic could have picked up.

It was just "one of those things".

 

[PeterC]

Nathan: Tell me more about buying brand new $40K cars for $30k. Negotiating skills or someone on the inside?

yes, his plan might work perfectly if you can always take 25% off new car price....

if the car is easily obtainable for $30k, then 2 years later its not going to go for $27k...

 

[Gools]

Or it might be those rrp's they stick on Australian made cars so you think you're getting a bargain. Everyone else is getting it for $30k though and by the time your two years are up and all the lease companies are trying to flog them off you get caught out with it only being worth $20k.

More details needed Nathan!!

 

[Brett IP]

Definitely not worthwhile unless you have access to cheaper cars somehow or special deals (or ofcoarse a business). Its phenominal how much money you can lose on new cars.

I go for the 4 to 5 year old cars that are a bit luxurious, seem to have been looked after and have low kilometres. To me, for these types of cars, its the best time to buy them as you get the good condition, with plenty of reliable life left, at a low price. Just have to look around and be on to it immediately.

Recently bought a VZ Calais, immaculate with all leather + extras, serviced, only 70,000klm for $16k. Its like new. Now this is a $55k car just over 4 years ago. Ill keep it for 2 to 3 years and still get $13 - $15k for it. Looking after cars plays a good part in resale also.

 

[random]

Definitely not worthwhile unless you have access to cheaper cars somehow or special deals (or ofcoarse a business). Its phenominal how much money you can lose on new cars.

I go for the 4 to 5 year old cars that are a bit luxurious, seem to have been looked after and have low kilometres. To me, for these types of cars, its the best time to buy them as you get the good condition, with plenty of reliable life left, at a low price. Just have to look around and be on to it immediately.

Recently bought a VZ Calais, immaculate with all leather + extras, serviced, only 70,000klm for $16k. Its like new. Now this is a $55k car just over 4 years ago. Ill keep it for 2 to 3 years and still get $13 - $15k for it. Looking after cars plays a good part in resale also.

Now that seems like a nice way to go Brett. V/nice car 24/7, costing nothing . So what you just buy from private paper ads or ?

This is all my dilemma right now , I've always owned 10-15 yr old cars but I buy well and usually resell for same 3 -4 yrs later .
Lately though I want nicer but I still can't bare the thought of new car losses, your deal sounds like the one for me but how do you find something like your Calais at that ?

Cheers

 

[Brett IP]

I just kept an eye out on Carsales.com daily and as soon as it came up I went for it. Took about a month of looking on the net. There was a good range to choose from (many with high K's or not that good condition + higher prices) but this was the best buy.

Some people cant pick and choose over a time period though cause they need a car now. But if you can, take the time !!!

To me, its the perfect age, they have already lost the majority of their value yet are still next to new condition, provided they are looked after, thats the pick and choose bit. First owners 70,000 klm cost him a $39,000 loss, or in this forums language, a house deposit !!! My 70,000 klm will be lucky to cost me $2000 - $3000.

 

[Pa1nter]

Now that seems like a nice way to go Brett. V/nice car 24/7, costing nothing . So what you just buy from private paper ads or ?

This is all my dilemma right now , I've always owned 10-15 yr old cars but I buy well and usually resell for same 3 -4 yrs later .
Lately though I want nicer but I still can't bare the thought of new car losses, your deal sounds like the one for me but how do you find something like your Calais at that ?

Cheers

Another thing is if they are selling it for 20K,and you think that is cheap,offer them 15-16K,tell them it is worth more but that's all your budget is,
You will be surprised,best deals are purchased that way.
I purchased a 2004 Pajero exceed (Turbo Diesel),it was advertised for 28K,it didn't sell for a month through trading post,I offered 20K and he took it.I flew to Sydney to pick the vehicle up,it was just out of lease with the NSW police dept.
They are 65K new,and this one was only four years old when I got it.
Been a good vehicle for the last two years,they are still advertised around 30K.

If your budget is 10K,look for a vehicle advertised for 15K,then make a deal.

 

[random]

Nice one guys , cheers.

See , this 50 and 60 k new stuff , yet getting 20 for it 4 and 5 yrs later is the sort of thing I just 'can not' bring myself to cop with new cars , so I've never owned a brand new car .
I hear some people call their nice new car an investment and I feel like screaming at them , what - an investment don't you realize that with interest, depreciation and costs you've probably just thrown away 30 or 40k.

Nice buying guys , Painter, that's similar to how I buy my property. I hear people all the time raving about the great 10% of ask they got but I wouldn't get out of bed for 10% myself, especially at todays prices .
My sisters down right embarrassing, at least I use strategic moves to get my prices but she just struts in as bold as brass - 400, oh that's ridiculous I'll give 260 right now. Would you believe she gets them , if they knock it back she just walks and finds another one .

Anyway , the next car I'm eyeing off is a Landrover Defender , 06ish. But they're bloody asking 30 - 35k for an 06, I'm not paying that or I may as well just throw 18k in the gutter right now .
But thanks guys , I'm going to apply your strategies , be patient and get mine for 15 - hopefully . I feel much better .

Cheers

 

[Pa1nter]

Anyway , the next car I'm eyeing off is a Landrover Defender , 06ish. But they're bloody asking 30 - 35k for an 06, I'm not paying that or I may as well just throw 18k in the gutter right now .
But thanks guys , I'm going to apply your strategies , be patient and get mine for 15 - hopefully . I feel much better .

Cheers

I purchased a landrover defender about six years ago at fowles auction in Brisbane,
It was ex energex with toolboxes galore, it was around 2003 model with about 60K,turbo diesel,
I cant remember what I paid for it ,it was a steal at the time,took it to the cape,thrashed the **** out of it,was planning a simpson trip when the wife fell pregnant and we couldn't go.
I miss that landy,

I was following the travels of this pair of lads http://ihana.com/ and even helped them with workshop manuals when the were stuck one time.Worth a read,I'd be interested in what you think of their travels.

I will keep my eyes open for one, are you after a dual cab,or ute?

 

[random]

G'day Painter , I had a feeling you might have had something to do with defenders. 03-4 to - 07 ish would be fine with me , all comes down to price.

I don't know much about them . I've just started looking at them lately but it's funny , owners seem to love them and there non pretentious style . Spose to ride quite well , be economical and a great 4wd too so.
I'm thinking about the 4 door 110 . Love a 2010 , nice paint ,dash , too much coin though.

Although their simplicity is one of the things I like about them , plus the diesel , I'm a bit disappointed that you seem to have to go upto 2008 to 10 before they've been updated a bit with any extras and a nice dash.

Thanks for the link to by the way, just took quick look, that deserves some time, looks great. I'll have to save it for when I have more .

Cheers

 

[Ausprop]

just opened a letter from westpac saying they are ending the GMH rewards program, thats a bit of a loss! still any points accrued to october are good for 5 years

 

[BayView]

At the end of the day, it all comes back to dollars out of your pocket..

Unless you are very lucky, your first "new" car will be bought with borrowed funds to some degree. The level of these is relevent to your income and access to credit.

So, if you are constantly swapping to another new car every year, or two years, you may not lose any money in the transactions, but you will still be shelling out for the repayments and insurance and rego (rego is built into the price of new cars - even if the sales people say it is free).

So the question is; how much can you afford to continue on with in repayments etc indefinitely?

Nothing wrong with all of the above, so long as you remember that yes; you are enjoying a new car each year or so, but you are using funds (cashflow) to enjoy it.

 

[topcropper]

I just don't think the numbers would work because if they did, wouldn't everybody be doing it.
.

I don't think it would work by buying new.

just looking at carsales, seems a 2 year old cdore is only worth about $20k, so this plan isnt so great

I'd reckon you could get a similar scheme to work by buying cars when 2 years old, and keeping for 2 years. That could work if your buying right, and you don't get much wear and tear with cars that are 2 to 4 years old.


See ya's.

 

[wylie]

Actually, our son has bought a seven year old car, beautifully kept and SAABs are extremely safe and certainly know how to add bells and whistles. His idea is that he should upgrade in two years to another seven year old SAAB, or upgrade to a five year old model.

I still don't see how he can not lose money doing this, but I'm happy if he proves me right.

I'd just rather see him put that money into his own place, or his own deposit.