Driving a easy bargain
30 years ago the task of buying a car was much simpler, there was less choice of manufacturers for new cars and limited forms of advertising for used vehicles. Choice was limited to visiting your local dealership, looking through the used car section of the local newspaper or waiting for the one monthly magazine dedicated to buyers and sellers of transportation. Today however not only do we have the internet but the sheer range of manufacturers, models and fuel types leads to a huge choice in vehicles both new and second user.
New Car Depreciation
There is no doubt that second hand cars deliver a cost saving over new, we have all heard the term depreciation but what does this mean? Well as soon as you have driven your brand new shiny purchase off the forecourt it has already lost value, in fact some figures quoted are as much as 20% loss in that first two minutes. With an average depreciation of 40% by the end of the first year, dependant upon the model and type, you can see why your new car is a bargain purchase for someone in the market for a second hand car. In theory they could buy it from you five minutes down the road and save themselves thousands of pounds.
And the saving doesn’t stop here year on year a car will continue to depreciate rapidly until it reaches its third year when the graph starts to even out. After three years you could save up to 65% of the cost of the new vehicle. The £30,000 cabriolet that you had your eye on last summer will now cost you £18,000 or wait two more years and you won’t have to pay much over £10,000. As a new car it just cost you £20,000 to own it for 3 years without tax, insurance, petrol, servicing and tyres. Not only have you just lost £20,000 because remember that is without driving it anywhere its just the cost of ownership but regardless of what you do it will continue to lose value.
Why are Second Hand Cars Such a Good Bargain?
Imagine you have selected your model and make of new car, you visit the dealer, you negotiate a little, however this negotiation is based on the competition between regional dealers. You also have to hope that the second dealer can supply the make, model and colour that you want. The second hand car market on the other hand offers a huge choice of vehicles making competition rife and sellers more flexible.
The second hand car market could mean owning the car of your dreams without breaking the bank leaving more to spend on other luxuries without compromising on quality.