Minimising depreciation & Budgeting ?

Page may contain affiliate links. Please see terms for details.

ian8831

New Member
Joined
May 4, 2014
Messages
11
Car
C220 125 W204 Estate
I run my car for work and do around 30k miles total a year, of which just under 20k are business miles. Until now my firm has paid me 45p per mile for the first 10k and 25p per mile thereafter.

I ran a 2004 C180k W203 estate automatic which i bought for £7,800 5 years ago on 35k miles and sold last month for £1,400 on 197k miles, which by my reckoning cost me about £1,200 per year depreciation. It had been a perfect car, and I had considered keeping it, but rattles and burning oil told me it was about to change from an asset to a liability.

I replaced it with a 2011 W204 C220 125 SE estate auto on 40k miles which I got for £16k, but I'm now regretting this purchase (mainly because the COMAND satnav in this model only does partial postcodes, and my work involves visiting farms, so a general area is no good) I'm also disappointed that it only gets 50mpg, on a blue efficiency engine.

I reckon I can sell the new car and break even, and our firm has now moved to a £5,000 pa car allowance (less tax) and a mileage rate of 19p per mile.

I've looked at other cars that might give better consumption, and toyed with the idea of a 4x4 or a lease, but keep coming back to buying diesel estate automatic C Class merc.

My question is: How do I minimise the depreciation? Do I buy one at 5 years old on 40k and run it 2 years to just under 100k and then swap, or go for a newer one and keep it longer, or a cheaper high mileage one and keep it till it breaks?

I love how reliable the MB is, have a brilliant local independent garage, and had a 5 year warranty on the old one, but am told that you can't now get a warranty to take you past 100k miles.

I'm sure there must be clever people out there that have contemplated this, and it strikes me that depreciation is the critical factor when seeking to control my motoring costs

I'd welcome your thoughts - Many Thanks
 
Thats a tricky one to calculate.

I suspect it depends on the car and its depreciation but generally if buying a 3 year old car it will have depreciated around 50% of its value already so the highest part of depreciation has already happened. Finding the sweet spot according to that particular model wont be easy.

You may find that some pcp deals work out better in the long term than ever owning the car.

You say you get only 19 pence per mile from your company... do you also get tax back from hmrc in addition to this or is the 19p the total?
 
100,000+ mile Passat diesel. Buy for £2k, run for 2 years, sell for £800 at 160,000+ miles. Drive like a nun and get 60+MPG. Profit, but dull.
 
If you really want to mimimise depreciation then you have to forget a W204 and probably any Mercedes.

As suggested above, an older, cheap diesel estate such as a Passat (or a Mondeo, Octavia, Avensis etc.) would be the way to achieve your objective within the constraints of your budget.
 
Thanks Sp!ke! I do get the difference back from HMRC. The other comments are absolutely correct, but spending so much time behind the wheel I would rather waft in a Merc than clatter in a Mondeo or park the skoda around the corner when I went anywhere. The Passat is the logical sensible choice but we all chose a Merc for one reason or another and know it's not the cheapest car, I was just trying to determine that "sweet spot"

I will keep looking for a 5 year old model with reasonable mileage and run it 5 years like I did before but then keep it until it dies

I appreciate the advice
 
You're unhappy with 50mpg?

What did the W203 return?
Is this calculated rather than obc?

How many miles are business miles?
Trying to work out 45p per mile vs £500 allowance (what's your tax bracket too?) and 19p per mile and claiming the tax back on the difference.

You have bought a 3 years old car for £16k, so around 45% of list, unless you buy an old banger I can't see you doing it much cheaper than that.

At the end of the day if you are doing 20000 business miles a year at 50mpg, it will cost you 8p per mile in fuel.
That will leave you £2200 a year towards your car.
You will also get tax relief on the difference between 19p per mile and 45p per mile.

If you get £5000 as an allowance you also get £3900 at 22% rate or £3000 at 40% rate.

So after fuel you have either £5200 a year or £6100 to pay for your car.

If you financed your car over 60 months it would be £300 a month at 5.5% apr.

At the end of the day doing 30k miles a year is killer, the only way to save money is an older car worth a couple of grand, or buy a very desirable car at a year old that has already lost 35% with 10k miles on it and sell it a year later with 40k miles on it for a small hit, but that is a gamble and can be hard work, when I was doing 30-40k miles a year that is what I did, but it gets tiring.


I think the allowance is a better option than sticking with the 45p and no allowance?
You get 45p for the first 10k miles and then 25p after that.
But need to know your business vs private mileage to truly work it out.
 
I think I have found the solution - a Saab

I can get a 9-3 diesel estate auto for 7-10k, at around 4-5 years old which does similar mpg.

I have found a good local indy and the running costs should be similar, the parts are still available, and if I start at a lower purchase price the depreciation won't be crippling

Has anyone run a Saab 9-3 - I have some advice as to what to look for from the indy, but would welcome any thoughts...

I hope the Saab forum is as good as this one !
 
Make sure it is £7k, a 4 year old saab at £10k will cost you more than your car now in depreciation alone.
 
I found the parts for my 9-5 Aero were quite pricey and it often needed them in addition to regular servicing!

In fact I jotted down the costs so when I've owned my current steed for the same amount of time - I am going to compare notes as I don't believe my current car costs much more to run.

:crazy:

I used Saabscene when I had one - very friendly and knowledgeable bunch on there.

Not like on here... :D
 
My 9-5 was one of the most unreliable cars I have had. Broke down regularly. Parts were expensive. Depreciated like yesterday's newspaper.

The 9-3 might be better - I think it's a vauxhall vectra under the skin though.
 
Make sure it is £7k, a 4 year old saab at £10k will cost you more than your car now in depreciation alone.

A 4 year old Saab shouldn't be costing £10k - not even a rag top let alone an estate.
 
My 9-5 was one of the most unreliable cars I have had. Broke down regularly. Parts were expensive. Depreciated like yesterday's newspaper.

The 9-3 might be better - I think it's a vauxhall vectra under the skin though.

Did you have a petrol or diesel?

They only shared the B platform and some engines as forced upon them by GM.

Saab 'doing what they want' ultimately led to their demise.
 
JohnEBoy said:
Did you have a petrol or diesel? They only shared the B platform and some engines as forced upon them by GM. Saab 'doing what they want' ultimately led to their demise.

My 9-5 was a 2.3 petrol low pressure turbo. It was actually quite nice when it ran.
 
Hmm. Same engine as mine albeit reduced power.

The only engine part that died on mine was the DI cassette which was quite common.

Mine needed more suspension parts mainly which were also expensive.

Turned a £300 service into £600 / £700 bill.

The first bill I ever had on it was the first major service 6 months on (I bought it at 3 years old) and it came to £1500 and that was with an inde!

Never again unless peanuts to buy and needs must.
 
forget the saab keep the mercedes and buy a tom/tom sat navi ..
 
I got the Saab. 2009 plate diesel estate auto with 30k miles for under 7k.
I broke even on selling the Merc.
It doesn't have all the toys, but after a few weeks I realised I didn't need most of them anyway, and on the trip back I made 58mpg
I realise nobody buys a merc for reasons of economy, but the Saab is as smooth, comfy and quiet, and has better acceleration, and after 2 years and 60k miles it won't have lost anywhere near as much money.

I may pop back to share my experiences in my W203, but for now au revoir x
 
The Fiat Group 1.9 8 & 16v engine is tough, the 2.4 10 & 20v is even tougher :)

Put a remap on that Saab and things change a lot, more economy and better power delivery when you need it.
 
Good luck with it!
 
I realise nobody buys a merc for reasons of economy, but the Saab is as smooth, comfy and quiet, and has better acceleration, and after 2 years and 60k miles it won't have lost anywhere near as much money.


You were getting 50mpg from the C220cdi, hardly what many would call 'uneconomical'. ;)

I don't think the depreciation will be much different.
You can buy a 7 year old Saab 9-3 Estate with 90k miles on it for £2500-3000. So you will loose around £4500 I would estimate.

And 11 plate Edition 125 C220cdi sport with 100k on it will be worth at least £10k at fives years old.
So you will loose around £6k.


Hardly massive figures for someone doing 30k miles a year.

But you obviously weren't happy in the Merc so good move.
 
I was thinking only the other day I wish I'd had this car when I was doing 20k+ miles a year driving all over the country. Unfortunately my company car choice back then only ran to the usual Fords and Vauxhalls.

Of the various cars I've been lucky enough to own (mostly BMW's and Porsche), the Merc would be my first choice for covering those sort of miles.

Mileage in the 320 CDI isn't the best however I don't do that many miles now so its a small penalty to pay for all that torque!!
 

Users who are viewing this thread

Back
Top Bottom