New Car Dilemma

[Doodi]

Hello everybody. I'm in a bit of a dilemma over whether to change my car or not.

I currently have a 56 plate E220CDI Avantgarde Estate, lots of extras, which I love. 49000 miles, no finance. Had it since it was 8 months old.

Dealer from where I bought it phoned out of the blue on Saturday, just ringing round old customers to see if I was thinking of changing my car. Long story short...

I could trade my car for a new style, 17600 mile, 10 month old E350CDI Avantgarde saloon, loads of extras like mine plus some more too Also, 2 years free service, a years car tax (and then it would be lower than I'm paying now) Still under warranty. And of course no MOT. Insurance would be about £80 a year more than I pay now. Don't really want to come up with a lot of cash so I could have it for £207 a month for 2 years with a balloon at the end.

My dilemma is should I keep my car? I love it and I feel secure that it is paid for. But it is also losing value all the time. Or upgrade to the newer car for £207 a month but then be back on the never ending finance balloon thing? The dealer even said the idea was that you change your car every 2/3 years. So I suppose it's more like a rental/lease type thing.

I know I have to decided for myself but I would appreciate other folks views and what you would do.

Thanks.

 

[Howard]

Keep it.

Don't burden yourself with more debt in these uncertain times.

Just my opinion.

 

[Charles Morgan]

What Howard said. Until the salesman called you were happy, why dance to his tune?

Your car may be going down in value, but the 350 cdi will be going down a lot more, which you pay for. Your cost isn't £200 a month, it is the value of your existing car plus £200 a month - did he say what your E220 was worth?

 

[A210AMG]

^ I'm happy that although our cars are not new, they sit on the drive and are paid for.

I've had new cars and yes its great but it never feels mine until its paid for. Yours isn't losing much now, it depreciation is pretty low now.

The 'new car' you mention will probably lose 5K as you drive out of the garage.

Oh and its a Saloon, will you not miss the estate?

If you can afford it however then go for it, must be a pretty big balloon at the end

 

[Deleted member 37751]

If you think that your car is depreciating, have a look at the figures on the 350....

The main question is- do you need to change cars or have you been swayed by this salesman?

 

[Doodi]

Thanks for your replies - You have all basically confirmed what I was thinking. Well my heart says "Get the new car!! Life's too short!!" but my sensible head says just keep my old faithful.

Howard - I agree, it is a nice secure feeling that my current car is paid for.

Charles - Good point, hadn't thought of it like that, it IS the value of my car plus £200 a month. They first valued my car at £11,500 but soon upped it when I said no way am I letting it go for that!

A210AMG - I don't NEED an estate but it is very handy to have one and I probably would miss it.

Sweetpea - No I don't need to change cars, hadn't even considered it until the salesman phoned out of the blue!

It just seemed an offer too good to miss, but maybe not eh?

 

[Dryce]

It just seemed an offer too good to miss, but maybe not eh?

£5K to own the newer car for 2 years. With nothing left at the end.

What maybe £1500? (who knows - but say 2 services, brakes or tyres, additional VED) to run your car for 2 years. Car conservatively worth £7K at end.

So you end up paying 5K or ending up with net £5.5K on these numbers.

So the deal is notionally costing around £10K'ish unless something really bad happens where the warranty on the newer vehicle would have protected you or the balloon payment works out massively in your favour by some miracle.

 

[Colin_b]

A210AMG - I don't NEED an estate but it is very handy to have one and I probably would miss it.


It just seemed an offer too good to miss, but maybe not eh?

This is true, I think. an estate is just so useful at times. I'm a convert to them

I get my dealer ringing me when my SLK was three years old, saying time for a new one?

The old one is perfect, why swap £20k and the car for a new, uglier, but slightly cheaper to tax one?

 

[Doodi]

£5K to own the newer car for 2 years. With nothing left at the end.

What maybe £1500? (who knows - but say 2 services, brakes or tyres, additional VED) to run your car for 2 years. Car conservatively worth £7K at end.

So you end up paying 5K or ending up with net £5.5K on these numbers.

So the deal is notionally costing around £10K'ish unless something really bad happens where the warranty on the newer vehicle would have protected you or the balloon payment works out massively in your favour by some miracle.

Thanks for doing the maths for me, when you see it in black and white like that it's a no-brainer really isn't it?

 

[LTD]

£200 a month is a nice holiday each year

 

[Doodi]

£200 a month is a nice holiday each year

Yep, that's true. Think I'll keep the current car and go a nice hol instead

 

[Dryce]

Thanks for doing the maths for me, when you see it in black and white like that it's a no-brainer really isn't it?

Some people put a high value on peace of mind of having a new warranty or they want a better car so the heart rules.

Which is fair enough.

New(ish) E350 is probably a big step up from an E220. However, prices in the Approved Used stock lists for E's seem to be quite high at the moment.

 

[Rory]

£5K to own the newer car for 2 years. With nothing left at the end.

That's the crucial point, I think. A lot of people don't realise with these deals that they "lose" the equity in their current car (because it's used as the deposit), and then they hand over what seems like a reasonable monthly payment for 2-3 yrs, then at the end of the deal they have nothing.

 

[Doodi]

That's the crucial point, I think. A lot of people don't realise with these deals that they "lose" the equity in their current car (because it's used as the deposit), and then they hand over what seems like a reasonable monthly payment for 2-3 yrs, then at the end of the deal they have nothing.

Yes, that's true. When that fact struck home the £200 a month doesn't seem so attractive.

Apart from this latest dilemma, I do get caught up in trying to decided when to change car anyway. I've kept my current car longest of all my cars so far. I usually have been changing at around 3 years or so. I am concerned about keeping a car too long until it's not worth much then it is a bigger jump back up to a nearly new one.

 

[Dryce]

Apart from this latest dilemma, I do get caught up in trying to decided when to change car anyway. I've kept my current car longest of all my cars so far. I usually have been changing at around 3 years or so. I am concerned about keeping a car too long until it's not worth much then it is a bigger jump back up to a nearly new one.

The solution to this is to save.

You were offered a new car at £207 per month. That's got you thinking where you stand. But the fact that you were seriously tempted means that you obviously think that you can put by £207/month.

Saving doesn't change the cost difference on the deal - but it does effectively start the finance your next car in advance.

Most people only seem to see financing a car on the basis of paying out a monthly after purchase - not in terms of saving the equivalent sort of monthly in advance. But treating the car as a monthly cost and putting that aside while you keep your car for longer is not a bad way to give yourself more flexibility and leverage two or three years down the line.

 

[Doodi]

The solution to this is to save.

You were offered a new car at £207 per month. That's got you thinking where you stand. But the fact that you were seriously tempted means that you obviously think that you can put by £207/month.

Saving doesn't change the cost difference on the deal - but it does effectively start the finance your next car in advance.

Most people only seem to see financing a car on the basis of paying out a monthly after purchase - not in terms of saving the equivalent sort of monthly in advance. But treating the car as a monthly cost and putting that aside while you keep your car for longer is not a bad way to give yourself more flexibility and leverage two or three years down the line.

Yes but if I were to put away £200/month for 2 years then go to buy another nearly new car I would have £4,800 cash plus the value of my car to put towards the new one. But surely , for round figures, say my car is worth £15,000 now and in 2 years it's worth £10,000 my £4,800 cash will only add up to the value of things as they are now?? Sorry, I'm not too good with getting my head round figures like this, in fact it does my head in trying to work out what is best to do etc. Is it a case of swings and roundabouts?? lol

 

[Dryce]

Yes but if I were to put away £200/month for 2 years then go to buy another nearly new car I would have £4,800 cash plus the value of my car to put towards the new one. But surely , for round figures, say my car is worth £15,000 now and in 2 years it's worth £10,000 my £4,800 cash will only add up to the value of things as they are now?? Sorry, I'm not too good with getting my head round figures like this, in fact it does my head in trying to work out what is best to do etc. Is it a case of swings and roundabouts?? lol

The main answer to this is that depreciation on a newer car will normally be higher than your current car. So the moment you buy it the value has dropped.

In your offer this was in effect handled by the fact that you were likely left with nothing at the end of two years. So your 'depreciation' was the loss of the entire value of your current car over two years.

So your car drops from '15K' to '10K' over two years - that's £2.5K/year deprecation. That's not bad in the overall scheme of things. But that also assumes that your car is worth £15K now and £10K in two years. I doubt that it is as a trade in on a 56 plate. What the dealer has done is shifted the numbers in the deal so that it looks like you get a lot for your car and the adjusted the payments and end value to compensate.

 

[crockers]

As my old stepfather used to say before he died. "The best car is the one that's paid for". That was from an American too

 

[Doodi]

Ah well, this particular dilemma is over... the car has been sold to someone else.

Food for thought though, thanks for all comments and advice

 

[expat]

If you like the car you have, and it is paid for, keep it. You'll never beat depreciation with any car you have until it becomes a "classic" and starts working its value back up. Why complicate your life?