I am never sure that spending a lot of money on a first car is wise - too many get written off and then the youngster/parents are left with paying essentially negative equity on a dead car
There are 2 ways to look at it.
First car, needs to be cheap to run so that youngsters don't have all their earnings tied up in a car. But buying second hand, can mean ending up with a car that requires maintanence regular. The car will be wearing out and may not be in peak condition. Some people will get rid of the car when its out of warrantly and requires MOT's and cam belt changes etc. Thats when you pick them up. If you are on a budget here, and are not a mechy type, this can prove as expensive as buying a new car over the same period. And it will need expensive services as cars need things at certain ages and mileages. You may skimp of servicing by missing them out, but is that good practice? Its okay if you are handy with spanner driving so I am not discounting it, just adding an alternative point of view.
The alternative
Buy a car straight out of a dealer, Bear in mind that I have specified a car from a manufacturer that will heavily discount up front, so a new 500 can be had for £6k, and possibly less if you are good. it will be more greener and more economical than and older car as well as safer. Has a warranty and will be MOT free for 3 years. All if these give peice of mind and help to reduce the running costs, although that is ofset by the credit costs! And this is assuming that the young lady in this case, does not have the money to pay for it outright! Dad may be treating the daughter and has set a budget, but that does not mean she may not add some! You might get the first 3 services in the price too.
And from an insurance point of view, some policies will insure a new car, and if its involved in an accident that the repair cost, as greater than 50% of the cars value, they give you a new car.
Considering the price this car can be had, an accident requiring £3k worth of fixing, will write it off under those circumstances. That kind of accident can easily be had with a rear end bump, pushing the car into another. Kind of accident new drivers often get involved in!So if we are going to have that inevitable first accident!!!
Some people can afford £6k for a car. they either choose to get a cheap new car, or an older 2nd hand car.
I think the object here is to find the best value for money, taking into account all of the criteria suggested, and I am 60% in favour of the fiat 500. Panda's are great too and they could be had cheaper, but I think the 500 will be a good seller and will also retain more of its value as it will be liked.
Expect to see numerous MINI's come up at FIAT dealers over this year!!!!
I am 40% in favour of a POLO type, as opposed to the Focus, as the focus does what it says on the tin, but they are not a car that you really care for, unlike first car. And that particular point is the 10% why I would go for new in these circumstances.
Either way, whatever is chosen, it will have similar running costs over the same period, but the 500 will resell about £2k or £3k in 3 or so years, A car thats £1900 now, wont.
It would be close in costs for either. Expect a car at £1900 miles to cost around £1000 a year in running costs (VW/FORD, French types, will all be similar at this age). compare that with a new one and the repayment terms, and the value it will retain, it will work out similar.
Cars do lose when they walk out of the showroom, but in this case, 25% of this car is not that much. And you may pay 25% more for a decent 2nd car, than 1 with higher mileage.
Whole life practical ownership costs, over 3 years, it will be close. I did think about it before posting. Which, for me, is very unusual!
And you get the one advantage when buying new, you get to chose all the options and colours. £1500 is a lot of money in anyones book, and I want it to be spent on something of value. Not any old tin shed any one of us can pick up, as its cheap motoring.
I guy a used to work with. He always went to a auction, and had a price of £300. He got whatever had a full, recent MOT on it, and never paid more than £300. His view was, if it lasted a year, it was cheap motoring, and if it past the next MOT he had save £300 that year.
I remember showing him the new car tax that was added to the SLK55AMG I had bought new!
Mind you, he did have a wife to pay for as well.
and a lot more to insure than a £1500 car? The new Fiat panda is a cracking car for around town (again not a motorway mile muncher) or the Grande Punto which has a 5 star NCAP rating - both can be had for sub 5k (probably 2-3k for the panda which is the same car as the 500 underneath)
although I sometimes wonder if he is trying to wind me up.
- the steering is very heavy).
