Option 1: buying a brand new car
Every year, millions of people opt to buy a brand new car, usually on finance. It’s an amazing testament to the skilled marketeers of our established automotive brands, who manage to convince such vast numbers of people to part with their hard earned cash on something that will depreciate by over half its value in just a few short years.
For many people, buying a car is their second largest purchase after a house. Whether it be disguised with attractive finance options or extended warranties, the fact remains that a new car should be seen as a liability on your personal balance sheet rather than an asset.
The simple fact is, it continues to detract from your worth every day.
Option 2: buying a used car
So what other routes can you take? Well, another option is to buy a used car over five years of age. Although it’s going to keep depreciating, the first owner has taken the bulk of the decrease and is already sold on paying top dollar for radar guided cruise control, laser headlights, or whatever else their car company of choice has promised them.
Great, so you’ve grabbed yourself a daily-driver for a bargain… right? Kind of. The element of risk has now entered the game; we didn’t see too much of it in option one.
Maybe the previous owner was a hot-headed wannabe racing driver who red-lined it at every opportunity, or a dithering moron who couldn’t work out first gear from fifth. Soon enough that’s going to rear its ugly head, and the impending costly fix is going to be coming out of your back pocket.
On the other hand, the previous owner could have been a cautious fellow with a pro-active approach to maintenance, who has all the service stamps and receipts to prove it. It’s a bit of a lottery, but many people do their research and swear by this option to avoid the forecourt premiums, and they enjoy good value for money in doing so.
Option 3: buying an investment car
Once a car is around 15 years old it’s generally going one of two ways in the near future. To the scrapyard, or to be rescued by a car-loving enthusiast such as yourself, who will let it live out the rest of its life being admired and cherished.
Of course, there are actually very few cars worth saving by this age; most are just tired lumps of metal willing themselves towards the crusher, destined to be made into baked-bean cans or the latest designer lampshade.
All we need to do is identify which are worth saving from this gloomy demise… how hard can it be?
Actually it’s going to be pretty tough, and you’re going to need all the help you can get because risk is an even bigger factor here than in the previous option.
If you choose this option, it’s unlikely you’ll be buying one of these cars with the intention of racking up the miles. Wear, tear and mileage are the enemy of car investors worldwide, and you’ll need to keep yours feeling as fresh as the day it rolled off the production line if you want to sell it on for a profit further down the line.
Owning a car of such age demands a very different mindset; you now need to be spending time and money on preventing things going wrong rather than merely hoping they don’t.
Your car will be a part of the family rather than being a means-to-an-end. It will demand attention from you, it will test your patience and there will be days where you’ve just about had enough of it.
And on top of all that, your partner will despise it and do their utmost to make you get rid of it at every opportunity.
But… if you persevere you will have the most fruitful, rewarding and profitable relationship you’ve ever had with an inanimate object. It will be marvellous.
And if all of this sounds like you, then you’re in the right place. Welcome to the club, you’ll enjoy it here… there are plenty just like you.