You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
I need a car for 6-9 months. An acquaintance is emigrating and I might have the chance to buy their 4 year old semi-luxury SUV from them for about £35k, which is what they go for on Auto Trader. I have good credit bit this is about ten times as much as I can afford to spend on a car.
If I can sell it next year for £2-3000 less, I can afford it. But if used cars are finally about to plummet in price, I'll be screwed. Is the great market correction we have all* been hoping for going to come?
I had a 10 year stretch where I had great luck with cars. And the last 10 years every decision has been the wrong one...
*Maybe not all of us
I have good credit bit this is about ten times as much as I can afford to spend on a car.
There is your answer. And realistically - in a healthy market at the price point you are looking at annual depreciation is between 10 and 20% imo.
Lastly - buying from friend / acquaintance is the last thing I would ever do again.
#Edit - give us a clue about the car.
And in the meantime- browse :
https://www.pistonheads.com/gassing/topic.asp?h=0&f=255&t=2069615&i=300
and it's predessor.
Expensive cars are a mug's game. Don't get one unless you are really rich. You will regret it.
I have good credit bit this is about ten times as much as I can afford to spend on a car.
Then don’t buy it.
I'm at the exact opposite end of the spectrum with my £500 Porsche's and Volvo's!
I couldn't car less what happens to car prices but I think high used values are here to stay
My work colleague is the exact opposite to me and has lost 10x£ks on cars.
Spend as little as you need - cars are an expensive drain.
https://singletrackmag.com/forum/topic/porsche-500-bangernomics/
Would you consider buying a 35k car to use for 9 months if your mate wasn't selling one? Seems like madness to me. Just spend 3.5k instead.
This sounds like an absolutely bonkers idea!
So your mate is offering to sell you his car at the price a dealer sells it with warranty etc?
What is the webuyanycar price? That is closer to a mate's price IMO.
But in any case shelling out £35k for a car to own for 9 months is madness.
In my youth I stretched myself financially to buy a dream motorbike (GPZ900R if you must know) it was the archetypal ‘Friday afternoon job’, there was always stuff going wrong with it and it ended up costing me a fortune trying to keep it running, I sold it for less than half that I’d paid for it a couple of years later.
I learnt a valuable life lesson, I didn’t own that bike, that bike owned me!
I’ve seen lots of people in the years since do the same with cars, bikes, property etc that they couldn’t really afford.
buy something in your budget and be happy!
Four to five years is often high depreciation. A four year car will usually have a year of the manufacturer's guarantee left which is a good selling point. At five years you're selling a cars that's got no guarantee and is about to hit a big expensive service.
Edit to add: my current car is coming up to four and a half, I either trade in or sell now or keep it indefinitely. Madame Edukator likes it, I like it. The last time we made this kind of decision we ended up keeping the car 17 years.
Flippant answer aside, if matey is emigrating he won't sell his car privately - nobody is going to buy a £35k car privately without a warranty and/or credit facilities.
A private sale is going be considerably less than £35k - you just wouldn't risk buying a used complex high value SUV unless there was a considerable price difference to a dealership.
As mentioned above - find the Motorway/We Buy Any Car valuation and also look for realistic private sale prices that have factored the above into the equation. I'd pay <£30k which your mate won't be happy about.....And then knock a few grand off those prices for when they get desperate a few days before departure and they haven't sold it.
Smoke round in it for a year then sell it for a small profit/break even. No way would I be paying dealership prices and having to raise credit for it just to help them out or paying £2-3k for the luxury of a large barge for a year! I'd also consider my friendship if they were leaning on me to buy their expensive car just so they could emigrate.
2-3k for 6-9 months?
If you are going to sink that sort of money and expect no return, then rent something (short term lease) or buy something with decent residuals. Honda? Or something cheap.
Madness to buy a 35k car with the country in recession.
It's highly likely it will lose more than 2-3k over the next 12 months, just by virtue of being a 35k car now, so if you can't afford to lose more than that in 12 months then it's not the car for you
A car of that value might carry some hefty service costs.
I’ve never liked paying interest on a depreciating asset. It’s basically paying twice.
Especially if you can’t afford it.
Is there still a shortage of cars pushing used prices up?
Historically used car prices have been too low in the UK. Being able to buy a car for a weeks wages that’ll last for years was a bit unique.
Prices have already corrected down a bit but they're still down on value for money compared to when I last bought a 'nice' car in 2016.
Back then £13k got me a low mileage, high spec, 4 year old Passat estate.
That spec, age, mileage in the South is around £20k now. That's way more than inflation.
I really like RNP's approach but I would worry about taking his approach + my mileage + regular urban driving in environmental terms.
Will they crash? I hope so. I’ll be looking to buy in a couple of years, so a return to ‘normal’ would be nice
Madness.
Prices may reduce - but not by the 90% necessary to make this viable for you.
You can afford £3.5k on a car - go buy a car within your price range, treat it nicely, sell after 9 months.
I think the post is an attempted troll; if not, it's pointless.
What is a 'semi luxury' SUV? Not a recognised term in car sales.
Just no to buying a £35k car.
I thought they'd crash at some point in covid and I was dead wrong, so I guess no.
Prices may reduce – but not by the 90% necessary to make this viable for you.
If the prices crashed by 90% he'd be properly screwed!
Best buy loads are 6% per year, so you'll lose 2k that way
The average newish car loses 20% per annum in value so you'll lose £5k that way
So if you have an average year you'll be £7k down. Unless COVID kills the supply chain I'd be amazed if you only lose 3k.
Avoid
LOL at this thread..I'm sorry but 35k?
buy a cheap runner, like a 1.2 micra or whatever and hire a van for the odd occasion you need to haul stuff.
6-9 months is bangernomics territory, but it right and you won’t lose a penny.
Nobody buys a 35k car do they? Surely almost all of those will be owned by company lease schemes.
Nobody buys a 35k car do they
Have you seen the prices of new cars ? Even crap cars new these these days are £30k plus with a range of about 100 miles.
I had to buy a car 2 yrs ago and spent £38k screen price on a 2nd hand Merc E class . So far I still in equity on the loan thankfully too
If he’s a mate he’ll sell it to you for less than Autotrader price. You should be looking at the cheapest of the prices from WBAC and the like.
But, no, it’s a mad idea for such a short period of ownership.
And from what I see used car prices are dropping.
Do the decent thing,
While dropping your mate off at the airport, say you'll store said semi luxury car on your drive for £40 a week until he sells it privately. Say you'll take it out for a spin to keep it ticking over and show prospective buyers round it.
I’m at the exact opposite end of the spectrum with my £500 Porsche’s and Volvo’s!
Yes but you do have the skills, tools, workshop space and time to do, what would be to most of us, many £1000s of repair work. Love seeing you renovation threads BTW.
Car prices are driven by supply and demand hence why second hand got expensive in Covid as no new ones to buy. New cars are still not where they where so unlikely to crash.
If your friend lets you have it at WBAC price you will break even selling privately in 6 to 9 months if you look after it and don’t add too many miles.
I don’t think used pieces will crash.
In general people need cars. When times are hard peole will buy used, increased demand, or hang onto their car, reduce supply.
But no don’t buy a used for £35,000 car unless that’s the price point you’re aiming at.
OP - not being rude but it sounds like a fairly terrible idea all round due to a very high risk built into your affordibiluty / lack of contingency.
Only things I'll add are have you evdn looked at insursnce quotes yet? Depending on your circumstances din't be surprised if insurance quotes come back at minimum £2k / year for a £35k value SUV. Just Google the current stories with Range Rover insurance as an example! Build that mammoth cost into your wquation also.
Also worst case scenario, think what happens if the car gets stolen / written off and then you're potrntially offered an evdn lower market valuation in return. Could you financially shoulder that? Again, its a worst case type scenario but 'luxury SUV' are highly sought after vehicles for beung targeted for theft.
WBAC put my low miles 9 year old GTI at 17k last year. i looked the other day - it's now 11k. i'd say any adjustment is already in. 35k on a boxster? ok. 35k on A.N.Other **** bus. no way.
Does your mate own the car, or does he need to clear the finance?
They're not trying to use you as a way of getting themselves out of a massive financial loss are they?
If you're serious, it'd be WBAC lowest offer with a bit knocked off...but with depreciation and hassle I don't think it's worth your time/effort. You won't find many private buyers in 9mths time and will need to price accordingly.
4 years old and still £35k. That's luxury SUV territory. A fully specced self charging KIA Sportage is about £40k new and that's really fancy. I'm guessing you're paying a badge tax on a four year old car, I wouldn't.
Are you mad or rich?! My car has been stuck in the garage for 2 months waiting for a steering rack, it's going to be another 2 months before it turns up on a ship. So we bought a £1500 banger this week to tide us over, that's enough risk for me! About the only way to sell a £35k car is to a dealer/trade in/WBAC. Not many buyers going to give that much cash for a private sale with no protection. I did £12k once for a van and it felt like a big gamble!
Plenty of privately owned cars of that value.
Bought from whom though?
Evidently this idea sounded a lot better in my head than written on the page...
All I'm saying is that e.g. buying a £35k car and selling it for £32k would leave me in the same place as buying a £4k car and selling it for £1k, with added advantage of it not being ancient and a wreck. There are no cheap cars any more.
But I didn't think of the question of who I would sell it to at the end. It's mostly going to be traders.
Someone's got to be buying these £40k+ cars. A boggo Octavia is £28000!!!
But you £4k car is likely to be worth at least £3.5k a year later, it won't depreciate like the much newer car. You might even turn a profit!
In the very likely event you can't sell it privately, you are only going to get a trade price selling to a dealer so you'll probably lose much more than £3k. And what's it gonna cost for a new tyre or something terrible like a gearbox problem?!
All I’m saying is that e.g. buying a £35k car and selling it for £32k
If you bought this "£35k car" today, how much would a dealer buy it off you tomorrow (never mind further down the line)? Start there... if it's £40k... crack on... if it's already £32k or less... then there you are.
If it helps focus the mind, my mate bought an Audi S4 about 18 months ago for £32k had ‘faultless’ motoring in that time other than an expensive service.
When his new company car turned up, he offered it on motorway and got an offer of £24k, which he was OK with being as he’d used it plenty and the general market downturn. The buyers turned up and plugged diagnostic into it before completing, and it turned up an engine fault that the local Indy specialist said could be up to £8k to fix! It’s still sitting on his driveway now!
In a world where a Kia Frottage is considered a luxury vehicle, I seriously wouldn't bother. Am old enough to remember when luxury was a Bentley. Buy something well made at the point it just reaches the bottom of its depreciation curve. Only run what you can afford to fix or replace without it causing a crisis, anything else is a mugs game.
In a world where a Kia Frottage is considered a luxury vehicle
Fairly certain that's just on here.
You can roll it in glitter and stick lipstick on it but that kia ain't no luxury car.
Fwiw I wouldn't the 35k car especially as it's about to tick over the 5 year mark which marks the start of the second line of depreciation.
Years 1 is high. Once it starts needing mot it drops another good chunk and then 5-7 years it plummets again pretty badly as warranties ain't worth shit buy then.
And the old adege of luxury cars. If you couldn't afford it new. You sure as hell can't afford to run it old.
Here's a suggestion - buy the car off your acquaintance for the £2-3,000 you were prepared to spend, with the promise to send him the sale proceeds when you sell it in 6-9 months (or the insurance payout if it gets written off).
Lastly – buying from friend / acquaintance is the last thing I would ever do again.
That seems like a bizarre comment. If you can agree a fair price, and they're actually an honest friend, you've got far more accurate info about the cars history and any issues than you'd ever get via a dealer or other private seller.
If it goes wrong subsequently that's not on your friend - just bad luck.
(I sold my old car to another Mtb-er on here on the same basis. Most bizarre sale I've had was a set of Shokz earphones on Ebay and the buyer said they broke a few weeks later - I offered a full refund and they refused and said they were happy to suck it up)
What is it?
"But you £4k car is likely to be worth at least £3.5k a year later, it won’t depreciate like the much newer car. You might even turn a profit!
In the very likely event you can’t sell it privately, you are only going to get a trade price selling to a dealer so you’ll probably lose much more than £3k. And what’s it gonna cost for a new tyre or something terrible like a gearbox problem?!"
Up until last month I had a car that goes for £3-4k. Then it developed a transmission fault that's known to be £2k to fix (at best). I sold it to WBAC for £1300...
You seem pretty set on buying it so just crack on. The majority of responses are against doing so for very good reason. I think you're deluded if you think a 4 yr old car will likely lose so little in the next 6-9mths. What was it's list price 4 years ago? What did matey buy it for? What sort of vehicle is it ? (I'd sort of get your reasoning if it's a Macan)
If it’s really ten times what you can afford to spend on a car, where’s the other 90% coming from?
And at what cost? Please include that in your calculations. And insurance & servicing costs. Then do the comparison.
Also:
ll I’m saying is that e.g. buying a £35k car and selling it for £32k would leave me in the same place as buying a £4k car and selling it for £1k, with added advantage of it not being ancient and a wreck. There are no cheap cars any more.
Why do you expect one car to lose 9% but the other to lose 75% of their value?
As far as I can see you’re risking a massive potential downside, and presumably borrowing costs, for the chance to drive a car you know you can’t afford for 6-9 months. With no exit plan.
It's a no from me as well, your emigrating mate isn't doing you any favours with this deal, you are taking all the risk; if you need a car buy something in your price bracket not theirs. A Kia is the kind of thing that could easily do a heavy depreciation drop or just not sell, you would have to sell it privately to get a high price for it and so you need to be really confident you can flip it quick and at the price you want.
Buy it when it’s worthless?
No, good desirable cars will retain a decent baseline of value, which if its properly desirable and not just needless luxury it may even increase that baseline. The smart money's on letting someone else take the daft part of the depreciation curve out of it for you. Its been a while since simply being 'new' was synonymous with better, unless one has a particular penchant for vehicles that can be stolen off the driveway in 20 seconds flat without a key for example....
OP - what happens in 9 months when you don't need the car but you need the money from the sale and there's no interest in it at a sale price of £32,000, you start to panic because you really need the money now, you drop it again to £30,000 and there's still no interest? So it's sat there, still being insured (which won't be cheap) – do you stick or twist? How low could you afford to go as an absolute minimum and what happens if it still doesn't sell?
I honestly can't see anything but madness in this idea.
If you are planning on selling it privately then don't bother. From my experience people don't like spending big sums without garage back up. You'll end up selling it at PX price to a dealer.
If you are factoring selling it for PX price then it makes more sense. Still wouldn't though.
Your mate is either deluded or trying to rip you off. If I’ve read your post correctly he’s offering you the amazing opportunity to buy a car at the same price you could buy one from a dealer but with none of the protection that would offer - if he doesn’t sell to you for 35k his other option is WBAC for 30k or even less (we really need to know the make , model and spec here)
at least he can spend the money you’re borrowing to gift him on business class seats for his flught!
I think you should up your game and find something for £100k at least. Why not also offer to pay the dealer some extra on top?
It'll be worth borrowing the extra money if you need to, because in 6 to 9 months the £100k car will probably only have lost £10 whereas if you bought something, you know, sensible, for about £4k, then that will most probably have lost all of its value for no good reason.
And it wouldn't be anywhere near as exciting gambling only £4k either. Think of all the fun you'll have taking all that risk!
I also hear that investing in blockbusters is also a good idea at the moment
Yea, you're mad as everyone else has said.
I bought a Berlingo with 3 days MOT left for £625, and it did ~25000miles in 18months for work. That's what "I need a car for 9 months" looks like.
Why are you considering paying dealer prices for a private sale? If you really want to spend all that money, stick the details into WBAC and then knock loads off for every little scuff and chip like they would. That's the realistic private sale value.
OP: all the advice is either don’t do it at all - or do it for below the WBAC price if you are willing to take a risk.
Personally I think the best advice is say no. None of your man-maths adds up.
Sounds like a great idea to me. Will provide several highly entertaining threads over the next year or two. I say crack on! What could possibly go wrong?
Aside ftom multiple good reasons NOT to buy already mentioned, Your finance payments on 35k will be huge won't they? You'll also need gap insurance because any crash/knock etc and you'll get less than you paid. All sounds real risky.
Hadn't realised the OP was paying full whack for it! In that case you'd be insane and will lose lots of money.
Car depreciation curves look like this, mostly:
Big hit first, then steady decline, then it flattens out. So from 4 to 5 years it'll lose what, 5-7% looking at that. But if you buy an 8 year old car it's going to lose 2-3% n a year. BUT 7% of £35k is £2450, whereas 3% of £4000 is only £160. So it'll cost you about fifteen times as much to run the more expensive car. That's IF you don't get rinsed when trying to sell it. Selling cars is not easy at all, and when there's a lot of money on the line it's extremely stressful.
Just no to buying a £35k car
LOL at this thread..I’m sorry but 35k?
Are you new here? STW'ers don't bat an eyelid at 80k leccy SUVs never mind peasant transport.
That’s why I queried the “buy at the bottom of the depreciation curve” thing… The bottom is £0!
Arguably it never reaches 0 unless disposed of. Eventually if it's still functioning in reasonable nick itll - become rare and is reasonably desirable. The curve will rise again.
You'd probably get a year old EV for peanuts next year being how prices are crashing. ICE then not.
If it's 10x more than your budget, that'd suggest 3.5k....
So, 35k car, sell at 32k= £500 left
Whereas you keep the entirety of what you'd sell a 3.5k car for. Easily 2.5k I'd imagine, possibly all 3.5k.
Am I missing something?
Anyway, for the OP, I agree with most of the comments already given.
If your mate is selling it to you for less than he could get from WBAC and you were going to spend that much on a new car anyway then maybe it means you get something a bit nicer. You might have higher insurance and maintenance costs to take into account so you'd have to do the maths on that.
However, where are you going to get £35k to buy the car? If it's a loan what will it cost you in interest and early repayment charges? If it's from savings hours much will it cost you in interest? How much will the car drop in value, bearing in mind if you bought it today and sold it tomorrow you'd lose several £k anyway, so add age and miles onto that?
But if your "mate" is expecting you to pay him what you could pay a dealer then he's taking the mick!
All I’m saying is that e.g. buying a £35k car and selling it for £32k would leave me in the same place as buying a £4k car and selling it for £1k
Part of the problem with this logic is that a 4k car is highly likely to sell for 4k still within the next year. Unless the gearbox falls out it'll probably be 10 years before it gets to 1k. That's how the depreciation curve works.
A 35k car could be worth anything between 25k and 40k. Better trying your luck with Bitcoin.
Edit: I missed page 2 of this thread 🙄
What will prospective buyers think when they find out you’ve had the car for only 9 months? What fault is he hiding/ expecting to be getting rid so quickly?
Bought from whom though?
Plenty of sources, new, used, trade, private. I sold an M2 privately recently for £33k.
That’s why I queried the “buy at the bottom of the depreciation curve” thing… The bottom is £0!
If you look at the slope from 8 years on, it’s way less. So lower rate of drop, and from a lower start so way less in £££ terms.
Yes, you drive an 8-10 year old car. But I’m ok with that. My current car is 9 years old now and will need a cam belt next year. I’m planning to do that and keep it another few years.
All I’m saying is that e.g. buying a £35k car and selling it for £32k would leave me in the same place as buying a £4k car and selling it for £1k, with added advantage of it not being ancient and a wreck. There are no cheap cars any more.
There are still 'cheap' cars it's just they're £2k where they might have been £500 five years ago. The definition of cheap has just been recalibrated.
If you want a fancy toy and can convince yourself of the man maths then fine, slap down your entire budget on a finance deposit and spunk a proportion of your income for the next year on something you don't really need but satisfies some urge to own a new car. If you just need a runabout for a year or so, go find a decade old Corsa/fiesta/107 within in your budget.
Whoever buys your mates SUV will almost certainly be out of pocket on the deal, maybe they can afford that, maybe the badge/trim/performance matters more to them than their money, either way I don't reckon you're the target market, you're just day dreaming about a luxury you don't actually need...
Ok now read the thread in context of OP , not just buying expensive 2nd hand cars
Some special cars won’t depreciate much, if at all , let’s say a Caterham 620r. We also really wanted a BMW X1. New prices were are nuts, 2nd hand have really held their value
However OP how are you financing this £35k car? I hope it’s cash , on a loan that size the first year and a bit will just be paying the interest off. After 9 months you will have no equity against the loan.
Tax will be in excess of £500 per year. If it’s a Land Rover with easy access central locking, good luck getting insurance!
I bought a £38k Merc cause it’s a big safe comfortable car to rack up 1000’s of miles over the next few years taking my son to football matches. Would never have spent that kind of money for 9 months!
Well I would have 2yrs ago when loans were cheap. I’d have bought a Caterham 620r