A few years ago, my car mad father returned from the auctions with a very presentable Mazda MX5 @£1,500. He swears by running an “old banger” as opposed to purchasing a new car, with previous auction purchases including a Toyota MR2, BMW, Fiat Abarth and numerous Fiat Puntos (our family car of choice). Intrigued by the idea, I thought I would examine in more detail the financial astuteness of following this practice.
For a comparison basis, I have decided to stick with the MX5 and consider the costs over the past 3 years. Similar models have retained their value and are still fetching around £1,500 online. The car has been very reliable and, other than £500 to sort out structural rust in sills, outlay has only been £300 for servicing. Wear items like tyres, wiper blades, bulbs etc apply to all cars, old and new, and have therefore been ignored.
Purchased new in 2013, the then current model of MX5 would have set you back around £23,500, while offering a similar appearance and ‘wind-in-hair’ driving experience as the auction house 2003 model. Factor in depreciation of 50% (not helped by the introduction of a newer model in 2015), finance costs of around £1,200, a £200pa higher insurance charge, higher servicing costs as normally tied into a main dealer, and the true cost of running new vs. old begins to widen.
If the cars were to be sold after the 3 year period, on the face of it my old man would have saved himself over £12k. There are obviously benefits to buying a new car, such as choice of specs, warranties, up to date technology, improved fuel efficiency and that sought after ‘new car smell’, however, it appears that there are significant savings to be made from buying a used car.
What’s more, choose your banger wisely and it could even make you money, with many pre 2000 cars now beginning to appreciate in value, such as the Ford Capris and Peugeot 205 GTI.Talk to Barnes Roffe today