Best Way To Keep Rolling?

[DJJH]

Hi all,

So I've had my IS300h for nearly a year now, and to be honest, I'm loving it more and more.

I'm on 3 year Lexus finance + 3 services. I put 5k down initially and I pay monthly. I didn't buy new.

Car was 6 months old with 9k on clock.

My question is, what/when is the best way to upgrade to another car, whether it be a newer version, an upgrade etc. without having to put down another large deposit? i.e. do i trade after 1 year? 2 years or is it better to wait 3 years.

Any help or past experiences would be greatly appreciated. Thanks

[Spacewagon52]

The longer you keep a car the less it depreciates. Only ever bought one new car - great car but I always regretted the money I spent (inherited money to be fair) as I watched it depreciate in value.

I have always tried (not succeeding in some cases) to work on a depreciation of £1,000 a year. The previous owner of my Lexus LS 400 paid £48,000 and sold it after 17 years - that is a depreciation of over £2,800 a year (not including inflation!).

Look at how much 2 and 3 year-old cars go down in value. If they are worth 50% of their new value after 3 years you are doing very well. Trade-in values are quite low - next time you get a trade-in value turn it around and say to yourself, "Would I buy my car for that price?" The answer would nearly always be YES - at that price it is a bargain!

It is a gamble buying any car (even new!). I have come to the conclusion, the less you spend the less you have lost if it goes pear-shaped. Also the more I spend the greater are my expectations of the vehicle. Buying an "old" Lexus has, once again, brought a big smile to my face. The car is not perfect but for the money it is fantastic!

When to sell? I would keep it as long as possible until it goes badly wrong or you get fed-up with it.

[rayaans]

Hey buddy, you're in the IS200/IS300 section here so the post will have to be moved. Dont worry, a MOD will sort this out for you.

Now onto your question - the best way to upgrade to another car is pay it all outright. It always works out cheaper as there is no interest involved. If the car is BRAND NEW, you can usually take up their £1000 deposit contribution offer if there is one and then pay it all off. You may have to pay interest for 3 months but that'll be negligible compared to the £1000 you're getting off.

Having said that, financially speaking, a BRAND NEW car is not a good idea. Take this into account - my wife's IS300h F-Sport with premium nav and rose red leather cost somebody £37k. 2 years later and 10k miles later, I bought it for £23950 and Im sure the dealer must have only paid £20-21k for it.

Therefore, from a purely financial viewpoint, it was good that you bought a 6 month old car as the majority of the depreciation is in the first year UNLESS that car is highly desirable like an F-Type Jag for example.

Trade in value is always £2-5k lower than private selling so you lose out but it ultimately depends on whether you want to do that.

To upgrade to a newer version, ideally you want to wait for a 6-12month old car HOWEVER, if the car is highly desirable, you may be better off just buying new if there is barely any difference in price between a 6 month car and a brand new one.

Also, around 3 years with the car is a good bet.

So, to recap what Ive said ill use the following example - 15 plate car Brand new = £38k. After 6 months = £29-31k. Buy it at and then use the car for 3 years and therefore, trade in, sell or whatever in 2018. That way you don't take a big hit when buying new and then whilst the car is in use, you won't get hit with silly depreciation.

HOWEVER, generally speaking, its best to buy outright, sell privately and keep the car for longer than 1-2 years.

[Cracksta]

sounds advice above.

I think the moment you sign the paperwork on a brand new car, you'll lose something like 10% (dont quote me on the actual figures) before you even drive it out of the showroom.

Buy used, buy it outright with cash........unless your a loaded then thats a difference story :)