Gidday Scarps
Maybe we should start a new thread called:
Estimating the serious cost of owning and running vehicles?
Cheapest car I ever owned was a mid/late-1980s Mitsubishi Colt. 23.5 cents/km, cradle to grave, not counting the value of the spares I took from it for Number 3 Colt ... That does include everything: fuel, servicing, repairs (boy, did it need lots of them ... ), tyres, rego, insurance, depreciation, loss of interest on our money, opportunity cost. The reason it was so cheap was because we bought it second hand, so the initial owner had paid heaps per km in depreciation that we didn't have to pay ...
The next cheapest was my '93 Subaru Impreza at around 33.5 c/km. This was bought new, and was almost completely tax deductible to my businesses (80+%). One has to keep impeccable records for this. It was sold after nearly 18 years and 236,000 kms. This calculation does not take the tax advantages into consideration.
My current car is a s/h 2006 Forester. It was bought with 100K kms on it in December 2011. Since the car is good for around 300K kms or 20 years (whichever comes first), it had around 2/3 of its mileage and life time left in it. Even depreciating it from new to the price we paid for it, the previous owners had paid around 24 c/km in depreciation from its delivery price (nearly $24,000 ...
). Of course, they would not have received anything like that amount when they sold/traded in the car.
Same deal with my wife's 'new' car. 2009 Forester bought s/h, not quite 3 y.o. with 61,000 kms on it (i.e. about 80% of its useful life left in kms and years). The initial owners had paid out some $18,000 in depreciation (same deal as above), about 29.51 c/km.
These depreciation costs "paid" by the initial owners (both were previously one owner cars with delivery at about 5 kms) are costs that we are "exempted" from paying.
It can easily be seen that depreciation and loss of interest on one's money are the single biggest cost in purchasing any car. Buying new often means that the depreciation is 20-25% from the moment one leaves the dealer's yard. This is why I say to work out the actual loss of value on an year by year basis. By the end of year 5, almost all of the car's value is gone in depreciation. However, the car is still practically new (usually), and will give one many years of trouble-free service at small cost, just so long as one is not silly enough to sell it at this point ...
Of course, there are always other costs associated with buying s/h cars. Usually tyres, major services, the occasional repair, etc. Even with a complete history there are unforeseen additional outlays. Full 4 wheel alignment and body straightness check with the first set of new tyres is one such expense.
My car needed a major service fairly promptly, and a new set of struts/springs at the rear (a known problem with the Subaru self-levelling suspension). SWMBO's needed a complete brake job at a bit over 80,000 kms (new pads all round; discs skimmed; fluid replaced). I also replaced the tranny oil (5MT/DR) as its condition was an unknown that I wasn't prepared to trust to luck on. Ditto the rear diff oil.
I always factor an estimate of these "unforeseen" costs into the s/h purchase equation. I also buy cars that have substantial warranties from reputable dealers (at a premium). However, most dealers don't know what they have with Subarus these days, so one can get very well equipped cars for ordinary prices, if one knows what one is looking for/at. SWMBO's car was priced as a base model, and the dealer only realised their mistake when transcribing the details of the car for the registration/title transfer. As the salesman said "Oh well. Too late now". It was the top end N/A with the Prodrive Sportshift 4EAT auto
. I also grovel under the car and run all the seams with my fingers, look for any signs of abuse, etc, etc.
Interestingly, both cars are insured for an agreed sum that is much the same as the price we paid for them about 2 and 2.5 years ago respectively. Our insurer also agreed that we got two good ones.
Just some thoughts.
