Any financial advisor will tell you that a car is the worst possible investment. That's also why we present you with four ways by which you will lose the least when buying a car!
A car is one of our biggest personal financial investments. Also investment, which always ends with a minus, since most cars are lost in the first 5 years between 50 and 80 percent its purchase value. That's why we reveal four fairly simple ways to lose as little money as possible when buying a car. And since money is your energy expressed in time and intellectual energy, it is necessary to manage it well!
So, how to behave rationally and economically when buying a car. In other words, how to lose as little money as possible when buying a car. In the write-up, we will cover both the purchase of a used car as well as the purchase of brand new cars!
Tip 1: Buy a 6 year old car with low mileage and first owner
Photo: Pexels / Lazy Artist
Six year old vehicles they really aren't the youngest anymore, but it's still good to know that Slovenes on average, we drive more than 10 year old vehicles (SORS data 2019). So if you can find one with around 100,000 kilometers on it, with an officially confirmed service history and the first owner, it can be a real hit. The rest of the value of such vehicles ranges somewhere between 30 and 45 percent original purchase value. So also until 70 percent less than the new vehicle is worth. Of course, everything depends on the original purchase value. The higher the value of the new vehicle, the greater the drop in value. The brand of the car also plays an important role in this. Less perishable brands, those that rank higher on vehicle reliability indexes, retain more aftermarket value. Models and brands, which are known to be more expensive to maintain, are generally subject to a greater drop in value. Therefore, for example, Japanese brands known for their durability maintain a higher after-sale value and lose less. Still others, including premium brands, such as BMW, but as a rule they lose more. Of course, it all depends on the model. Certain models such as misc roadsters and convertibles they lose less. Classic sedans and mass models, however, are much more.
The higher the value of the new vehicle - the greater the drop in value
Percentages are percentages and all cars lose. This is an indisputable fact. However, more expensive cars whose ownership costs are higher (registration, maintenance) lose higher percentages than those whose ownership is "cheaper". On average, cars lose 50.2 percent of their purchase value in the first 5 years. So, if you bought a vehicle worth 30,000 euros, you lost an average of 3,000 euros in value each year (Source: iSeeCars.com). And when the vehicle is 5 years old, it is only worth 1/2 of the original purchase price. It is interesting that, for example, the proverbial "best" car in the world, the Mercedes-Benz S-Class, suffered a loss in the first 5 years, amounting to as much as 67.2 percent, while the BMW 5 Series, which is also extremely popular in our country, loses as much as 67.3 percent. The data are indicative and "do not apply" to the Slovenian market, but they are comparable at current prices on online marketplaces such as avto.net.
HINT: It seems that the ideal time to buy a car is in its 6th year of age. For most vehicles, after 5 or 6 years, the period of financing, business lease, ... or other options expires. The owners, however, put these types of vehicles on the account of car dealerships when buying a new vehicle. There are a lot of these cars, and the prices are therefore more favorable. The myth that it is worth buying a 3-year-old used vehicle is true, but the real savings are with cars between 5 and 6 years old.
Tip 2: Buy a new vehicle that loses less
Photo: Jeep
If you are an enthusiast of new cars, then it is good to know that some car brands they retain their value better than the car market average itself. Also, certain car models have a higher aftermarket value than the brand average. Mainly because they are more desirable than average in the used vehicle market, for example. Or there are not too many of them and there is a greater demand for them. These car models retain better value. Thus, the Porsche brand is certainly one of those that best preserves its value among used vehicles. Among the cars that lose the least in the first three years are quite a few models - Panamera, Porsche 718, Porsche 911. We can add more to this group Volkswagen California, which is again one of those legendary models where the drop in price is bearable and the vehicle retains its value for a long time, or this drop is smaller than the automotive average. The excellent used sales value is also maintained by Jeep with this model Jeep Wrangler. There is, for example, the Mini brand, whose models are less subject to aging precisely because of their shape, so they retain their value quite well. Of course it's still here Mazda MX-5 and some other legendary car models, which represent an excellent purchase precisely because of their style and "historical recognition of the model". It has also been a good buy in recent years Ford Ranger, whose purchase price of a new vehicle has risen somewhat in recent years, causing Ford Rangers that are a few years old to lose remarkably little. Even the best-selling model in the USA - the Ford F150 pickup is known for its good value retention, mainly due to the high demand among used vehicles. For example, models also set such a standard Hyundai Tucson and Toyota Rav4, which the original buyers keep for a very long time. That is why they hold a rather high selling price.
Certain cars lose less
As we have seen in the lines above, the selling price of the vehicle is also influenced by the "cool" factor. Certain cars just stand out from the average and are more desirable in the eyes of customers. But we are ready to pay more for them when they are a few years old. Above all, it is about the image of the vehicle, which plays a key role. On the one hand, it is the image of quality that Japanese brands enjoy, or on the other hand, the "status" symbol and the cool factor associated with it. Of course, he often adds to all this market factor, which of course changes. Thus, hybrid vehicles retain their value better than classic vehicles. For example, the car as it is Peugeot 3008, which has won a multitude of awards, all the positives keep the value well above the average of this brand, which has also been known for models that have lost a lot of money in the past. They retain value well too small city cars, i.e. cars there up to the purchase value somewhere 15,000 euros.
HINT: Before buying a vehicle, check which vehicle models are the ones that lose less than average and are more desirable on the used vehicle market. In this way, you will not have any problems selling the used vehicle, but the price may be a few percent higher.
Tip 3: Buying a new electric car, but only as a legal entity!
Photo: Charlie Deets on Unsplash
Electric cars are already ½ cheaper than comparably equipped classic cars in the same car class, despite the fact that their sales price is between 20 and 30 percent higher. We already wrote about this at City Magazine in this article. This is also why we claim that by purchasing an electric vehicle, you will be in the year 2021 lost the least, among all new vehicles.
Electric cars are this moment until ½ cheaper only on condition, to buy them as legal person and you remain their first owner 5 years. Namely, companies are entitled to various tax incentives, which mean a concrete "tax” and subsidy savings if analyzed comprehensively. Therefore, the purchase of an electric vehicle is highly recommended for companies these days, or even up to ½ cheaper than buying a classic vehicle. Let's see!
Conditions under which the purchase of an electric vehicle will be ½ cheaper than a classic vehicle:
- Buy the vehicle legal person.
- The vehicle is subject to an eco-subsidy across the board 4,500 euros euros.
- An investment allowance in the amount is claimed for the vehicle 40 percent from the purchase price of the vehicle.
- A reduced credit rating rate is charged for electric vehicles 0.3 percent instead 1.5 percent for the use of the vehicle of an employee who uses the vehicle for private purposes.
- It can be obtained interest-free eco credit.
- Savings at fuel costs in the first ones 5 years ownership.
- Lower maintenance costs in the former 5 years.
- Larger residual value vehicles when sold after the expiration date 5 years.
The total savings are the same for an electric car that costs 50,000 euros and which you own 5 years huge. Tesla 3 is in the very beginning for 7,000 euros more expensive than a comparable classic vehicle, but the ownership and tax benefits are such that over a period of 5 years the company pays for this type of vehicle 1/2 the amount. In other words, the savings can be even greater. The monthly cost for an electric car is thus low 459 euros, while the classic vehicle company subtracts every month 1,054 euros.
The calculation is purely informative, but it clearly shows that we are not aware enough of the tax incentives that come with the purchase of an electric vehicle. You can like this company in 2021 we buy on really favorable terms. If the owner is a legal entity.
HINT: Tesla's electric cars are excellent at retaining value. Mobile.de claims that Tesla models sell the fastest among all used vehicles.
Tip 4: Buying a future car classic
There are regular cars and there are future car classics. So cars that left an interesting and lasting mark on the history of motoring. So there is often a moment in space and time when you can buy such future car classics for a pittance and sell them in a few years for more than you paid for them. Of course, this is not a car for completely everyday use. But, if you are buying a second or third car for your family, it is wisest to buy one that will lose the least! Or even better - even gained in value over the years. Of course, there are lists of such cars online, and we've even listed a few of them in this article. However, there is a rather general rule that such cars are bought between 15 and 20 years of their age. Of course, as much as possible in its original condition. So with original maintenance documents, few kilometers, no modifications and with proof of the number of owners, which should be as few as possible. Our most popular examples at the moment include: Mercedes-Benz 190, Suzuki Jimny, Alfa Romeo Brera, BMW Z3 M, Jeep Wrangler, Porsche 911 / 996, Volvo 850 R, Mercedes-Benz W124 E-Class, …. and we could go on and on. These are cars that even today fetch a thousand or two every year. And their future is extremely bright.
How to a future automotive classic
Has a car in the past stuck in your heart because of its design, its driving skills, or was it a movie car, as he drove it for example James Bond? Did you just like the car? Check the list of future car classics, find a well-preserved vehicle and bet on its future.
