New Car- Best value and Finance Rates

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Uber Geek

#1661712 31-Oct-2016 20:49

blackjack17:

I understand the cheap financing, but I've always thought cars (and all things that fall in value) should be one of those things that should be paid for in cash.

When interest rates are so low, saving up for something is almost pointless.

Mike

bluedisk

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Master Geek

#1662035 1-Nov-2016 13:54

If you are registered for GST then you get the GST back on a new car and with financing its a cleaner way to claim expenses back in the tax return. Plus with the added benefit of colour and trim choice, servicing deals and roadside assistance there's sometimes not much in it.

I recently bought a new car and would have been happy to have bought a newish version of the same car. The problem was there was no such car on the market when I was ready, and the dealer was having a run out sale. The only trouble was there was only one car left and it was my least favoured colour choice, black. But I took it as it was a really good deal with no other major costs to worry about for three years.

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tchart

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#1662049 1-Nov-2016 14:38

blackjack17:

I am curious why you would want to get a new car rather than near new considering how much you lose on depreciation?

a 2014 pulsar with 15,000 on the clock for $19,000

http://www.trademe.co.nz/motors/used-cars/nissan/auction-1183499777.htm

vs brand new for $24,000

http://www.nissan.co.nz/Cars-Vehicles/Pulsar-Hatch/Offers

You wont get 1.9% interest on second hand car.

Quick comparison

Second Hand

$19K at 12.95% (UDC) = ~$650 per month for 36 months = $23400

Brand New

$24K at 1.9% (Nissan) = ~$707 per month for 36 months = $25452

So yes there is ~$2000 difference for a brand new car.

Given you then 6 year car will not be worth $19K anyway, its a false economy buying second hand even if there are zero problems. There defintely wouldnt be $2K difference when the second hand car is 6 years old.

Edit added correct fees for Nissan

tchart

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#1662051 1-Nov-2016 14:42

PS unless you happen to put it on your mortgage you are likely to pay at least 12% interest probably more.

AA for example quote 9.95% to 15.95% but Ive never seen them offer less than 12% so I would say 13-15% is realistic for a second hand car.

tchart

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#1662053 1-Nov-2016 14:50

dclegg:

Last year we purchased a 2015 Mazda 3 (awesome car, BTW) for $27,740. RRP was $32,795. It had 70KMs on the clock, and we've always been treated as new car buyers with it, including full manufacturers warranty and 3 years free servicing.

So it might be worthwhile asking the dealer if they have any ex-demo models going for a discount.

The 1.9% is unlikely to extend to ex-demo.

We recently bought a new Suzuki (similar deal @ 3.9%) the offer did not extend to ex-demo or used.

Incidentally $27,740 @ 12.95% has pretty much the same total repayment as $32,795 @ 1.9%

blackjack17

1705 posts

Uber Geek

#1662057 1-Nov-2016 14:58

tchart:

blackjack17:

I am curious why you would want to get a new car rather than near new considering how much you lose on depreciation?

a 2014 pulsar with 15,000 on the clock for $19,000

http://www.trademe.co.nz/motors/used-cars/nissan/auction-1183499777.htm

vs brand new for $24,000

http://www.nissan.co.nz/Cars-Vehicles/Pulsar-Hatch/Offers

You wont get 1.9% interest on second hand car.

Quick comparison

Second Hand

$19K at 12.95% (UDC) = ~$650 per month for 36 months = $23400

Brand New

$19K at 1.9% (Nissan) = ~$707 per month for 36 months = $25452

So yes there is ~$2000 difference for a brand new car.

Given you then 6 year car will not be worth $19K anyway, its a false economy buying second hand even if there are zero problems. There defintely wouldnt be $2K difference when the second hand car is 6 years old.

Edit added correct fees for Nissan

If you already have a mortgage

Second Hand

$19K at 4.2% (bank) = ~$259 per fortnight for 36 months = $20,177

Brand New

$23K at 4.2% (bank) = ~$313 per fortnight= $24,498

Brand New

$23K at 1.9% (nissian) +$750 set up = ~$313 per fortnight= $24,442

Interesting that there is so little difference between bank and new finance.

The second hand is still $4,400 dollars cheaper and I wonder what the difference in resale would be after 6 years?

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dclegg

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#1662063 1-Nov-2016 15:09

tchart:

Incidentally $27,740 @ 12.95% has pretty much the same total repayment as $32,795 @ 1.9%

Assuming the loan was completed to the full term. We repaid the loan after a few months, and paid substantially less than $32795, even with the higher interest rate and loan exit fees.

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tchart

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#1662087 1-Nov-2016 15:14

blackjack17:

If you already have a mortgage

Second Hand

$19K at 4.2% (bank) = ~$259 per fortnight for 36 months = $20,177

Brand New

$23K at 4.2% (bank) = ~$313 per fortnight= $24,498

Brand New

$23K at 1.9% (nissian) +$750 set up = ~$313 per fortnight= $24,442

Interesting that there is so little difference between bank and new finance.

The second hand is still $4,400 dollars cheaper and I wonder what the difference in resale would be after 6 years?

Yeah that is surprising.

I imagine a 3 YO car vs a 6 YO car would be around around the $5K figure for the same spec - probably comes down to mileage though.

So I guess the advice is put it on the mortgage if you can otherwise take the cheap finance of the new car?

alasta

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#1662186 1-Nov-2016 18:31

The problem is that you are assuming that mortgage rates will remain at 4.2% for three years. My personal view is that these low interest rates are unsustainable.

Dingbatt

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#1662533 2-Nov-2016 11:13

Make sure if you do go new, you don't get sucked in by the 'on road costs' malarkey. Check out what a new car costs to register. That should be the maximum you are prepared to pay over the price. Personally when we bought a new car in the end of year sales last year, the first thing I did when the salesperson slid the quote over to me was cross out the orc. Those costs varied depending on the dealer anywhere between $500 and $1500. Full tank of gas, floor mats, a valet and a pre delivery service are part of the dealer presenting a vehicle ready for sale, not an additional cost to you.
If you have the luxury of more than one dealer belonging to a different parent company, then certainly get quotes from more than on, and ask them what there orc is for, item by item. $300 for a set of fitted mats when you can get them online for $80? Really?

And don't be sucked into 'paint protection'. Ask them if they have doubts about the quality of their paint, ex factory.

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#1662558 2-Nov-2016 11:34

I don't know if you were after best value car or best value new car. Very different. Best value car would be something about 3 years old. On a good day you could get 50% off new car price with not many Ks on the clock. Trouble with a new car is the moment you drive it out of the dealer's yard it's lost 30% of its value. Unless it's a Honda, then 20%.

geekbhaji

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Master Geek

#1662561 2-Nov-2016 11:39

joker97:

I don't know if you were after best value car or best value new car. Very different. Best value car would be something about 3 years old. On a good day you could get 50% off new car price with not many Ks on the clock. Trouble with a new car is the moment you drive it out of the dealer's yard it's lost 30% of its value. Unless it's a Honda, then 20%.

Its quite hard to find such cars these days, three year old cars are not near 50% off the actual price. Its usually 70 to 85% based on mileage.

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geekbhaji

222 posts

Master Geek

#1662585 2-Nov-2016 11:43

Dingbatt: Make sure if you do go new, you don't get sucked in by the 'on road costs' malarkey. Check out what a new car costs to register. That should be the maximum you are prepared to pay over the price. Personally when we bought a new car in the end of year sales last year, the first thing I did when the salesperson slid the quote over to me was cross out the orc. Those costs varied depending on the dealer anywhere between $500 and $1500. Full tank of gas, floor mats, a valet and a pre delivery service are part of the dealer presenting a vehicle ready for sale, not an additional cost to you.
If you have the luxury of more than one dealer belonging to a different parent company, then certainly get quotes from more than on, and ask them what there orc is for, item by item. $300 for a set of fitted mats when you can get them online for $80? Really?

And don't be sucked into 'paint protection'. Ask them if they have doubts about the quality of their paint, ex factory.

Noted you suggestion , Thanks mate.

Salesmen just dont allow you to think about some things and push extra costs on you.

Humor makes us humans !

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#1662589 2-Nov-2016 11:54

geekbhaji:

joker97:

I don't know if you were after best value car or best value new car. Very different. Best value car would be something about 3 years old. On a good day you could get 50% off new car price with not many Ks on the clock. Trouble with a new car is the moment you drive it out of the dealer's yard it's lost 30% of its value. Unless it's a Honda, then 20%.

Its quite hard to find such cars these days, three year old cars are not near 50% off the actual price. Its usually 70 to 85% based on mileage.

Let me have a look. What kind of car do you want? Make (Brand)?

geekbhaji

222 posts

Master Geek

#1662684 2-Nov-2016 13:40

joker97:

geekbhaji:

joker97:

I don't know if you were after best value car or best value new car. Very different. Best value car would be something about 3 years old. On a good day you could get 50% off new car price with not many Ks on the clock. Trouble with a new car is the moment you drive it out of the dealer's yard it's lost 30% of its value. Unless it's a Honda, then 20%.

Its quite hard to find such cars these days, three year old cars are not near 50% off the actual price. Its usually 70 to 85% based on mileage.

Let me have a look. What kind of car do you want? Make (Brand)?

Thanks mate, I am not much fussy about make/model, just need a reliable, low maintenance family car for family of 3.

Humor makes us humans !

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