How do you think about depreciation / choosing kms when buying used vehicle.

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phrozenpenguin

840 posts

Ultimate Geek

#320282 25-Jul-2025 22:28

Looking to understand how people consider depreciation in relation to car purchases (used vehicles), or consider the amount of km's done in relation to pricing. I rarely buy (or sell) vehicles, tend to keep them for a long time, and do approx 15,000km/year. How would you look at the numbers below, examples for two different vehicles at two different price points. Appreciate any thoughts and explanations.

Example 1

Basically same vehicle, minor spec differences, lower km version is tidier:

$60k for 60,000km version or $40k for 130,000km version

(New approx $130k)

Example 2

Basically same vehicle, newer version a bit tidier:

$28k for 2021 with 100,000km or $35k for 2023 with 40,000km

(New approx $60k)

gzt

17105 posts

Uber Geek

Lifetime subscriber

#3397207 25-Jul-2025 22:42

Add a model year for your example 1.

Later vehicles tend to come with new features and safety improvements.

Lux model or base model makes a difference. After a few years secondhand lux model tends to be similar price to secondhand base model. Tempting if you want the lux and the newer base model lacks features.

phrozenpenguin

840 posts

Ultimate Geek

#3397213 25-Jul-2025 23:17

Example 1 both vehicles are 2019.

Trim level / features the same, basically like for like cars with significantly different mileage.

TwoSeven

1623 posts

Uber Geek

Subscriber

#3397269 26-Jul-2025 11:05

For me, when looking at a vehicle (apologies for the long answer to a short question)

I first set what my needs and wants are (usage and feature and style wise). I then set my budget limits and if considering terms the maximum term period (say 2 years) and the length of time I would expect to own it before needing a replacement (say 10 years).

in the examples, for example 2 - the price difference is marginal, so I would choose the one I liked the most.

in example 1, the price for me is not marginal, so I would lean towards the lower priced unit - with a caveat that there is not a slightly lower mileage (100k or lower) unit available at a marginal increase in price.

in comparison between example 1 and example 2. The lower priced unit in ex1 is marginally priced over the higher priced unit of ex2. So I would consider, wants, needs, utility and budget and which one I liked the most.

In terms of the depreciation, both look like they are at 50% of original price. One has got there slightly faster, however, it was originally priced in a different market segment (more consumable I think). In this case for me, I would be leaning towards how they meet my criteria (wants and needs) and the utility they provide going forwards.

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Eva888

2428 posts

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#3397271 26-Jul-2025 11:34

I asked this very question to an AA adviser online through their website when trying to figure out which way to choose. He responded to buy the latest model I could afford and not worry as much about the mileage.

Interestingly we bought a Toyota Aqua which actually became worth more than what we bought it for mainly because it is low maintenance. It being the country’s most stolen car is another story.

richms

28168 posts

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#3397273 26-Jul-2025 11:42

I look at how many WOFs I should be able to get out of one before it fails on something that writes it off. I would never be spending that much on a used car.

Richard rich.ms

cruxis

480 posts

Ultimate Geek

#3397288 26-Jul-2025 13:52

I have always followed the 10% rule, Spend no more than 10% of your annual gross income on the purchase price of a car.

Minimizes depreciation risk: Cars lose value quickly, especially new ones, preserves capital, avoids lifestyle inflation.

From all the cars I see on the road, either alot of people are earning 500k$+ per year or are not financial minimalists....

eracode

Smpl Mnmlst
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#3397291 26-Jul-2025 13:58

I have bought countless cars over a 50+year period and it’s never been something that I have thought about seriously when buying.

Sometimes I just sit and think. Other times I just sit.

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mudguard

2114 posts

Uber Geek

#3397295 26-Jul-2025 14:55

Km's can be misleading too. For my job we have to purchase our own cars, there are strict rules on car types etc.

So I'll do 40,000km per year, replace after five at 200,000, serviced almost three times per year, tyres every eighteen months, mostly open road driving and generally the only wear and tear is the driver's seat and the front splitter/bumper from from road works.

They're always worthless after five years so have tended to give them to family.

Basil12

110 posts

Master Geek

#3397296 26-Jul-2025 15:12

Eva888:

I asked this very question to an AA adviser online through their website when trying to figure out which way to choose. He responded to buy the latest model I could afford and not worry as much about the mileage.

This is my preference - if buying at a particular price then newer with high mileage. Two of our current cars were ex-rentals with circa 200,000 km on the clock - they continue to run well with no issues.

My BIL takes the opposite approach of older cars with low mileage and has been bitten a couple of times.

alasta

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#3397371 27-Jul-2025 07:36

cruxis:

I have always followed the 10% rule, Spend no more than 10% of your annual gross income on the purchase price of a car.

Minimizes depreciation risk: Cars lose value quickly, especially new ones, preserves capital, avoids lifestyle inflation.

From all the cars I see on the road, either alot of people are earning 500k$+ per year or are not financial minimalists....

Your income is irrelevant when optimising the capital outlay against operating costs. Your cost of capital is what matters which, for most people, depends on whether you have cash and whether you have a mortgage.

Asteros

252 posts

Ultimate Geek

#3397414 27-Jul-2025 15:30

mudguard:

Km's can be misleading too. For my job we have to purchase our own cars, there are strict rules on car types etc.

So I'll do 40,000km per year, replace after five at 200,000, serviced almost three times per year, tyres every eighteen months, mostly open road driving and generally the only wear and tear is the driver's seat and the front splitter/bumper from from road works.

They're always worthless after five years so have tended to give them to family.

Do your family members find that the cars still run well under their ownership as long as they are maintained according to the manufacturer's specifications? How much longer would they be economic to run? I'm curious because next time I might change to a newer car with higher mileage.

pdh

339 posts

Ultimate Geek

#3397424 27-Jul-2025 16:48

I don't think this can be reduced to a simple formula.

It's made more complex by bumps in the service cost...
Some are predictable - some are black swans.

Eg: Some cars need a new cam belt at 100 KKm - some have cam chains with a much longer lifespan.
That's a predictable cost and will affect a lower mileage car's value to you.

I've just had an unexpected rust issue (at 7 years, 95 KKm).
That was fixed with 4000 $ worth of abrasives & epoxy paint.
I see that as a less-predictable issue - and more related to years-old than mileage.

mudguard

2114 posts

Uber Geek

#3397426 27-Jul-2025 17:16

Asteros:

mudguard:

Km's can be misleading too. For my job we have to purchase our own cars, there are strict rules on car types etc.

So I'll do 40,000km per year, replace after five at 200,000, serviced almost three times per year, tyres every eighteen months, mostly open road driving and generally the only wear and tear is the driver's seat and the front splitter/bumper from from road works.

They're always worthless after five years so have tended to give them to family.

Do your family members find that the cars still run well under their ownership as long as they are maintained according to the manufacturer's specifications? How much longer would they be economic to run? I'm curious because next time I might change to a newer car with higher mileage.

I guess it depends. They've both been kept, I'm keeping my last one, it's now at 250,000kms. It's difficult on the one hand, as I've seen how some treat company/rental cars, but because these have always been mine (paid for and insured), I've treated them as such so they've always finished in good condition with the exception of cosmetic stuff like paint chips, which I simply gave up worrying about because of the sheer volume of kms I would do. The last two have been Toyotas, but colleagues have had more exotic vehicles but the running costs usually forced the change, my wheels were always smaller, some colleagues much, much bigger so not only more expensive to buy, but more prone to flats. Even some wheels ruined by potholes.

Would I buy a high km high performance Euro saloon? Probably not. But a Camry that's five years old with 200,000kms and full service history. Maybe. Not much stop start driving in that time frame!

Radiotron

180 posts

Master Geek

#3397437 27-Jul-2025 20:16

If there are two comparable vehicles to choose from, maybe a year or two different, lets have a closer look. Service records - has one got all the stamps at required intervals, or has someone been lax with simple stuff like oil changes. What's the interior like, tidy upholstery, no scuffs and dings on the plastics, or has it been used as a mobile bin? Still got it's load cover if a hatch or wagon? Outside, and signs of repair/repaint? I'd go with the one with higher ks and good records, and some care taken. Just some points to consider. Own vehicle is old and Japanese, fair wear and tear but maintained at ~230,000kms. Will be tough to replace.