Apologies for the following long ramble about buying a car.
The costs of cars (Do I even need one?)
My prolonged hunt for a new (used) car got me thinking about how much they have cost me… and how long I’ve kept them.
My first car was a 1993 Mitsubishi Magna (pictured above), which I bought in 1998 for, as far as I remember, $11,800. (In 2018 dollars this is about $19,600)
In 2008, by the time it had 215,000 kms on the clock, it was only good for scrap when I sold it, getting back only about $250.
My second car was a 2000 Holden Astra, which I bought in 2008 for $10,990. (In 2018 dollars this is about $13,900.)
At the time it had 117,000 kms on the clock; ten years later it’s now at 180,000, and is basically worth almost nothing, which is a bit annoying as about a year ago I spent $500 on brand new tyres for it.
So basically, the two cars I’ve had have depreciated by about $1100 per year.
What other costs? Insurance roughly $400 per year (though it used to be higher when I was younger). Rego about $800 (this is rising, not reducing).
Petrol: I fill up about 4-6 weeks. Looks like I spent $518 on fuel in 2017.
Maintenance and repairs? So far since the start of 2017 I’ve spent about $1600. This is probably going up as the car gets older, so let’s guess an average of $600 per year.
So in a year, costs of about $3400, over double the cost of my annual Myki fare.
With average annual car travel of about 6300 kms (which is under half the Australian average, by the way) that’s about 54 cents per kilometre.
My usual driving pattern is that I use the car on the weekends, but rarely during the week. Mostly those weekend drives are around the suburbs, but a few times a year it’ll be a longer trip to visit relatives in the country.
What if I didn’t own my own car?
The only car share scheme in my area that I know of is Car Next Door – vehicles cost about $20-30 per day plus about 33 cents per kilometre.
Based on my annual kilometres, that works out to be roughly 20% more than paying to own my own vehicle. If my weekend drives were occasional, it’d probably be cheaper, but not if driving a bit almost every weekend.
Of course if using car share, you’re likely to make more of your trips using other modes. Countering that: my sons are about to learn to drive, so demand for a vehicle may go up a bit.
So for now, I’m thinking I need to continue owning a car, at least until PT is so good that the PTUA has no purpose!
What I want in a car
So I got to shopping. What did I want?
- 5-star ANCAP rating – Nothing gets you thinking about safety like your offspring learning to drive
- High used-car safety rating if an older model
- Automatic — after 20 years of being intimidated by hill starts, I think I’ve had enough of Manuals (and my sons don’t seem interested in learning on one)
- Cruise control for country driving
- Something a bit bigger/roomier than the Astra, but not too big, so it’s reasonably fuel-efficient. Small to medium-sized, while noting that small cars are now about the size of that Magna I used to own
- Reliable/as new as possible, of course. (Just to filter down the options, I decided to stick to Japanese brands, as a synonym for reliability)
- Preferably white, it’s meant to be safer
- Nice to have: alloy wheels make the whole car a bit lighter, which may be more fuel efficient, or so they tell me
- I’m quite enamoured of indicators on mirrors. Possibly they are more visible to pedestrians, but in any case I just like them. I’m not sure why. (Apparently they’re officially referred to as “door mirrors with integrated turn indicator”)
- Daytime running lights are now a mandated European standard, apparently help safety, particularly with visibility to pedestrians. (I have fog lights on my current car. I don’t think I’ve ever used them.)
What would fit the bill?
Apart from HowSafeIsYourCar, you can also peruse the full MUARC report, though it’s a bit hard to read:
Working out the costs of motoring, above, especially the real costs of purchase back in the day, and the money lost in depreciation, made me feel a lot better about shopping for a car in the $15,000 range, to get something as new as possible, and of course with a 5-star ANCAP rating.
After talking to relatives, I concluded that everybody likes the car they drive. Stepfather likes Subaru; sister likes her Mazda 3; cousin likes his Mitsubishi Lancer. (All Japanese brands. Hmm.)
After noting the high safety rating, I did start looking at Subaru Impreza for a while, but there aren’t that many of them about for sale, and you have to spend well over twenty grand to get an almost new model with those nice indicators on mirrors and daytime running lights. Not that they’re essential by any means.
I was also a little nervous about reviews which remarked that Subarus can be a little fussy on maintenance. Which means to minimise risk it’d be a pricey dealer service every time.
So, back to the Carsales web site to do some more searching and researching. (By the way, the Carsales mobile web site lets you search for specific feature in a car, such as Cruise Control. I can’t see that feature on the desktop/standard web site.)
I just bought a new car
While out for a walk the other morning, looking at various cars I saw along the way, I wondered:
Considering I spent over $19,000 (in 2018 dollars) on my first car, back when I had relatively little money, what about upping the budget a bit so I could stop compromising so much and get everything on my list?
I am lucky enough that I can (just) afford to do this.
An ad caught my eye: a demonstration model 2017 Mitsubishi Lancer for $18,500 (drive away price). Retail price for the 2018 model (in automatic) is $21,990.
I like the size and the style (though I could do without the “bum enhancement”).
$18,500 is more expensive than I’d like, but let’s look again at the maths:
- Servicing on a used car could easily be $500-800 per year, and is often wildly unpredictable, especially the older the vehicle gets. But many brands of new car have capped price servicing. In this case, it’s a maximum of $230 per year for the first three years, so potentially a saving of at least $750 over three years, but even beyond that, repairs are hopefully going to be cheaper on a newer vehicle. (Plus warranty.)
- A new car also comes with a full year of rego, saving up to $800 — many of the used cars available only have a few months
- It’s new, so there’s no need to pay for a pre-purchase inspection, saving about $225-250
- It also comes with four years of roadside assistance, saving about $50 per year (for budget roadside assistance companies) to $105 (the base level for RACV) per year
So in the first four years, potentially a saving of around $2000. And given how much I hate buying cars, I can keep a brand new car for longer.
Suddenly buying a discounted demo car at about $18K seems not a bad proposition compared to a used car at $15K, so I went and test drove it. I quite liked it. It seems odd that the Lancer is being discontinued (and not replaced) at the end of 2018.
Anyway, I decided to go for it. Although it was a demo car, the dealer said it’s actually brand new, sitting in a holding yard somewhere until it can be delivered.
Trade-in? Worth almost nothing, unfortunately, a couple of hundred dollars. But I knew that going in, so at least I wasn’t disappointed.
But we did that little haggle dance around the final “changeover” price, and I did manage to get a bit of a discount, and floor mats thrown in.
The main guy handed me over to a lady who organised payment and delivery, and also offered some extra options like tinting, paint protection… They made the mistake of giving me a minute or two to Google and find this Choice article: Useless car extras revealed, leading me to opt out of those.
So anyway, I’m getting a new car. And not just a new car, but a new car.
It arrives in about two weeks.
Hopefully by the time I’m done with it in a decade or more, electric cars will be plentiful and cheap, and/or public transport will be at a standard where I don’t need to drive regularly on the weekend.
- Niggling doubt: rather than a sedan, should I have bought another hatch? Will I be cursing myself the next time I need to bring home flatpacks from Ikea? Mind you the specs say it does have the 60/40 split folding seats
- Of course, having been researching cars for months, every online advert I now see is for cars.
PS: This crash test between a 1998 Corolla and a 2015 Corolla shows the value of newer cars with improved safety features:
…That said, it’s notable that older cars often have poor safety ratings now, but did well in ANCAP tests at the time. They don’t have the 1998 Corolla ANCAP results still available, but the 2009 model scored 5/5 at the time, but only rates 2/5 now based on accident statistics.
22 replies on “I finally bought a new car”
Enjoy your new Lancer, it’s a solid car with proven reliability. Don’t worry about it being discontinued – it has the same 4B11 engine and CVT as the ASX, 2l Outlander and a zillion other Mitsubishis out there, so parts and service won’t be an issue.
Sounds like you had much the same experience as us. Prior to now, every car we’ve owned was over 10 years old when we bought it. But this time around, we went for an ex-demo Yaris for much the same reason you did (price competitive with second-hand options, good life expectancy and availability of fixed-price dealer servicing and roadside assistance).
We’d been doing without a car for a while, but when you live in the mid-north and work in the western suburbs you can only put up with lousy public transport options for so long.
Always go for as much as you can get with the extras. Really, how much does it cost to make them.
I received headlight & bonnet protectors, 4 side windowshields and front & rear carpets for free when I purchased my new Kia sportage a few years ago.
Congratulations on the new car. I remember when you bought the last one about the same time I moved to Australia in 08. I bought my dealer demo X Trail in August 08 and I still have it with about 64,000 KM. I saved about $10,000 since it was an 07 model and a demo. I don’t drive all that much and the car is still in excellent shape. I did put a bit of money into it this year with new brakes, struts, tires, and a battery. I plan to keep it for as long as I can.
“Something a bit bigger/roomier than the Astra, but not too big, so it’s reasonably fuel-efficient.”
Interestingly small cars often compromise on the aerodynamic shape and many brands have better fuel efficiency in their larger bodies (comparing the same engine for instance). But thats all aside since you drive so few km and chose a hilariously inefficient vehicle in the end.
@John, yeah there’s something comforting about a car design that hasn’t changed in years. They’ll have ironed out all the problems before it gets to me.
@CC, yeah perhaps some good advice is to research extras like that and identify which ones are the most useful. I have no doubt as to the usefulness of floor mats. Not convinced on headlight/bonnet protectors, but I’m prepared to be convinced.
@Jed, if you’ve done 64,000 km in ten years, you drive about the same amount as me.
@meltdblog, hilariously inefficient? Really? Looks to be roughly about the same (10% either way) as an Astra, Cruze, (non-hybrid) Corolla, Focus or Impreza.
I have my doubts on the aerodynamic effectiveness of the spoiler though.
I’m thinking of the efficient VAG and PSA group vehicles which lead the fuel efficiency market. Sticking to petrol auto cars without getting expensive and keeping to larger bodies, comparison combined consumption figures are:
Hyundai i30, 7.5l/100km
Mitsubishi Lancer LS, 7.4l/100km
Toyota Corolla Sedan, 6.4l/100km
Ford Focus, 6.2l/100km
Skoda Octavia Wagon, 5.2l/100km
Citroen C4, 4.9l/100km
Skoda Fabia, 4.8l/100km
The federal government put up http://www.greenvehicleguide.gov.au which makes it a little quicker to compare the details. Its an interesting balance and you’ve probably got a great car for your needs, but its far from fuel efficient even in its price/size bracket.
Thanks for that. I should have checked the GreenVehicleGuide web site when I was researching – instead I used the green rating listed on CarSales, which on reflection is a little vague.
I would note that the Fabia is a much smaller car, but the C4 is a similar size, yet beats the pants off anything else in fuel efficiency… however Citroen only currently seem to sell the C4 Cactus or Grand C4 Picasso in Australia, which look like quite different vehicles, and appear to start from about $10,000 more than I paid.
For that amount of money, I could go for a Prius or other Hybrid, but I couldn’t possibly justify the cost given how little I drive. But it comes down to the point noted earlier: you can keep your transport emissions down by driving an efficient car. But for really keeping them down, you can drive less.
Completely agree spending more on a Hybrid is a waste of money if you drive so little anyway.
What about the Kia Cerato? Currently $19,900 drive away (assuming you couldn’t get a better price) for the run-out model.
The greatest thing about Kia’s is the 7 year unlimited km warranty. They also come with 7 years capped price servicing. The servicing cost is also not linked to price rises by CPI, its genuinely fixed from the time you buy.
They are every bit as good as a Japanese car, only better value. Korea is the new Japan! Although I still prefer Tokyo to Seoul.
@Adam, yeah I did look at the Cerato actually. 7 years capped price service is excellent.
A bloke down the street just got a Kia Stinger. Looks like these go from about $50 grand! He said he decided to treat himself, but it took 6 months for it to arrive!
Too much car for me.
I used to live in Glenfield in western Sydney for my previous job, and I drove a Mitsubishi Magna 2003, which I bought in 2013 for $5000. It was rather inefficient, considering that I was the only person driving to/from work (which was a necessity as it was the equivalent of, say driving from Pakenham to Koo Wee Rup in outer SW Melbourne). It also needed quite a bit of repairs (twice per year). It was pretty stable, which helped when I had to drive for 20kms to work.
Now I’m living in Chippendale (think Carlton or Richmond), with my main current job in the CBD, with no need for my car, and using my bicycle or the nearby bus/train, and it’s making better financial sense for me.
Good choice Daniel! RACV says it is the 2nd cheapest car in its size to own and run:
But surely a hatch would be able to fit a bicycle more easily than a sedan?
Regarding pricing Daniel, I included in that list only vehicles available under $20,000 advertised publicly as dealer new/demo stock. There are Citroen C4 automatics in that pricing and the Cactus just over at $22,000 (so it wasn’t included). Just trying to keep the comparison similar to your runout special pricing. For every individual the exact mix of pricing and needs are different and there are many different opinions on quality/reliability so its hard to say any specific choice is the best.
$250 for a 90s Magna? Unless the car was completely stuffed, you got ripped off. In around 2012 I got $2000 for a 1988 SV21 Camry CS-X with over 350000 k’s on the clock.
2.0 EFI engine (3SFE, same engine as the original RAV4), 4 wheel disc brakes, power steering, air conditioning, 5 speed manual, aftermarket alloys (which came with the car), aftermarket stereo/CD player that didn’t work at all (came with the car) and a few blobs of rust near the back window and petrol cap (it isn’t a Toyota if there is no rust!)
The only reason I got rid of it was that the petrol was going up and up and up back then. I remember it being as high as $1.40 (or 139.9 cpl as per the signs, as they absolutely love their trailing nines) at most places, with the news saying it could even reach $1.70. Of course, petrol just happened to drop to under a dollar (very briefly) after I got rid of it, but naturally that didn’t last long at all and the price has gone up and up ever since, now sitting at around $1.50 per litre as of mid-2018 (give or take 10c due to the saw-wave cycle that our federal government always turns a blind eye to). Even at $1.40 I was seeing way more yellow notes disappear on petrol compared to I would have if I had kept with my usual public transport, and that was back when Zone 1+2 was still a thing, never mind single-use Metcards which were always more expensive compared to Myki (although I mainly used 5x/10x bulk tickets, which were the same “lower” price as Myki).
@meltdblog, the weird thing is, Citroen’s own web site doesn’t list the C4 as being for sale. Searching carsales comes up with none available new, and only a single demonstrator car in the whole country. Have they recently stopped selling it in Australia?
@Heihachi_73, the Magna was pretty stuffed. It was driveable, but in need of a lot of work to get it to roadworthy status so it could be sold.
As for petrol prices, consider that $1.40 in 1997 was the equivalent of $2.33 in 2017 dollars.
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They discontinued the Lancer as it was really old compared to its competitors (it came out in 2008). However, Mitsubishi fitted that particular engine/transmission into a gazillion different cars, so parts and servicing shouldn’t be a problem…
As for safety, I drive that model Corolla (1996) in the safety test. It really has no good safety rating but ours has been good to us for the period of time that we have had it (just over 22 years now). Cars have gotten cheaper too, our car cost 24.6k then (about 41k now), and it didn’t have much of what the current consumer wants now!
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