Any Good Method to Keep Changing Cars Once Every Year or Two?

justwii on 10/09/2017 - 20:38

First, I believe cars are depreciating assets, there is no one I need to impress and I don't work in Westpac. That means I am aware getting a car must lose some money, but I can consider that an expense. So I am just trying to find a way that spends less when changing car every year or two. I have checked several options:

  1. Novated Lease - They always depreciate the car value to 70% after the first year, then 60% (of the original price) the next year and since I am not driving much, I may end up paying more because of the financial cost. The good thing is they can allow you to refinance the remaining value to get another car.
  2. Buying outright then sell it - Buying outright is also an option but I will have to deal with the car selling myself. Not a fan of private car sale. Also, I believe doing trade-in with dealers is more likely to lose more. The good thing is there is no extra financial overhead here.
  3. Long term car lease - Don't know if renters or dealers are still doing this anymore. I would certainly hope that this is still a viable option to be considered. The good thing is I don't have to deal with the car myself at the end of the lease.
  4. Online car sharing - Now this could be something new and unexplored myself. Something like car owners they lend their cars out and some website manages the lending? Any opinion?
Automotive

Comments

  • Architectonic on 10/09/2017 - 20:47
    +15

    Why are you changing car every year or two?

    First of all, no matter what you do you are either paying stamp duty to the government, or high fees for some sort of car swap program (if that exists at all).

    If you aren't doing the buying and selling privately, you are also giving away $2-3k (or more on premium cars) each time you change cars.

    If you don't have anyone to impress, an alternative is to ride an electric bike and taxi/rideshare when the weather is bad.

    • justwii on 10/09/2017 - 21:49

      Yes more or less like you said the cost is at least 2~3k yearly for such privilege, which is ok I guess for this kind of luxury?

      • TheBilly on 11/09/2017 - 08:28
        +6

        It is way more than $2k .. Unless you are buying a Toyota, literally everything depreciates like diarrhoea and you will never get re-sale.

        • Tuftsdude on 12/09/2017 - 14:07

          Unless you know what you're doing and get bargains from Gumtree and the car auctions.

        • cjmoore on 12/09/2017 - 19:26

          @Tuftsdude: Isn't the OP talking about buying new every 1-2 years?

        • Tuftsdude on 13/09/2017 - 01:15

          @cjmoore:If he is talking about buying new then Billy is right. I thought he meant just changing cars every 1-2 years.

  • tryagain on 10/09/2017 - 20:58
    +2

    The cost difference between the options will likely be quite small compared to the amount you lose for the privilege of regularly rolling over new cars, if you can afford this loss, then just go with the most convenient option for you and include it in the same "expense" category with the depreciation.

    • justwii on 10/09/2017 - 21:51

      I am thinking even the difference may be small I still want to be smart about it by doing the most cost effective way.

      • tryagain on 11/09/2017 - 06:57
        +1

        It's a bit of a convenience vs cost consideration, best bang for buck is doing it all yourself, If you get someone else to do it for you they will charge you one way or another.

        If you are happy to go second hand cars that can drastically reduce the losses, if you don't know much about cars then 2-3 yr old cars that are still in warranty wouldn't be a bad option.

        Why do you want to turn them over so regularly?

        • Euphemistic on 11/09/2017 - 07:39
          +2

          Obviously spdoesntdoesnt want to wash a car. Easiest way to do that is to buy a new one.

  • mskeggs on 10/09/2017 - 21:02
    +20

    Buy 15yr old cars and the depreciation is negligible.
    The 15yr old car was somebody's first choice a while ago, and modern cars are reliable enough that the chances of something major going wrong in a 2 yr ownership window isn't big. Even if it blows up, your maximum loss is limited!
    There are readily available old cars still in very good condition.

    I always feel good looking up the new price sticker cost on the old cars I drive.
    You need to be a smart buyer, though. Lots of older vehicles are sold just before a timing belt or other costly maintenance comes due. But a service history doesn't seem to add much to the base cost, so you need to be a bit picky when you are buying. Again though, the savings are so large it isn't a big deal.

    • justwii on 10/09/2017 - 21:52

      Well then I do hope I possess that kind of knowledge.

      • TheBilly on 11/09/2017 - 08:30
        +3

        Even a 3 years old car is better than new. You have the warranty in most cases, and the big bulk of new car depreciation has already taken place.

    • chartparker on 11/09/2017 - 07:53
      +5

      The biggest reason I'd recommend against 15 year old cars is the tremendous recent improvements in safety. Yeah you can put a price on luxury, comfort and bragging rights, but not on your family's health and safety.

      Edit: unless you buy something ugly like a Fiat Multipla. The other drivers will be too busy staring at your ridiculous car and crashing into other things while you simply waft past the carnage.

      • Euphemistic on 11/09/2017 - 11:14

        If you buy one with two front airbags and abs, there hasn't really been significant improvements in safety since those two things. Sure, there are incremental improvements like more airbags and stability control, anything more than that is very new tech and it's on,y been the last couple of years that lane change warnings etc have started to become mainstream.

        you could buy a commodore/falcon in the late 90s with airbags and abs for not much more than the base model. ABS was pretty much standard on 'family' cars since early 2000s wasn't it?

        • chartparker on 11/09/2017 - 13:57
          +4

          Airbags and ABS alone don't make a safe car. Advancements in body shell design, crash zones, safety cell rigidity, and above all not getting into a crash in the first place because either your AEB system prevented it or the stability control let you handle the car under unfavorable conditions.

          Dual front airbags aren't going to do you any good if you slide off a country road on a rainy night and slam sideways into a tree.

        • Euphemistic on 11/09/2017 - 18:53
          +2

          @nytrojen: in reality the advancements in shell design, crumple stones and cell rigidly haven't made massive changes in years. A 15yo car does have crumple zones, intrusion bars and unibody construction. They did some of that stuff even before ABS brakes and airbags.

          Yes there are all improving though and a very modern car will be more safe in a crash, but the good old HQ Holden steel brick on wheels is long gone

        • chartparker on 12/09/2017 - 05:43
          +11

          As a mechanical engineer there's no way I can support what you're saying. CAD and FEA have improved leaps and bounds over what was available 10+years ago, and engineers are much more capable of predicting stresses and the results of impacts to a car frame, and crucially designing to those stresses than they've ever been.

          Just because you can't see the difference under the skin doesn't mean that an engineer hasn't spent months refining their design to direct the flow of stresses better around the cabin while leaving the passenger intact. Things like AEB and active crash mitigation is marketable and that's why people know about it, but trying to sell the concept of holistic and safe DESIGN is almost impossible.

          http://www.popularmechanics.com/cars/a11201/why-cars-are-saf…

          "Over the past 10 to 15 years, steels have been getting stronger," says Chuck Thomas, chief engineer at Honda R&D Americas, in Raymond, Ohio. "We probably had 500 megapascals of tensile strength in the early 2000s. Now hot-pressed or hot-stamped steel is around 1,500 megapascals."

          David Leone, executive chief engineer for Cadillac, says that the use of high-strength steel isn't about turning passenger cars into invincible tanks but controlling crash energy and minimizing weight. "Heavy does not mean safe," Leone says. "Heavy means heavy. Go back to the '50s and '60s. The cars were heavy. They were stiff. But if you ran into the wall, you bounced off the wall and all the deceleration went through your body. Heavy and stiff is not where you want to be."

      • mskeggs on 11/09/2017 - 20:26

        I agree that if safety is your priority then newer cars are worth it.
        But cars since 2000ish have had safety features streets ahead of models from, say 1990.

        • chartparker on 12/09/2017 - 07:31
          +4

          See my reply above. I spend every day looking at Stress Analysis results from complex dynamic simulations and re-designing structural steel framework to reduce stress concentrations and improve the structural rigidity. The tools that are available these years are absolutely light years ahead of what was available 10+ years ago or even 5 years ago, not to mention the computing power that has allowed it to be ubiquitous.

          I could show you two frames that look basically identical, but one has a couple of reinforcing plates in just the right area, which the other lacks. This minor difference means that one will fail after 1 year of cyclic loading, whereas the other will last indefinitely. Engineers just didn't have that kind of power available 15 years ago. It was mostly just based on trial and error, experience and crash testing.

          You're talking 15 years of improvement in computational power, which has been increasing exponentially. Think about this: 15 years ago Nokia feature phones were the hottest thing on the planet and computers had only just cracked dual cores, and the iPhone was still 5 years away.

          But, as clearly demonstrated, you can't market that kind of structural and safety improvement because the layperson just won't see the difference. Until their car hits a tree.

        • mskeggs on 12/09/2017 - 10:31
          +2

          @nytrojen:
          I understand what you are saying, but I do question whether the advances have translated into substantially safer cars.
          If you look at road toll figures, there is a continuing improvement, but it is slight compared to the low hanging fruit of past decades.
          I agree if safety is the only consideration, then a new Volvo is the best bet, and wearing a helmet for all passengers would be smart.
          But we trade off safety for other factors every day, so for most it isn't the only criteria.

        • chartparker on 12/09/2017 - 10:56
          +5

          @mskeggs: yep you have a professional engineer and an article from another engineer telling you how much more advanced car design is these years, yet you still question it. Exactly as I said you can't market that concept to the average layperson.

          Regarding the road toll figures: those only involve fatalities. What price do you put on your health? Maybe losing a limb? Brain damage? Loss of livelihood? Or one of your family members?

          Without trying to become sensationalist, those are also very likely scenarios depending on how well the car was designed to withstand an impact, not just the extreme "death or nothing" incidents that the road toll covers.

          I could use your same line of argument in that if cost is your only consideration then you might as well just take a bus.

          I'm not saying to buy a brand new car, but you're talking over one and a half decades of continuous engineering improvement.

          Your priority might be simply cost. All I'm saying is don't discount the 15 years of engineering design improvement simply because it wasn't printed on a brochure. It's hard to quantify, but at least crash reports can show you what your car is expected to perform at

        • justwii on 12/09/2017 - 15:26
          +1

          @nytrojen:
          Hey cool industry insider info there. I always have this myth long in my mind may be you are the good person to solve it for me. So a rigid strong car frame that won't deform under great impact but the passengers inside are like rolling in a washing machine after a crash; compares to a car frame that deforms and absorbs impacts, which one is the way to go?

        • cameldownunder on 12/09/2017 - 15:48
          +1

          @justwii: You want the smallest amount of deceleration at any time possible. 180G is about the maximum.
          So it is advisable to have the maximum length available to diminish the deceleration.
          Stiff body = no space, frame that deforms = more space to absorb the impact = lesser G = greater chance of survival.
          Also think about the collision as a transfer of energy, the more energy absorbed by the car, the less it is transferred to the passenger.

        • abb on 12/09/2017 - 15:50

          @justwii: Disclaimer: I am not @nytrojen , nor a mech eng.

          The one that deforms is GENERALLY better, especially in collisions between similar vehicles. Deforming takes energy, energy that otherwise may break your bones.

          However, if your vehicle is much more massive (in the literal sense of "heavy") than the thing you're hitting, rigidity can work in your favour.

          Picture a B-double truck hitting a fairly solid concrete wall. If the cabin is rigid, the truck punctures through the wall, barely slows down, and the driver is fine. If the cabin crumples, the trailers crash through what's left of the driver on their way to meet the wall…

          In other words: the best outcome is for the thing you crash into to deform, not your vehicle. This is why race tracks have tyre walls. But on the road, that attitude leads to a terrible zero-sum game, hence crumple zones are mandatory.

        • chartparker on 12/09/2017 - 16:08
          +1

          @abb: I see what you're trying to do here, but you're mixing scenarios. Make it a straight comparison otherwise you're confusing the situation.

          If all variables are equal (total mass and impact velocity), then the kinetic energy dissipated is going to be the same as well (KE = 1/2Mv^2)

          If the energy is not going into the car, then where's it going to go? Straight into the passenger. Imagine dropping an egg in either a steel container or one made of sponge (assume they both weigh the same and are dropped from the same height). Which one do you think has the highest chance of surviving?

          A crumple zone is designed to convert as much of that kinetic energy into heat and sound through material deformation (conservation of energy means the energy in an isolated system can never be destroyed or created, only converted from one state to another) and increase the time of the impact.

          Everyone's aware that Force = mass x acceleration right? If you increase the time that it takes from impact to full zero motion, you're essentially drawing out how long it takes to decelerate from a given velocity, ie: reducing the acceleration number. since you can't change the mass of the vehicle to reduce the force in an impact, this is the best way to do it - by increasing the time interval of the impulse, thereby reducing the deceleration and reducing the impact force

        • abb on 12/09/2017 - 16:25
          +1

          @nytrojen: Right, maybe I explained it poorly.

          If the energy is not going into the car, then where's it going to go? Straight into the passenger.

          The third option - "the thing you crashed into" - is what I was getting at.

        • chartparker on 12/09/2017 - 16:38

          @abb: yep I deliberately kept that out to avoid confusing the original question because in both scenarios it will absorb the same amount of energy

        • Ughhh on 12/09/2017 - 23:37
          +1

          @abb:

          You can't always choose what you crash into? If I could choose, I would choose not to crash into anything.

        • abb on 13/09/2017 - 09:02
          +1

          @nytrojen: I only mentioned it because I knew that if I said "crumple zones are better" without qualification, some internet physics lawyer would say "ha! self deformation is not necessarily the game theory optimal solution!", but here we are, way down the rabbit hole… ;)

          Only got myself to blame I guess.

        • mskeggs on 13/09/2017 - 11:25

          @nytrojen:
          I agree that engineering advances are likely to be improving car safety.
          Take a look at the figures for car deaths or hospitalisations and you will see modest improvement or actually worsening.
          Half the Australian car fleet is younger than 10 years, so if the engineering improvements are so substantial, why aren't they translating to fewer hospital admissions or much of an improvement in fatalities?

          I'm not claiming you are ignorant of engineering, just your claim to authority falls down at the most casual inspection of the outcome stats.
          Just because it is possible to engineer more safety, doesn't mean that manufacturers are particularly doing so in a way that improves outcomes, compared to, for example, cutting manufacturing costs.
          Lots of stats at:
          https://bitre.gov.au/statistics/safety/

          They pretty much show big reductions in death and injury for two decades from the 1970s on, then much slower improvement. Which is what I was suggesting from my layman perspective.
          Perhaps you can show why the engineering revolution has produced such a meagre safety result?

        • chartparker on 13/09/2017 - 15:40
          +1

          @mskeggs: I'm rapidly losing interest, but here goes

          Firstly you fail to take into account the massive population growth in Australia. Let's look at the website you cited:

          "During calendar 2016 there were 1,293 road deaths (provisional).
          For 2017, there have been 692 deaths (provisional). This is 58 deaths (7.7%) lower than the same period last year."

          Population in 2002: 19.65 million
          Population in 2016: 24.13 million
          Population in 2017: 24.65 million

          Road toll 2002: 1715
          Road toll 2016: 1290
          Road toll 2017: 692 (so far)

          Road toll per million 2002: 85.27
          Road toll per million 2016: 53.46
          Road toll per million 2017: 28.07

          2016 compared to 2002 is 60% less fatal incidents per million people. 2017 is 3 times less so far - the year is not over yet

          A 60% reduction in fatal incidents sounds much better now that you take into account the population growth, don't you think? Especially if a family member is involved. More people on the road = more chance of incidents. You can use statistics to prove anything. 40% of all people know that.

          Safety as a general concept is qualitative, not necessarily quantitative. It's hard to show measurable outcomes and can only really be evaluated from an individuals own assessment of what they value is safe. How do you measure how many people safe cars have prevented from being administered to hospital? How do you count prevented amputations or prevented brain damage? You wouldn't know would you? Because the incidents never occurred and were therefore never recorded. The only incidents that are covered are fatalities, and if you stop looking at the raw numbers and take into account population growth then it makes sense.

          Just putting aside the hurt feelings for a second, I've cited and explained the advances in engineering design, and if you feel threatened then nothing I say will stop you from fighting me to justify buying a cheaper car (unless you end up in a horrific car crash, but I hope that never happens to you). Here's an example of poor engineering design for safety versus good:

          http://www.howsafeisyourcar.com.au/2017/Great-Wall/Steed/NBP…

          http://www.howsafeisyourcar.com.au/2016/Toyota/Hilux/TGN121R…

          Great Wall steed vs Toyota Hilux. They both have similar levels of "safety" features such as airbags and ABS (in fact the Great Wall actually has more airbags than the Toyota) yet you stand a much higher chance of serious injury in an offset frontal impact in the GW.

          Now before everyone chimes in with "but my 2002 Model X car got a 5 star safety rating". The bar is constantly being raised and the crash assessments get more stringent over time. A 5 star car from 2002 would not get 5 stars in a crash assessment today. With all these types of crash assessments you have to look at contemporary vehicles from the same year. Chinese brands such as Great Wall etc are still fairly new on the scene and aren't generally at the same level in terms of engineering structural design as the more established players.

          The original point of ALL of my arguments was that there's more to safe cars than the marketable terms. If you don't find it valuable then that's fine, but you don't just dismiss it. Everyone has their own idea of what they think is "safe", and if you're happy accepting the risk vs the outcome based on your own value of safety and price then that's fine.

          Again, everything you've said just reinforces my point that the improvements in safe and well engineered designs are basically impossible to market, and no-one either knows or cares. Hence why you don't see the value in it. As an engineer, I do.

          EDIT: Found a better resource for road toll numbers:

          https://en.wikipedia.org/wiki/List_of_motor_vehicle_deaths_i…

          Road fatalities per 100,000 motor vehicles (This makes more sense since not everyone in Australia owns a vehicle)

          2002: 13.4 fatalities per 100,000 vehicles
          2014: 4.5 fatalities per 100,000 vehicles

          (2014 was the most recent for the same comparison)

          3 times less fatalities per 100,000 vehicles in 2014 versus 2002

      • abb on 12/09/2017 - 15:38

        Yeah you can put a price on luxury, comfort and bragging rights, but not on your family's health and safety.

        If you really think your health and safety is priceless, you would not be in a car in the first place. Buses are orders of magnitude safer, and only cost a few hundred thousand dollars, why not buy a bus?

        Although it's unpopular to admit, people put a dollar value on their family's safety all the damn time.

        Having said that, I hope that my next car will at least have the auto-braking cruise control thing!

        • chartparker on 12/09/2017 - 15:54
          +2

          Some people want to argue semantics for the sake of arguing. The intention was to point out that there's more to buying a car than that just based on financials. Yes people try put a dollar value on your family's health all the time. I value health highly and would rather put more money towards reducing the risk of anything happening to either myself or my family, and all you can really do is change the likelihood.

          What you're really putting a price on is the reduction in risk of something adverse happening, not the price of health itself. If your child/partner/mother/father/dog was killed or severely injured in an impact, how would you know if it could've been avoided? What would you have paid to avoid the situation in the first place? Would a car with AEB have stopped you in time? Would a better designed safety cell have protected their heads from impacting the center console and fracturing their skull, and what would you have paid to stop it from happening? How can you put a price on that?

          Health insurance won't protect you from death or ill health, but it'll reduce the risk of you not being to cover the expenses and give you a better chance of potentially better and quicker care. Again, risk reduction.

        • abb on 12/09/2017 - 16:30
          +2

          @nytrojen: > Some people want to argue semantics for the sake of arguing.

          On the internet? Never! ;)

          I agree with your main points of course. I just get annoyed with the whole "no price on your family" guilt trip some people ply. Like, no, I am not buying a $2000 baby stroller to reduce a chance of injury from 0.00001 to 0.000009.

        • chartparker on 12/09/2017 - 16:50
          +3

          @abb: Yes well then you're getting into value propositions and diminishing returns. This is Ozbargain, where you find the best value you can in terms of safety vs price ;)

          My argument would be that a cheap unsafe car is not as good "value" as a moderately priced but much safer car. I mean everyone on here loves QC 35s because they offer the performance people want for a price they feel is justified. Safety should be viewed the same way in my opinion. I feel I may be in the wrong country for this sort of thinking though. The good old "she'll be right" mentality is super strong here

      • virhlpool on 12/09/2017 - 21:29
        -2

        While you can say the new cars have better safety features, I believe the older cars had much stronger built as with anything old of decent brand. Not sure if it has to do with metal quality or thickness of metal etc.

        • chartparker on 12/09/2017 - 22:06

          /facepalm

          Please read the article I posted above

  • chumlee on 10/09/2017 - 21:03

    Yes. Get a job with a company car where they change over cars at end of lease

    • justwii on 10/09/2017 - 21:52

      I should add that to swap to cars of my choice.

  • Kangal on 10/09/2017 - 21:31
    +6

    I heard of a tactic that a father of a friend used to employ.
    He'd buy a good condition 2.5 year old car, which has had the heavy depreciation done, and basically feels like a New car.
    Then he would keep it for 1.5 years, and sell it as a 4 year old car, with very little loss from the depreciation.

    And I was told doing that like 6 times, would mean he drove 6 New Cars in only 9 years.
    While the loss/cost of depreciation would've been like he had bought a new car and drove it for 9 years.

    Me?
    I'm too poor. I try to buy a car that has less than 120,000kms if possible, but more importantly is that its around 10 years old, and even more importantly that it comes in a good condition.

    • justwii on 10/09/2017 - 21:54
      +1

      Not bad but like I said I don't like doing the selling myself. Best if there is some kind of scheme that the business that provided the car can just takes it back and I just jump to a new one.

      • Kangal on 10/09/2017 - 22:56
        +6

        Any scheme there is will take away the power and choice from you, the consumer.
        And competition would be diminished, if not, scrapped.

        So while some setup like that may exist, the point is, it would be very consumer-unfriendly. You would actually pay more, and get less.

        Just like phone contracts; you get more options if you buy the handset unlocked/outright and choose the plan that suits you. Works out cheaper in the long run.

      • MrBear on 11/09/2017 - 12:34

        Toyota have one called "Toyota Access" that may suit your needs.

        http://www.toyota.com.au/toyota-access/how-it-works

  • nubzy on 10/09/2017 - 21:34
    +2

    Drive an old car. Most cars made in the last 15 years will have comforts like A/C, power windows etc and be quite safe and comfortable for daily use, i'd say around 5k would get you a decent car that will give you many years of trouble free and cheap motoring.

    • justwii on 10/09/2017 - 21:56

      I don't mind getting 2nd hand cars, still the question is which way to go? Private buy sell is not to my liking.

    • smux on 11/09/2017 - 08:55

      Everyone keeps mentioning getting 15 year old cars. But with new tech in cars like crash avoidance, emergency braking and adaptive cruise control (distance control from car in front) some people would like a car with that tech now, not in another ten years. So it's about what are you willing to pay for those safety /convenience features.

      • empty456 on 11/09/2017 - 11:03
        +1

        Sorry, but crash avoidance, emergency braking, and adaptive cruise control? Shouldn't a good driver be able to do all those without relying on the car's tech?

        • smux on 11/09/2017 - 16:19
          +5

          Whether or not a driver can do those things is beside the point, because obviously they can or should be able to do all of those things, you'd hope. But are they able to drive safely all the time and avoid accidents 100% of the time? Obviously they can't. So I think some of these features can improve safety for certain types of events.

          One example is you're wanting to change lanes so you look in your side mirror briefly, but then the car in front of you stops suddenly and you slam into the back of them. Happens all the time. I see these features as enhancing a driver's abilities and improving safety, not as a replacement for skills they should already have.

          Personally, I'd love a car with adaptive / distance control cruise control, as it would mean I can use cruise control in traffic, not just when there are no cars in front of me. Cheapest used cars I've seen they have it are about 15 to 20k.

        • chartparker on 12/09/2017 - 07:37
          +1

          Yeah, you never need crash avoidance until you have a crash. It's the same argument for insurance. If you're confident that you're untouchable and alert 100% of the time that's fine and your choice, but not everyone is in the same boat.

        • Euphemistic on 13/09/2017 - 07:25

          @nytrojen: actually, if you are taking about crash avoidance not being needed until you have a crash, then there is no point having it. Crash avoidance technology is all about not having that crash using assistance from the car. Yes, being picky, but seems you have been quite pedantic about some other things further back up the page too.

        • chartparker on 13/09/2017 - 08:16

          @Euphemistic:

          EDIT: I see your point now about the language I used. I should have worded it "You don't need crash avoidance until you're about to have a crash".

          Feel better now?

  • Bluberry on 10/09/2017 - 21:37
    +3

    Yes. DONT.

  • Euphemistic on 10/09/2017 - 22:08
    +1

    If you want to minimise your losses on Bing and selling cars, then private is the only way to go, along with buying old(er) cars where the majority of the depreciation is done.

    BUT you need to know what you are doing. You need to be able to pick up a car that will not need major servicing while you own it, will be reliable, can be repaired cheaply and will still have similar value when you sell it.

    Guy at work had a series of commodore wagons. Bought at around $1500 and none of them cost him very much because he could sell them for similar price and he was able to do his own repair work. Commodores are plentiful, easy to fix and fairly cheap for parts.

  • [Deactivated] on 10/09/2017 - 22:47
    +9

    Get a job at one of the major auto manufacturers. You get a new car every 6 months then it's given to the dealers as demo stock.

    Assuming you can't, rather than waste money changing cars every couple years, stretch and buy a car now you're really happy with that you can hold for at least 5 years.

    Your numbers are the wrong way around for novated lease, they don't start dropping the principal off until later in the lease so you are boned if you terminate before full lease term (think of it like a home loan, at the start most of what you're paying is interest).

    No matter what car you drive after a couple months the novelty will wear off, solution isn't to keep changing cars it's to learn to be happy with what you have.

    • Euphemistic on 11/09/2017 - 07:44
      +2

      Get a job at one of the major auto manufacturers. You get a new car every 6 months then it's given to the dealers

      Alternatively you could also buy a used car business. Take home a different car every night, someone else washes it for you, you don't even own any cars. My grandfather did this for a while and when we came from interstate to visit he could give us a free hire car too! Win-Win

    • RockyRaccoon on 11/09/2017 - 09:16

      A bit dead end given they are all stopping manufacturing Australia in a few months

      • [Deactivated] on 11/09/2017 - 16:23

        Not necessarily manufacturing in Australia, I know people at VW head office and also Inchape that get that deal so presume it's common in industry

      • onetwothreefour on 12/09/2017 - 14:22
        +1

        Ending manufacturing in Australia doesn't mean that it's a dead end to work for them.

    • Diji1 on 11/09/2017 - 11:10
      +1

      Get a job at one of the major auto manufacturers.

      Yeah, those jobs are everywhere in Australia!

    • eapster on 12/09/2017 - 18:41
      +1

      I used to work for a major car company some years ago and I used to get this benefit. Very sad when I left as I no longer get to drive brand new vehicles every 6 months.

  • altomic on 10/09/2017 - 23:13
    +21

    Just buy 2 cars now. Put one in the garage and drive the other for a year. Then swap them over after 12 months. I.e. alternate between the 2 cars every 12 months.

    • Pharos5 on 11/09/2017 - 11:01

      That's the dumbest smartest idea I've ever heard. +1

  • Karlos101 on 11/09/2017 - 07:30
    +4

    Jist suck it up and do private buy sell. Cheapest way to do it. And you have the most control this way too.

  • mreddie on 11/09/2017 - 08:13
    +8

    What a great way to waste money, I wouldn't advise doing that to any degree…what a waste

    • TheBilly on 11/09/2017 - 08:33
      +15

      Thread should be titled how can I waste money in the most efficient way

      • Ozpit on 11/09/2017 - 09:34
        +3

        OP has an irrational fear of selling a used car. He needs to do some research on how to sell a used car - with honesty and integrity - and just do it. It doesn't hurt.
        And why he feels a dire need to sell every 1-2 years is also irrational. There is no way he is not going to lose big money by turning over new cars with such regularity, no matter what car finance he chooses.
        He sure ain't no Ozbargainer.

  • FunkyHoratio on 11/09/2017 - 09:09
    +1

    Get into a job where you can salary sacrifice a novated lease. It comes out of pretax salary, including fuel and all servicing costs. Cars need to be under 8 years old at the end of the lease, so we've generally got 2nd hand cars 4 years old that we've selected from private sellers. At the end of the lease pay the residual (if any) and sell the car on to recoup some of the lease costs. Start again with a new car every 2-3 years.

    • Ryballs on 11/09/2017 - 13:41

      Yeah novated lease is the way to go. Most of them offer a manufacturer-equivalent extended warranty if that's a concern. We got four year old car with 4 years extended warranty and have had about 20k of repairs done under warranty.

    • Eeples on 12/09/2017 - 16:12

      You can get burned on the interest rate charged by the finance company.

      Ask them what is the interest rate (it may be as high as 11%pa.)…… this will often make it not worth it despite the salary sacrificing.

    • baggyred on 12/09/2017 - 16:21

      Tips for novated leases - as mentioned above - negotiate everything, including the interest rate. If you can - trade one off against another.

      Secondly - always ask for the Employee Contribution Method, maximises the tax efficiency - as for some people a novated lease structured poorly can end up costing more in tax than it saves.

  • furys12 on 11/09/2017 - 09:20

    be rich or buy cars old enough that the depreciation is already mostly done (and then private sale)

    since I am not driving much

    this is the best bit, you're not even driving much but you are willing to have some pretty big expenses to be in a different car every couple years, note the word different and not better, why

  • redvaldez on 11/09/2017 - 10:00
    +1

    I get that you obviously like to have a new car. But why do you need to change cars every year or two?

    Most new cars will have, on average, a 3 to 5 year warranty. Depending on how much driving you do there may also be fixed price servicing for a fair portion, if not all of that period also.

    Car manufacturers usually space their noteworthy updates a few years apart. So assuming you're buying the same model car each time, you could literally be buying the exact same car a couple of times in a row.

    Unless you're travelling some ridiculous number of kilometres (I have a mate who works as an insurance assessor and travelled 120,000 km on his work car in 18 months - thank goodness they pay for it and his fuel) I can't think of why buying a new car every 3 years would be any more detrimental to you than yearly or bi-yearly, and would be far better on your hip pocket than the differences in what you've asked in your OP.

  • yoonibear on 11/09/2017 - 10:35

    I'm trying to wrap my head around this as well. My partners work colleague does something along these lines, but I don't understand the reasoning behind it.

    Wouldn't it make sense if you bought either a demo or a 1-2 year old model, drive it until the end of warranty or when it's <100,000km then sell and repeat? Or when the costs of repair/service outweigh what it's worth?

  • katz on 11/09/2017 - 11:46
    +1

    If you don't want to impress, why do you want a new car every year or two?

    • Broke-Ken on 11/09/2017 - 14:07
      +1

      As a car enthusiast myself, I sort of understand OP's reasons why. Its like, why do people want to travel to different places all over the world? it's about gaining different experiences. In OP's case, being able to have their car "passport" filled with various stamps.

      I've never been able to justify the cost, but if OP can find a way and is happy with it, more power to them.

      • banana365 on 12/09/2017 - 17:21

        But the experience of driving any particular car would get pretty repetitive after a few weeks surely? I've driven some cars that I thought were great and some that were total shit boxes. After a while the highlights or lowlights of each type become far less apparent and they just become the transportation tools that they really are.

  • justwii on 11/09/2017 - 20:38

    Thanks everyone for your valuable opinions. While some may suggest against doing it, but I do believe you just don't aware of a financial viable way to do this. If someone can enlighten us this is in fact doable with a fraction of cost, I bet you would also want to try it out.

    So far I think there are still unexplored areas like the Toyota Access MrBear posted above and something like flexicar I would love to hear more about.

    • Euphemistic on 11/09/2017 - 21:13
      +2

      Good luck. I'd recon that if there is anyone that has worked out a system to do what you describe, then you would have heard from them by now. It's a fact, cars cost money, changing them regularly costs even more.

    • loke on 12/09/2017 - 11:29

      I reckon you'd need to speak to a tax accountant, seems like something that applies more to high income earners whose occupation requires them to travel (client visits, etc) so they make work related car deductions via the logbook method (12 week logbook valid for 5 years - geez our self-assessment tax system) which allows you to claim a % of MV costs to minimise their taxable income - keeping in mind there's 25% diminishing value method (8 years effective life, or diminishing 200%/8=25% per year) for depreciation, that's pretty significant depreciation on a new car - and the sale of car should still have some income tax implications as it'll require a balancing adjustment - but then bam, buy the next one right after.

  • tonyjzx on 12/09/2017 - 12:32

    The only way we do it is to buy a car on a hire purchaase or a lease and final balloon is $1 and claim tax on the car for a particaular business unit

    HOWEVEr, you have to have the income and tax burden to make this useful… 2ndly when you sell the car you have to pay GST on it.

    So if you buy a $30K car you typically pay $3-4K on interest over time and whatever running costs THEN when you sell it for say $20k, you pay $2k GST on the end.

    You're still paying a fair bit for a new car every 3yrs but you're paying more if you dont change your car as you're just losing everything on tax.

    Also a fairly cost effective way to pass cars onto family members if you so want to.

  • Yttrium on 12/09/2017 - 18:17
    +1

    Why are you changing car every year or two?

  • johnno07 on 12/09/2017 - 18:40

    there is no one I need to impress
    …
    changing car every year or two

    Hmmm…

    • tonyjzx on 13/09/2017 - 13:05

      I get where the OP is coming from. In about 2-3yrs I get bored with the car… unlesss its a Porsche 911 or something awesome.

      The need for me is there to try something new.

      And yet? Why? Its an expensive operation if you're paying for cars out of taxed income.

      If you're rich then it doesnt matter.

      I get that its the best to buy a 2-3yr old car under warranty and hopefully you still have 2-5yrs of warranty left… THEN consider your options once the car is about 7yrs old or so.

      HOWEVER, people are different. Some people just cant hang onto a car for 5-7yr… do you hang onto the same phone, same PC, same laptop etc.

      So why the same car?

      1-2-3yrs turn around is ridiculous IMO but hey, if you have the itch and the means.

  • blackfrancis75 on 12/09/2017 - 19:29

    https://www.pickles.com.au/ cheapest option outside private buy/sell

    and by 'cheap' I'm valuing your own time at around $0

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