Friday, 21 March 2014

Frugal Friday...

Some years ago we made the decision that the cost of MrEH's commute (on the train and tube) was too high, and we needed to look for alternatives. For us, it turned out that the best value option was to buy a second car for him - at the time I was using mine for my own work travel on a daily basis so sharing one didn't work for us. We did the sums carefully in advance, and worked out that we'd need to allow about £75 a month to set aside to cover the big annual costs - Insurance, tax, servicing and MoT, and the depreciation stuff like tyres. The cost of fuel (we already knew we'd go for a diesel) on top of that would be around another £100 a month. The first stage of the process was working out which models we wanted to look at - MrEH is tall, so that ruled out a lot. We wanted something as safe as we could get - having seen how lucky my Mum was to escape from a crash in a 2* NCAP rated car some years ago, we were strict on that. Our main car - my Clio - has ABS, so whatever we bought HAD to have that - nobody wants to be trying to remember whether the car they are currently driving needs cadence braking or not in the event of the worst happening! We wanted 5 doors - sometimes the 3 door Clio is really useful, but other times, less so, and having the choice would give us more flexibility. Finally we wanted something cheap on road tax - the £30 a year bracket was where we looked. Once everything was taken into account we narrowed it down to another Clio, or a Citroen C3, and what we eventually bought a month or so later was a 2003 registered C3, dark blue, and with 115,000 miles on the clock. I negotiated the £2,600 asking price down to £2,300, and off we went.

"Bessie" on Camping duty in the Lake District
Now, four and a half years later, we've taken the decision that "Bessie" as she was christened, has reached the end of her time with us. Her mileage now stands at over 180,000 which even for a diesel is on the high side. She's needed a new clutch in that time, and gave us a scare last year when we thought she was on her last legs, but the fitting of a new hose to the cooling system sorted that out. Our intention from the start was to run her until either she died, or the mileage reached the point where we could start to see things going wrong, and it's the latter that has occurred first. She owes us absolutely nothing - she's been an absolute nightmare to start from day one, but she's never regardless of weather, temperature, or time stood idle while we've been away, refused to start. She's been packed full of camping stuff, used to take stuff to the tip, and taken me home at a perilous (although obviously within the speed limit) speed and with only half my attention focused on what I was doing when I got "that" phone call last year saying my Dad had been rushed to hospital. We clearly chose well!

So - the process started again. We started looking at the used car ads - no way were we going to buy anything brand new - yes we have money in savings which would have purchased something new from a posh dealership, but we no longer feel we want to justify the depreciation on a brand new car - the amount they lose in value as soon as you take them off the forecourt is terrifying. I paid best part of £12,000 for mine when I bought new 6 years ago - if I wanted to replace like-for-like with the same age and model now I would pay well under half that. To buy the same spec now, brand new, would cost me over 17k - yet within the first few thousand miles that value would drop to a shade over 13k. Yes, a new car is shiny, and you get the thrill of being the first name on the log book, but is it in the least frugal, or even vaguely budget-friendly? No. There are other costs with new cars as well - in order to keep the warranty you'll be tied to approved dealer servicing - and there are often huge penalties that come along with those "too good to be true" finance or leasing packages too - woe betide if you have an accident, even if it's someone elses fault sometimes...

This is why a 3-door car is sometimes useful...
We re-evaluated what we actually *needed* from a car. This is the vehicle that will do our camping trips and which we will use for most of our UK adventures, but not for the Hebrides trip - the Clio goes up there. Bessie did venture as far north as Edinburgh on a couple of occasions without incident though! It's the vehicle we use on a daily basis for pounding up and down the motorway to and from London - so it needs a reliable engine, and one which will produce good MPG. The 1.4 diesel engine in the C3 cheerfully supplies around 60 miles to the gallon - meaning our work commutes can be done on a little over £20 a week. We don't whizz around the country at high speeds, neither do we do phenomenally high mileage, (around 14,000 miles a year in that car) so a larger engine wasn't needed. We don't habitually carry lots of passengers, or have child-seats to accommodate, so there's no need for a larger bodied car either. In short, what we had has served us impeccably well for the past few years, so we decided to look for "another of the same"!

The search was remarkably painless in the event. We looked at a few of the car-sales websites - Autotrader and Exchange & Mart are good ones nationally which allow you to tailor a search to precisely what you're after. You can even stipulate all cars within a certain band of VED (road tax) if you want! We set the search area to a radius of 20 miles at home, knowing this would also cover the area near to where I work on a regular basis, thus hopefully cutting the cost of actually going to look at anything that caught our eye. We spotted a nice looking C3 fairly quickly - up for sale for £2,390 - 3 years newer than MrEH's current steed, but more importantly with nearly 100,000 less miles on the clock! Not *quite* such a high-spec model - but then the armrests and additional 12v socket that we're losing are hardly game-changers - but in an even lower tax-bracket than we've been used to at just £20 a year! I went to look, (Mr EH had gone to the pub with some workmates - it's alright for some, eh? - in all seriousness there is a simple reason for this - I know rather more about buying cars than he does, having done it a fair number of times in the 23 years I've been driving, so can ask the right questions and (hopefully) know what I'm looking for on the paperwork - that's the theory, anyway!) took her for a test drive, and after a relatively short-lived bit of negotiation, agreed to pay £2,000 plus the current car in part-ex. Sometimes heavy negotiation around such things as a tank of fuel, or a service, is appropriate, but this time it wasn't - I named what we had in the pot to pay, and after some further chat, the dealer agreed to accept that.
"Gracie" waiting patiently for her ferry to the Hebrides...!
Some tips which I have always found helpful:
- If the car has less than 6 months MoT Test remaining, be very wary of a dealer who refuses to have a fresh one done for you. If he's confident that a car is good, he'll have no qualms getting a years fresh MoT on it from the start - this chap had done it as soon as it expired in spite of having no requirement to do so.
- Be cautious of buying from a private seller - they have little to lose if things go wrong, whereas a good dealer will be wary of having his reputation affected. More often than not a small dealership will offer better prices than a private seller in any  case.
- Ask about such things as how many keys a car has - a new chipped key from a main dealer will cost anything from £70 upwards! If there is air-con, check that it works - if it doesn't ask if they will get it re-gassed, or ask for a discount on the price to reflect this needing doing.
- Check there is a spare tyre present, and check that the same spare tyre is present when you go to collect the vehicle. Go on, ask me how I know about this one, I dare you! ;-)
- DON'T TELL LIES ABOUT YOUR PART EXCHANGE VEHICLE. If you say it starts first turn of the key, and the first time the dealer tries to move it in the workshop it takes five attempts and a set of jumpleads, he WILL come after you. It's as simple as that, and you'll deserve it. If there is stuff that he needs to know to fairly evaulate what he's paying on it, tell him. It is however the dealer's responsibility in my opinion to ask about such things as service history, and whether anything has been drawn to your attention as needing attention on the car. If there is a fault which you know could endanger someone driving it, you MUST mention it. Never mind the legalities - treat your conscience kindly.
- Don't be afraid to barter - if a dealer puts a price of £2,500 on a car, the very most he is expecting to get for it is £2,300, and he's paid an awful lot less than that! Research trade prices for the make and model you're looking at so you have an idea what the margins are.
- A silly one - if you get into a car and it has a funny smell that isn't just cleaning products, walk away. You'll spend the rest of the time you have it freezing your ass off as you drive around with the windows open.
- If you go to look at a car and get a feeling that something isn't right - walk away, you are almost certainly right!
- GET AN HPI CHECK! Or, better still, ask the dealer to do so. Most reputable ones will. This is the thing that confirms that your intended set of wheels hasn't been written off previously in an accident, and doesn't have any finance owing.
- Check out a car head on from the front - make sure everything looks even and there are no gaps on one side of the bonnet for example, and that it sits square. Do the same from the back. If it doesn't look right - walk away.
- Think through beforehand what your budget is, and how much you want for your car if you're part-ex'ing, but again, do it realistically, and again, research trade prices so you know what's reasonable - pushing your luck a little is fine, making a fool of yourself isn't.
- Don't assume that the dealer is going to try and rip you off. There are some genuine nice-guys selling cars out there, they know that if they do you a good deal, and sell you a good car, you'll tell your friends, neighbours and family how impressed you were.

Above all, don't be seduced by shiny toys if you're genuinely on a budget or trying to be frugal. Just because you have money in savings doesn't mean it's sensible to spend it on something which will instantly lose 25% of its value - why not let someone less frugal and thrifty than you take that hit, the savings from buying a car 6 months to a year old are astonishing - just think what you could do with that extra 4k you'd save on the example above - home improvements maybe? Perhaps that cosy log-burner that would over time, help you save yet more money on heating your home? That'd put a smile on your face when you were driving home in your second hand bargain, wouldn't it now?



Scarlet said...

How lovely of you to share the news about your new car ;p
Such sensible advice Robyn - particularly about not buying brand new and using the savings for something else. We are veering very much towards becoming carless and may not even bother having the car MOTd next week. We know that things are going wrong with it, and that at 14 years old it will become a money pit.At the moment it's costing us about £100 a month to keep on the road, so without it we will be better off, which will actually mean we have more freedom than if we had the car. We'll have the money to explore new places on the train so I may be picking your brain about getting the best deals on train fares!

Robyn said...

A good decision if it's getting to that stage. If we lives somewhere with more cost-effective public transport we'd certainly have gone down to just the one car by now - as it is though it's not an option.

If you're likely to be relying on trains a bit more, then take a look at the new "Two Together" railcard which would save you & J a third off rail fares when travelling together - we've already got ours!

Scarlet said...

Thanks Robyn - I didn't know about that railcard. Public transport is fairly expensive here, but luckily J can cycle to work, and I can stay in!
I woke up very early this morning thinking about the car - after having one for 28 years it will be very strange not to have one, and it's a hard decision to make even if the numbers tell us we should get rid of it!

Robyn said...

It sounds like keeping the current one isn't an option in any case. Can you put aside the money it has been costing you into a separate account to only be touched for travel purposes, and then if you decide that really you do have to replace, at least you will have the start of some savings towards it?
For MrEH and I to both use public transport for work would cost us around £600 a month! :-0