Would buying a new car earn me money?

[FreshFraise]

Hi all,

DH and I are in an unusual predicament and can’t decide what to do for the best.

We have 20k in savings but don’t own a home. We live overseas temporarily and are entitled to buy a new car, tax free. At the moment, we have 2 cars. One is a 2015 model and the other one is a good few years older than that. We have a small loan that we used to buy the 2 cars and that will be finished in the next year.

We will be living overseas for the next 18 months and can’t decide if it’s worth our while to buy a brand new car to take advantage of it being so much cheaper. I suppose we could sell it on our return to the UK and maybe make money?

As people who have quite happily driven two pretty old cars around to enable us to maximise saving, buying a new car seems silly. Especially since we’ll want to buy a house at some point. However, in our current circumstances, would we be silly not to?

Thanks :)

Anyone?

Is the new car left hand drive or right hand drive? And would you be comfortable driving here if it's the wring way round?
Have you researched import costs and taxes?
Can you find out how much the new one would cost to insure here (imports often cost more to insure)?

Cars are a depreciating asset in general but you have a special set of circumstances, you need more info I think to make a decision

Cars lose a lot of value in their first two years. You would be very lucky to make money selling a car after 18months.

I’d save towards properly instead if you’re happy with your cars
selling the car in the UK could be awkward if it’s not a right hand drive. Also I imagine there will be paperwork to get a foreign car registered in the UK.

Would you be selling the car in the country you'd buy it in? Orr importing it back to the UK?

With the current car market it's more likely you'd make money if you sold sooner than 18 months. Our last two new cars we were able to run for six months and then sell at a profit - and we didn't have the tax advantage just good negotiation skills to get a decent price when we bought. But as a pp said it depends on whether you'd be importing the vehicle, whether it's LHD or RHD, etc.

The new car would be bought in the UK and exported to the other European country. It would return to the UK with us in 18 months time. So it would be a right hand drive. It would be bought in the UK and sold in the UK.

This is US based but gives you an idea of depreciation:

caredge.com/depreciation

I suspect the tax saving will equate to the depreciation so possibly not a way to make money but a way to have a nicer car for a while.

So 2 x import taxes then...

Might still be worth it but do some research!

I’m not sure if we have to pay the import tax as we’re a British military family. Will have to look into that. Thanks.

Is this car available now?

I don't know if it's a widespread problem, but in the UK, there's huge waiting lists for some new cars (up to 1 to 2 years) which means that nearly new cars are currently worth more than new ones because they're available now.

As an example, a friend is in the process of swapping a 3 YO PCP car for a new one and she's currently got half a dozen dealers bidding up the price of the old one - the balloon payment is £15k and she's being offered close to £20k which means she'll walk away with close to £5k that she wasn't expecting.

I bought a small 2 YO car about 18 months ago for £8k from a car supermarket. The same place is currently selling the same age car for close to £10k, even though they're nearly 2 years older. It's completely crazy, but it could be that the cars you're looking at can't be supplied for some time anyway, which you might be able to use to your advantage, as you could reserve a car without obligation - if there's still high demand, they'll just sell it to someone else.

However, who knows what will change in the time you come to sell the car. If the supply issue has resolved, prices could have stabilised and you might find the car hard to sell for the money you need to make it worthwhile, especially if the UK is in recession and people can't generally afford big purchases like nearly new cars.

In short, it's a gamble, it could work, but equally, might not.

@FreshFraise quick question - as a British military family abroad, are you not advised against driving a UK plated/identifiable right hand drive car? - I may well have watched far to much tv drama, but now need to know!

I suppose it depends on where they are stationed. Somewhere like Cyprus, it's probably OK, but perhaps not if they're in <insert name of war torn nation that drives on the right>.

However, that raises another couple of questions. Does the OP have to pay the cost of getting the car to where they currently live now, over and above combining with a trip to the UK that they'd pay for/have the cost of covered anyway?

Also, what's the risk of the car being damaged while they're driving it overseas and will this affect the value? In many countries, people don't seem to have the same desire as the UK for 'keeping cars nice' and think nothing of bumping them out of the way to squeeze into a parking spot etc. So a couple of years driving in a country like this could render the car a bit tatty which would obviously affect the value to a UK buyer who would expect it to be cosmetically perfect.

I'd save to buy a house when you get back.

quick question - as a British military family abroad, are you not advised against driving a UK plated/identifiable right hand drive car? - I may well have watched far to much tv drama, but now need to know!

The licence plates are quickly changed to local
plates. But yes, still a right hand drive so that’s still a giveaway 🙈