Lazyweb: Car economics
The economics of second-hand cars are fascinating. And relevant to me at the moment.
My guess is that the average price of a car drops (roughly) as an exponential, or possibly a power law. And I'd also guess that the chances of expensive repairs being needed increase over time, but probably not quite so steeply as that. Generally you'll service or repair a car once a year, and that may or may not reveal a need for expensive repairs. There's also the (substantially lower?) chance of the car breaking down in between those times.
Assuming you want to minimise the cost of ownership, about the worst thing you can do is to keep buying new cars and selling them a year or two later. But that's not such a bad strategy if you want to minimise the risk of breaking down / doing without the car while it's being fixed.
Contrariwise, one of the better strategies for minimising cost of ownership is to buy bangers just after they've passed their MOT, and sell/dump them as soon as it needs repairing. But that's a terrible strategy if you want to minimise the risk of breakdown/being without a car.
There are other strategies in between: buy ex-demo cars, buy used-approved at 3 years, buying not-quite bangers ... and spending any amount of money from about £500 to £20000.
What I want to do is use some real or real-ish data to model this more accurately. But I have nothing like the time spare to do this.
Has anyone actually done these sums, fancy doing them, or know of somewhere online where they're about?
My guess is that the average price of a car drops (roughly) as an exponential, or possibly a power law. And I'd also guess that the chances of expensive repairs being needed increase over time, but probably not quite so steeply as that. Generally you'll service or repair a car once a year, and that may or may not reveal a need for expensive repairs. There's also the (substantially lower?) chance of the car breaking down in between those times.
Assuming you want to minimise the cost of ownership, about the worst thing you can do is to keep buying new cars and selling them a year or two later. But that's not such a bad strategy if you want to minimise the risk of breaking down / doing without the car while it's being fixed.
Contrariwise, one of the better strategies for minimising cost of ownership is to buy bangers just after they've passed their MOT, and sell/dump them as soon as it needs repairing. But that's a terrible strategy if you want to minimise the risk of breakdown/being without a car.
There are other strategies in between: buy ex-demo cars, buy used-approved at 3 years, buying not-quite bangers ... and spending any amount of money from about £500 to £20000.
What I want to do is use some real or real-ish data to model this more accurately. But I have nothing like the time spare to do this.
Has anyone actually done these sums, fancy doing them, or know of somewhere online where they're about?