Monday 27 March 2017

It's true: the new 'new' is second-hand

Just because there's a scrappage scheme doesn't mean a new diesel car equals better value, says Shane O'Donoghue

IN this business it's all too easy to get carried away by the new-car market. It's sexy, shiny and, well, new, obviously. However, the majority of car sales transactions involve used cars. Despite the great value available at the moment on new cars, you shouldn't dismiss an older car until you take a look at what's on offer.

Ken Carey, sales director of Carroll and Kinsella Toyota in Blackrock, Dublin, says there are still buyers unsure about whether to go for a new car on the scrappage scheme or a one to two-year-old used car. In that situation, the deals on new cars at the moment tip the balance in their favour.

This means that sales of certain 2009/2010 models -- namely smaller cars with low emissions -- are relatively slow. You'd hope that means there are some bargains to be had for the buyer without a car to scrap, but Mr Carey says that there's also a "real scarcity" of used cars from 2009 due to the abysmal sales figures that year.

What about 2008? Well, cars sold later in the year are fine, but apparently there's a bit of a stigma attached to models registered before the tax system changeover (to emissions-based pricing) in July 2008. If you're more concerned with the rate of annual road tax, it's worth taking a look at the tables, as it's not as black and white as you might think. For instance, you could have a 1.6-litre car from pre-July 2008 and pay no more tax than a new car in Band D.

That's not the only preconception buyers appear to have at the minute. With the sharply rising cost of fuel, it's unsurprising that we're all looking at how to improve economy. That, allied to the mindset that a car has to be in Band A or B for cheap road tax, is leading buyers to focus solely on diesel power.

John Kennedy, dealer principal at John Kennedy Motors in Clonmel, told us that "new car buyers are now pre-programmed to buy diesel, a trend that's spilling over into the used-car market."

The effect is solid prices for used diesel models, but significantly cheaper petrol versions. It appears that, if you break the mould, you could find real value in a used petrol car right now. If you're adamant about having diesel power then you may find it difficult to find the very car you're looking for.

Taking the Toyota Avensis as an example: there are virtually no diesel versions available from 2007 or 2008, as the old tax system made them prohibitively expensive to buy new. Yet there is a large market right now for that type of car. Another problem is, of course, high mileage. Many buyers are finding that their only option is to import a car from the UK.

Mr Kennedy confirms what we've anecdotally discovered for ourselves: "Three years ago nobody asked what the road tax on a car was. Now it's the first question."

We'd urge buyers to look at the bigger picture. Take a view of the lifetime of the car rather than simply looking at the purchase price and the cost of the tax disc.

Factor in your likely mileage, the (admittedly rising) cost of fuel, tax and maintenance before you take the plunge. If you're a low mileage driver, then odds are that a petrol car could be a far more economical solution -- and there's great value to be had in the market.

Sunday Independent Supplement

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