Endurism Spotlight: The Second-Hand Car

A new Toyota Corolla costs €35.495 today. The same car, three to four years old with fifty thousand kilometres on it, sells for about €22.000.

The money

A new car loses more than a fifth of its value in the first year. Over three years it sheds forty to fifty percent. That loss is the largest single cost of owning a car. It lands hardest on the person who drives it out of the showroom.

Someone has already paid that bill on every used car for sale. A Corolla bought new at €35.495 is worth around €22.000 by its fourth year. The first owner absorbed roughly €13.000 while the car was barely run in. You buy it at €22.000 with most of its life still ahead.

Fuel, insurance and road tax cost much the same either way. The purchase is where the money is won or lost.

The object

A Toyota hybrid is built to run for a very long time. The drivetrain has few wearing parts and routinely passes 300.000 kilometres. Taxi fleets run these engines for years and keep going. A car with fifty thousand kilometres has used a sixth of a conservative life. The reason Toyota holds its price is the reason it lasts. The used one you buy will still be worth real money when you are done with it.

Ownership

A used car asks for a little more care up front. Buy a model with a reliability record and a full service history. Budget for tyres and the odd repair a warranty would have covered. The gap you are closing is thirteen thousand euros. The maintenance it costs you is a rounding error against that. Years later you sell a car that still runs and still sells. The new-car buyer financed the steepest part of that curve for you.

Let the first owner pay the depreciation. Buy the same car and keep the thirteen thousand.