How often to change your vehicles over is a hotly debated topic and there is a lot to consider when making the decision. Company car policies tend to run vehicles for three years (depending on mileage) before swapping to a newer model. This is a good rule of thumb and certainly isn’t a figure that has been plucked out of the air, it is an approach that has been carefully calculated to include the full range of costs and considerations.
There is no denying that switching to a new vehicle will create some up front costs, but it is important to look past these to the whole life costs of a vehicle. This will factor in the initial outlay as well as a host of factors including depreciation, fuel costs, maintenance and tax.
So specifically on running costs, it is important to incorporate maintenance and fuel. As a vehicle gets older the maintenance costs increase and the vehicle will enter the MOT testing programme.
Newer vehicles also tend to be more fuel efficient. Fuel is one of the biggest costs associated with owning a vehicle at around 25%, second only to depreciation. This means that newer vehicles with better MPG performance can produce significant ongoing cost savings.
There are environmental implications, as newer vehicles tend to generate lower CO2 emissions while better MPG performance means using less fuel which is good for the environment as well as your wallet.
It is important to remember that cost shouldn’t be the only focus and driver safety remains crucial. As vehicle technology moves forward, vehicles become safer with developments such as ABS and ESC providing great examples. Newer cars tend to incorporate features like these which reduce the road risk for the driver.
There is also the significant issue of depreciation when disposing of a vehicle. A car or van that is three to four years old is often more desirable on the second-hand market than one that is much older. This should be at front of mind when changing a vehicle and is a key area to improve the total costs of ownership.
So lots to consider, and there is only one time when you can achieve the optimum resale value. So in making this decision, be sure to take the full range of factors into account and don’t just base it on the up front cost of change.
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