New cars lose half their value in first year, forum user claims

"New cars lose half their value in the first year," says forum user

For one forum member, buying a new car is the quickest way to turn €20,000 into €10,000. He argues that first-year depreciation hovers around 50%, though he acknowledges it depends on brand, model, and equipment. This supports an argument that seems irrefutable: if a car provides the same service after one year as after ten, paying for the newness is throwing money away.

That’s the theory. The problem arises when applying this logic to the real market at the end of 2017, where, according to several participants, second-hand cars have ceased to be the default cheap option. They claim used car prices have skyrocketed, neutralizing much of the advantage that justified the argument.

Why have second-hand cars become so expensive?

Because, according to various forum users, the used market has become costly enough to break traditional saving logic. Some describe the phenomenon bluntly: they state the Spanish second-hand market is bubbled. They note that cars with 50,000 kilometers are listed for barely €2,000 less than what dealerships charged, and units with over 200,000 kilometers appear at a third of their original price.

The consequence, they argue, is the disappearance of the middle ground: there is no longer a mid-life car at half the price. One user cites his own case: a vehicle valued at €23,000 new, bought for €17,500, was appraised at €11,000 five years later. The cost of enjoying it during that time, he calculates: about €1,300 per year. Whoever inherits that same car and keeps it until ten years will pay only slightly less, according to his calculation.

Depreciation varies by brand

According to one participant, a premium car driven for four years trades at 70% less than its original cost. For another, there is no single formula: loss depends on brand, model, and equipment. What many agree on is that the curve concentrates in the first three or four years and then flattens. A €20,000 car, one user insists, won’t sell for €5,000 fifteen years later even in your dreams.

What costs more: new or second-hand?

Divided by years of use, some argue the gap narrows more than sticker prices suggest. One user’s calculation puts the difference between buying new and used at about €500 annually, provided the new car is kept for ten years. For him, the real barrier isn’t total cost, but the upfront payment: new requires immobilizing more cash at once.

Insurance is the other major differentiator. New owners assume full comprehensive coverage in the early years; one user estimates this exceeds €2,000 over four years. Another notes that buying a three-year-old car started with €175 annual premiums from day one. Cases also appear of comprehensive coverage with a €200 deductible for €210 a year, and insurance costing €300 in the first year, just €100 more than third-party. Warranty isn’t free either: it’s included in the markup.

Warranty doesn’t prevent breakdowns

Buying new doesn’t guarantee immunity, according to one user. He recounts failures in new units: a gearbox pinion breaking at 2,000 kilometers or consuming a liter of oil every 2,000-3,000 kilometers, cases dismissed as normal. The flip side: buying used without warranty assumes the risk of unknown maintenance history.

Is it worth repairing an old car?

It depends on value and damage. In a car worth under €1,000, a jumping gearbox is almost a death sentence, says one user: changing the fluid is the cheapest test, and if that fails, you must find a scrapyard transmission or say goodbye to the vehicle. Others keep these machines running for years: a 20-year-old Volvo V70 petrol with 193 horsepower, bought for €1,900 with 219,000 kilometers, continued running 55,000 kilometers later with only oil, tires, and fuel as expenses.

What if I drive many kilometers per year?

This is the scenario where buying new makes the most sense. Above 25,000 kilometers annually, especially if keeping the car until the end rather than reselling, some argue new purchases win out. The opposing school buys low-mileage used cars, maintains them for fifteen years, and retires them with over 350,000 on the odometer. Over 38 years and several cars, this group claims none were lemons.

One question remains unresolved in the debate: if used cars are so expensive and new ones depreciate so fast, why do people still pay those figures for a vehicle with half its life ahead?