Don’t be a new-car nitwit

I don’t get the rationale for buying new cars, says Merryn Somerset Webb. A new car turns into a second-hand car the instant you touch the seat, losing an average 20% of its value in the process.

There is something I need to make clear. When I said a few weeks ago that my husband and I had bought a new car, I didn't mean a brand new car. I meant a nearly new car an 18-month-old VW Passat. I don't get the rationale for buying new cars. A new car turns into a second-hand car the instant your bottom touches the seat, losing an average 20% of its value in the process.

That's just the beginning. By the end of the first year it will have lost around 50% of its value. After that things slow down a bit. A Passat like mine goes for around £20,000 new (depending on how desperate your dealer is), £9,000 after a year, then around £8,000 after two years. That makes the case for buying nearly new pretty compelling you get a car in almost perfect nick for half the price paid by the nitwit who drove it off the forecourt in the first place.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.