MoneyWeek issue 436 cover

Down but not out

22 May 2009 / Issue 436

Japan is still a buy...PLUS:

  • Four stocks that pass the stress test
  • Can the 'Governator' save California?
  • The day I knew I'd make a fortune


Don’t be a new-car nitwit

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.

• Read the full editor’s letter here: Don’t be a new-car nitwit