[alpha1]

Originally Posted by Jeroen

Manual labour / blue collar type of work compared to white collared jobs shows a remarkable gap here in India
The distinction between blue and white collar jobs hardly exist in the Netherlands and it certainly doesn't necessarily mean the lowest salary. Painters, plumbers, electricians and such can earn well above the minimum.

You are right.
The most immediate lament of most white collared Indians who go abroad is that they can't afford house-maids.

[Jeroen]

Originally Posted by alpha1

You are right.
The most immediate lament of most white collared Indians who go abroad is that they can't afford house-maids.

Ah well, now there is another difference!. Nobody in the Netherlands has maids, cooks, drivers, gardeners, nannies. Everybody does everything themselves!

Irrespective of income very few people will hire staff. And certainly not full time.
Before we left the Netherlands my wife and me both held full time jobs with three kids. We had one lady who canes once a fortnight to help clean the house. And we used an ironing service. They picked up our laundry, which we wash an dry ourselves, but then they ironed it for us. Euro 2 per shirt!

On the cleaning front, here in Delhi our whole house needs to be mopped every single day because of the dust and dirt. Admittedly, we don't have that problem in the Netherlands.

Oh, and of course most men in the Netherland share the various household chores with their wife's and or partners.

Jeroen

[Technocrat]

Congrats & all the best for the new job & also for the Fiesta

You have an interesting buying pattern & I personally too see more value in buying used but relatively new cars, I somehow found something contradictory in your post

Originally Posted by Jeroen

This Fiesta was just under a year old, with only 17.000 km on the clock. It’s original sales value was Euro 16.610. It was advertised for Euro 12.500. Which proves my point that buying new is stupid. That is 25% depreciation in less than a year! This thing had not even had it’s first service as that is due at 20.000km!

Valid point 25% dep in one year is decent savings plus you still get a new car.

However what you said below proves that buying a car which is too old &/or unreliable can actually cost more than buying new & which is why many people prefer buying new(among other things)

I can honestly say that I have never ever made money on any of my cars. Every single one has always cost me a lot of money. I believe the correct financial term is a s**t load of money!I remember once, when living in Brighton I owned a very old Datsun 120Y. As we were moving to the Netherlands at that time I had to sell it. Could not find a buyer. In the end I actually had to pay a scrap yard to take it off me!!

So buying new isn't stupid, its a matter of preference & to each his own

[digitalnirvana]

Jeroen wish you and your family a safe trip back home. All the best for the future. Have loved reading your posts on here (must say have a soft corner for the Dutch even though the accent is incomprehensible!) and hope you continue to post on here. Godspeed

[noopster]

Nice thread Jeroen and good luck on your move back to the Netherlands. The Fiesta hatch is a great car and one hopes it will make its way to India someday.

I loved the little insights you provided into Dutch life. Please continue to visit the forum- the good thing about the Internet is that it's everywhere!

[Jeroen]

Originally Posted by Technocrat

Valid point 25% dep in one year is decent savings plus you still get a new car.

However what you said below proves that buying a car which is too old &/or unreliable can actually cost more than buying new & which is why many people prefer buying new(among other things)

I think you are reading way to much in that. I would say spending money on second hand cars is likely to cost you a s””t load of money. Spending money on new cars is likely to cost you an obscene amount of money.

What determines the cost of a car, just a few things, obviously we start with the new cost.

- road tax
- Fuel
- Insurance
- Regular preventive Maintenance
- Repair
- depreciation



Road tax is fixed in most European countries on the weight and emission category and doesn’t change over the years. Other then when a car reaches 25/40 years it might be eligible for no road tax at all. Road tax on this little Fiesta is Euro 500 per month. On my Jaguar its Euro 1400 per year.

The amount of fuel a well maintained car uses, remains pretty stable, even over very long periods of time. Only when an engine and its components are really running on their last legs, will you see a noticeable increase in fuel usage

Insurance is relative more expensive the first 4-6 years of ownership. Most people would want to keep a fully comprehensive insurance going. In Europe after 4-6 years for most people it just doesn’t make sense to pay a high premium after 4-6 years. So they switch to third party cover only.

To put some European numbers on it. On this little Fiesta third party insurance is around Euro 250 per year. Fully comprehensive insurance is around Euro 1500 per year. We have 80% no claim bonus so the difference in absolute money is a lot less.

Regular preventive Maintenance is pretty stable across the life of any car. Yes there are certain services that are more expensive (say you need to change the timing belt), but even they happen only so many kilometers.

Repair is one that by its very nature as cars get older you will see certain normal wear and tear and as cars get older that is likely to go up.

Depreciation is the real killer though, at least in Europe and USA.

Lets take my Jaguar XJR. I bought it in Kansas City, early September 2009 on Ebay for about $10.000 with 90K miles on the clock. That was a little above its normal market value. But it was in excellent condition, always maintained by Jaguar dealers, a very unusual colour and there aren’t that many Jaguars around to start with and this one was located only 1200 miles from Kansas City. So I went for it.

This car was a 2003 model, but was actually first sold towards the end of 2002.

The MRP on this car at that time was a whopping $75.000. I got the original MRP sticker and invoice from the first owner.

That means this car depreciated a staggering $ 65.000 in about 7 years!. That is nearly $10.000 per year!

You would have to be extremely unlucky to have to spend that sort of money of repairs on any car. Modern cars can easily clock well over 200-250K kilometers without any major problem as long as they are well maintained and looked after. Typically, after 150.000 you will have to deal with small things over and above the normal preventive maintenance. E.g. you might have to replace engine mounts, Door rubbers might leak, an alternator or AC might throw a bearing.

But when it comes to reliabillity these sort of well looked after cars do pretty well. You might have the occasional niggle to content with, but they don’t leave you stranded more often then brand new cars necessarily.

There is virtually no depriciation on these cars, or very little. Insurance is low, only third party. Fuel efficiency is likely to be in the same ball park figure. Although it varies by car/country most cars will depreciated to about 15% of their original value in 6-10 years.

As long as my “repair cost” is lower then the accumulated depreciation, at least purely from a financial point of view I’m doing great!

Most people believe that as cars get older they become less reliable and more costly to run. There is not that much data that support that view. Especially if you take into consideration the depreciation.

But if it gives you piece of mind, you just enjoy driving a new car, by all means do of course!

I take a different view. If I have the money to buy say a nice German car (Mercedes/BMW/Audi) I look at it differently. First of all, I’m a bit of an old git. So I don’t particularly like the current line up, pretty dull if you ask me. I like some of the older models.

But for the cost of a new BMW525 I could easily buy myself a nice second hand 10 year old BMW 633, A 10 old Mercedes E class and a 7 year old Jaguar X350 and still have change left!

Originally Posted by Technocrat

So buying new isn't stupid, its a matter of preference & to each his own

A famous American stand up comedian, Ron White, had a show called “you can’t cure stupid” which I think is very true. But then stupid is not an absolute value, it’s a relative term depending on one’s perspective.

But spending $65.000 on depreciation alone in seven years, just to drive an initially new Jaguar doesn’t make sense to me. I call it stupid, just so people understand clearly, without ambiguity what I think about it. Whether it is stupid is in the eye of the beholder.

I have been called stupid (and a whole lot worse many times) plenty. With hindsight not always incorrectly either.

I shipped my Jaguar from Kansas City to the Netherlands in 2012 when we moved to Delhi. It cost around $2000 to get it shipped, imported, tested, certified, Dutch plates and all. This car is worth maybe Euro 5-7.000 if that. And it uses a phenomenal amount of fuel. I have quite an enthusiastic drive style and this car has nearly 400BHP by means of a super charged 4.0 L V8. I’ll be lucky to get 1:8. City driving is well below 1:6.

I get a lot of advise from friends to sell this gas guzzler. But I like it a lot. I like driving in these very luxurious, beautiful made cars. And yes, it is expensive in road tax and fuel. But I have no depreciation. So I’m still laughing at all those suckers that are buying new XJRs. By the way, those cost more than Euro 100.000 in the Netherlands. These new XJRs are depreciating at easily Euro 20.000 per year for the first few years. Now that is truly obscene I think. Any idea how much petrol I could buy for Euro 20.000, spare parts etc???

The actual mileage doesn’t even make that big an impact. You buy a car, park it for a year and it has lost 20% of its value. On any other expensive purchase than a car, where would we think that is not stupid?
Jeroen

[Technocrat]

Thanks for the detailed post, while I agree with various aspects of your post, I still disagree on calling a new car buyer stupid, sometimes its just not about value that you get out of a purchase but the happiness or satisfaction of getting one, some get that feeling buying only new & some buying only old.

[Jeroen]

Originally Posted by Technocrat

Thanks for the detailed post, while I agree with various aspects of your post, I still disagree on calling a new car buyer stupid, sometimes its just not about value that you get out of a purchase but the happiness or satisfaction of getting one, some get that feeling buying only new & some buying only old.

Its not that new car buyers arestupid. Its about buying a new car is stupid from a financial point of view. It just doesn't make any sense at all.

I buy all sort of stuff that doesn't make any sense at all from a financial point of point. Ask my wife. Exactly to you point, if the financial aspect isn't relevant, you buy for other criteria. You enjoy it, you just don't like the idea of owning something that was owned by somebody else, you believe a new car is more reliable than an older one, you want to impress the neighbors or your brother in law, all of those are perfectly good reasons to buy a new car.

None of those are particularly rational reasons, but they are still very good reasons if they matter to oneself.

Making sure you get or what you do is relevant for you is pretty smart if you ask me.

Jeroen

[shankar.balan]

Originally Posted by Jeroen

What determines the cost of a car, just a few things, obviously we start with the new cost.

- road tax
- Fuel
- Insurance
- Regular preventive Maintenance
- Repair
- depreciation


Lets take my Jaguar XJR. I bought it in Kansas City, early September 2009 on Ebay for about $10.000 with 90K miles on the clock.

The MRP on this car at that time was a whopping $75.000. I got the original MRP sticker and invoice from the first owner.

That means this car depreciated a staggering $ 65.000 in about 7 years!. That is nearly $10.000 per year!

The actual mileage doesn’t even make that big an impact. You buy a car, park it for a year and it has lost 20% of its value. On any other expensive purchase than a car, where would we think that is not stupid?
Jeroen

Originally Posted by Jeroen

Its not that new car buyers arestupid. Its about buying a new car is stupid from a financial point of view. It just doesn't make any sense at all.

I buy all sort of stuff that doesn't make any sense at all from a financial point of point. Ask my wife. Exactly to you point, if the financial aspect isn't relevant, you buy for other criteria.

Making sure you get or what you do is relevant for you is pretty smart if you ask me.

Jeroen

I like these insights on your Jaguar ownership. Yes, the US is the perfect place to buy nicely kept, happily driven used cars of pretty much any make.
Many's the time I ve been lusting after those well kept Mini Coopers, Mustangs, Chargers and Camaros and Jeeps and Range Rovers in the US Used Car Lots. Even Enterprise has very nice pre owned fleet cars for sale and these are usually dumped in 3 years or about 40,000 miles from what those chaps mentioned so from a buyer's perspective thats a decent deal considering the excellent road infrastructure in the US. I liked CarMax too, a lot.


And yes, I do agree that there is really no point buying a brand new car with all its attendant fat costs and take all the burden of depreciation, taxes, insurance and so on, in the first 5 years of its life and then sell it on, for a pittance.

My Yeti is now almost 5. It will fetch only perhaps 60% of its original purchase value if I sell it on to some one else now. That means I will merely recover my "stake" which I put as the down payment. And I have hardly been able to clock 35000Kms in it. Really no point selling it. Better to hang in there and enjoy it for some more years. I have also spent some money on new consumables like a new Battery and Tyres and some few accessories etc, so it is perfectly personalised for my individual needs and taste. Perhaps I ve spent another 100,000 rupees on all these fiddly bits over the last 5 years. Add to this, the normal annual servicing costs of about 15000 Rupees and another 30000 rupees on the Insurance + Zero Dep. Fuel typically costs me around Rs 3500 a month, so thats another 40000 rupees per annum. Effectively it costs me around 90000 rupees to run this car each year, not counting what Ive spent on the "Interest" on the "EMI" and what Ive lost via depreciation and the "time cost of money' on the original Cap-ex, which I put for the down payment.

With our terrible roads and driving conditions in India, I will still spend top dollar in maintenance only at Authorised Service Centres and I will still keep buying the comprehensive Insurance and Zero Depreciation policies, throughout its life until it remains in my possession. It is just safer this way for me.

Frankly, it makes much better sense to hold on to this vehicle considering it is in top condition and gives me a lot of driving pleasure. I can use the money saved by NOT buying a new car now, to get some other stuff that I ve been wanting, or to spend on travel and other experiences!

All this analysis leads me to believe that even if my wife and I use UBER X for all our commuting inside the city, both together as well as separately, I will never be able to actually spend anything close to what I am currently spending on owning and keeping my own car. Using an option like UBER is far far cheaper indeed!
But then, what price the ownership and pleasure of having a car one loves?
Thats exactly it then, one buys things out of Passion and a sense of "love" - and these decisions are made with the "heart" and not the "mind"!
Slightly Off topic but the below serve to illustrate passion vis a vis utility...
Thats exactly why one buys an Omega James Bond Seamaster or a Breitling or a Vacheron or Frederique Constant or Rolex, when a Timex or Casio or Seiko tells the time equally well. Thats why one buys a Stetson or an Akubra or a Goorin Brothers Panama Hat when one can buy any old hat from Decathlon. Thats why one buys a pair of Church's Shoes or a pair of RM Williams Boots, when one can just pop over to Clarks or Hush Puppies or indeed, Marks and Spencer! Thats why one buys 1:43 scale Auto Art or MiniChamps car models when one can just as easily get Maisto or Kinsmart! Thats why one lusts after and buys PING golf clubs when one can get similar service and quality (at least for one's basic standards in the game), from a set of Inesis clubs from Decathlon. Thats why one buys a Dunhill Cologne or Aqua Di Parma when one can grab a nice smelling perfume at Body Shop or indeed, Fab India. Thats why one goes for a Rajesh Pratap Singh original, pin tucked Kurta compared to a Fab India Kurta. Thats why one buys those excellent and well designed pet collars and leashes from PetSmart or Blue Wilderness Real Wild Boar and Rabbit Meat protein foods rather than local makes and Pedigree etc from the local vet's pet store.

This is why I went for the Yeti (completely against everyone's advice and against the grain) when I could have gotten a Toyota Altis or similar.
It is nice if one loves or is able to appreciate "definitive brands/ products" in each category and provided of course, if one is able to indulge ones passions in this way. After all, what is life for, if not enjoyment and pleasure and passion!
There is no way accounting for the taste and passion that one may have and the enjoyment one may derive from the money one spends in pursuit of such things - these are 100% entirely subjective and relative to the individual!
No regrets, in my case at least!

[Jeroen]

Originally Posted by shankar.balan

No regrets, in my case at least!

Excellent! The only criteria that counts!

I am one of those people that has spend a stupid amount of money on watches, Breitling, several Omega, Fredrique Constant and a few others, even an Apple Watch.

It gives me great pleasure every time I wear one, look at them.

I count myself very fortunate being in a position to indulge in this sort of thing. I'd rather buy another watch then lose money on a new car depreciation.

Mind you, these watches keep their value remarkable well. Probably have gone up a bit. It was never a consideration, but still it's pretty cool to think they are worth more then when I bought them!

Jeroen

[shankar.balan]

Originally Posted by Jeroen

Excellent! The only criteria that counts!

I am one of those people that has spend a stupid amount of money on watches, Breitling, several Omega, Fredrique Constant and a few others, even an Apple Watch.

It gives me great pleasure every time I wear one, look at them.

I count myself very fortunate being in a position to indulge in this sort of thing. I'd rather buy another watch then lose money on a new car depreciation.

Mind you, these watches keep their value remarkable well. Probably have gone up a bit. It was never a consideration, but still it's pretty cool to think they are worth more then when I bought them!

Jeroen

Actually you're right. These watches appreciate in time.
I wandered into a Top Horological Boutique a day or two ago while I was wearing my grand dad's old Omega Seamaster and the chap there remarked that it would fetch a pretty good price in today's market....

Retirement fund, perhaps...

[nikhil_pon]

Jeroen, Wishing you all the best for the future.
Hope you continue to post in the forum.