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Velocette

Economics Of Keeping V Trading

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My Prius T Spirit 07 reg is now on 80k, and has a full supplying min dealer service history. I bought in July 2010 with 24k on the clock when I paid £10.6k. A standard car but it does have leather seats. It has returned an average of 52mpg and has been generally reliable and comfortable, but see my update of a few months ago.

I a m aware that the 8yr/100k warranty will expire within 10 months or less at my current rate of usage. My rule of thumb, ok it's rough and ready, is 10p per mile for depreciation, so maybe it would trade for £4k or eBay for perhaps £5k?

So the more I use it the more it depreciates and of course it will need repair and replacement eventually. The question in my mind is when, and what is the optimum point to call it a day. The most likely replacement is a Skoda Octavia greenline diesel, perhaps £10ks worth. My main concern is that once it hits 100k miles the value will drop at a greater rate with no warranty. Also it is still running on the original discs and pads, the tyres have 15k left in them so replacement costs are likely. The car is running very well. So my main concern is to swap at the economically optimum point. I reckon this could be around now, and if not now then to keep the car for the foreseeable future perhaps until a near terminal experience provokes action.

I would welcome any thoughts from fellow forum members. Thanks! Velocette

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Hi Velocette,

My previous Gen II T-Spirit 08 reg is still in the family. It has now done over 130k, with no problems except a replacement wheel bearing. It now has a Toyota extended warranty, which can (AFAIR) be renewed while the car is under seven years old, regardless of mileage.

If you are interested, check this carefully with the dealer, then read the policy wording even more carefully. Toyota's left hand really doesn't know what the other left hand is doing. I've got no worries about the warranty coverage, but plenty about its period of validity.

The intention with the Gen II is to keep it going until it runs out of warranty, by which time it should be well over 200k miles.

My Gen III (59, 80k miles) will have to keep going until it drops as a result of Mr T's weasel warranty, which has dropped the resale value through the floor. It makes no sense whatever to part exchange it for a newer car, as there is virtually no depreciation from now on.

In summary, I would keep the Gen II as long as it has no problems. Take out the extended warranty, unless you want to junk it and replace it at the first big problem. It should have a lot of miles left before that.

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If you are looking to trade in within the next 12mths then now is the best time to do it.

You never know when a big bill will arrive, and it would always be best to sell just before, so if the car is running fine then that may be now.

The majority of your car’s depreciation was with the first owner from 2007 to 2009.From now until 2014 it will drop at around half the rate it did since 2010, until it arrives close to the min value for a working Prius with a MOT, that’s around £2000.So the first owner lost around £10K in depreciation, if you sold now you lost around £5K or if you keep another 3 years you would only loose another £2K.So you have basically come to the point were running costs are now more important than depreciation.

Note at the lower value point it makes little difference how many miles it has done, a 10 year old car with 120,000 miles can be worth the same as one with 250,000miles, its more about condition and what’s been recently replaced.

So in short Plan A trade in now, Plan B keep for at least 2 years more and fingers crossed for reliability :=)

My preference for our 2nd family car is always buy at around 90,000miles 5 year old car, and then sell at 7 years old with 130,000 miles, that way we get a small overall cost of ownership with good reliability.Our 1st car is a company lease.

Hope that helps.

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It now has a Toyota extended warranty, which can (AFAIR) be renewed while the car is under seven years old, regardless of mileage.

If you are interested, check this carefully with the dealer, then read the policy wording even more carefully. Toyota's left hand really doesn't know what the other left hand is doing. I've got no worries about the warranty coverage, but plenty about its period of validity.

Toyota extended warranty is for either 1 year or 2 years (you can get mileage limited ones as well if you don't do many miles).

You can take out a 1 year warranty if the car is less than 8 years old.

You can take out a 2 year warranty if the car is less than 7 years old.

If this is the first extended warranty for the car, the mileage must be under 100,000 miles.

If the car already has an extended warranty, you can extend it further regardless of mileage (subject to the vehicle age).

From the T&Cs

Eligible vehicle

A Toyota vehicle which -

(a) has been branded and sold by Toyota Motor Europe NV/SA in Europe as a Category M1, M1G, N1 or N1G Toyota motor vehicle;

(b)has not been modified structurally, mechanically or electronically otherwise than with the permission of Our holding company, Toyota Motor Europe NV/SA or save for the purpose of enabling it to be lawfully re-registered in the United Kingdom;

c) has standard Toyota wheels and normal road tyres fitted to it;

(d) has been type approved such to as to enable it to be lawfully registered in the Home Territory.

(f) (in the case of a 12 month warranty) is less than 8 years old and has less than 100,000 miles on its milometer at the start of the first Warranty Period if the vehicle was not purchased through the Toyota Approved Used Car Programme with the benefit of a Toyota Extended Warranty; or

(g) (in the case of a 12 month warranty) is less than 8 years old at the start of the Warranty Period if You are renewing an earlier Toyota Extended Warranty without any break in cover; or

(h) in the case of a 24 month warranty) is less than 7 years old and has less than 100,000 miles on its milometer at the start of the first Warranty Period if the vehicle was not purchased through the Toyota Approved Used Car Programme with the benefit of a Toyota Extended Warranty; or

(i) in the case of a 24 month warranty) is less than 7 years old at the start of the Warranty Period if You are renewing an earlier Toyota Extended Warranty without any break in cover .

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Many thanks indeed for some very helpful ideas. RtB, a very interesting analysis, a sensible gamble on the odds. I had no idea that an extended warranty was an option. I shall certainly check that out and see what the cost might be. I think my sense is to keep the car for another year or two, depending on cost I could either take out the warranty or bank the cash against repairs.

Food for thought, for which many thanks, Velocette

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