The Bank of England wrote to the Chancellor of the Exchequer this week to again explain why inflation is above target. As editor of UsedCarExpert.co.uk I am biased, but I think this issue will lead to an increase in used car buying.
When inflation is high it can feel suffocating to consumers on a tight budget. There are few things you can do to get out of financial difficulty when your salary is buying less and less. But savvy car switching may be the answer.
When prices of everything from shoes to milk are going up, the only thing I can think of where you can get more for less is buying a used car. 2% may be high inflation in economic terms but car manufacturers would kill for 2% depreciation on new cars. If car depreciates by less than 15% each year it has done well.
I was reminded of the book '
Bangernomics' by ex-Car magazine legend James Ruppert. Bangernomics is a philosophy that James has used for years to keep his motoring cheap while still being fun. He has made a habit of buying cars like BMW 5-Series and Jaguar XJs that have finished depreciating (so 10 years old) but been well loved. He drives them until a big bills shows up, then throws them away.
In his book he outlines how anyone can buy reliable cars - like old Golfs - for next to nothing and run them for a couple of trouble-free years. So if there are families out there with a car on finance, getting shot of it and saving £300 a month or whatever on repayments could be an effective way to tackle the ongoing financial problems. They can then buy an inflation-busting second hand car for a fraction of its new value. Here are two examples:
Peugeot 307
Roomy and becoming affordable. Not perfect but bags of room for the family especially the estate. Increasing numbers around which makes it very affordable.
New price: £15,000 (approx, depending on spec for 1.6 p)
UsedCarExpert.co.uk 3 year old price: £6,400 with 26,000 average miles
UsedCarExpert.co.uk 7 year old price: £3,500 with 63,000 average miles
Volkswagen Golf (2004-2008)
Here is a Golf that once again is good to drive, spacious and safe. It isn't cheap new and that seems to be the same situation on the used market compared to the Peugeot. But still there are savings to have.
New price: £16,000 (approx, depending on spec for 1.6 p)
UsedCarExpert.co.uk 3 year old price: £8,019 with 39,000 average miles
UsedCarExpert.co.uk 7 year old price: £4,285 with 58,000 average miles