Posts Tagged ‘Volvo’

Looking past the plate

Posted on May 31st, 2011 by Rob Marshall

A fortnight ago, my retired neighbour took delivery of a two year-old car and spent half-an-hour of my bank holiday weekend extolling the virtues of it, while I was trying to sidle away politely and salvage what was left of my garden, which had suffered badly during the harsh winter months.

Frankly, the salesman must have seen her coming, as she trotted out the reasons for changing her 1.7-litre 1989 Volvo 440GLT for a similar-sized 1.6-litre 2009 Volvo S40 S. As she saw it, the replacement was ‘cheaper to tax’ and ‘better on fuel’ than the older model but she elected to gloss over the many thousands of pounds that she was throwing down the toilet on depreciation. Being the sort of kind chap that did not want to burst her bubble, I did not have the heart to point out that pertinent fact.

To be honest, I was envious. Not for her but for the new owner of her aged but immaculate part-exchange. Despite being over twenty years-old, her old car had covered barely 20,000 miles, exactly the same as her ‘new’ two year-old S40. It had also been flawlessly maintained and had spent the majority of its life tucked away in a centrally-heated garage. Only the number plate gave the 440’s true age away but its showroom condition did not sway the cunning salesman, who gave her a paltry £200 trade-in.

Once left to my gardening, her situation had me thinking. Ironically, despite the newness of the replacement vehicle, my neighbour had not upgraded as much as she thought. While power steering, anti-lock brakes, five-speed manual transmission and alloy wheels featured on both cars, the 440 possessed metallic paint, front fog lamps, heated seats and a spare wheel, all of which were missing from her newer base-model Volvo.

Naturally, performance, build quality, efficiency and tailpipe emission standards have moved on significantly in twenty years and her S40 possessed not only airbags but also WHIPS, SIPS and a host of other safety-related acronyms that most people, other than car bores, would not understand. Yet, in true Volvo tradition, the elderly 440 had impact bars in all of its four doors, plus a full safety cage, daylight running lamps and considerable ‘crush’ space designed into the bodyshell but it remained outclassed in the safety arena by its grandchild.

Yet, according to the table below, not much separates the cars in hard facts and figures:

Specifications:

  1989 VOLVO 440 GLT 2009 VOLVO S40 1.6 S
Body Type 5-door hatchback 4-door saloon
Engine Size – Horsepower 1721cc – 109bhp 1596cc – 100bhp
Acceleration: 0-60 mph 10.1 seconds 11.3 seconds
Top Speed 112mph 115mph
Fuel type / fuelling method Unleaded Petrol (95RON) / Multipoint fuel injection Unleaded Petrol (95RON) / Multipoint fuel injection
Fuel tank volume (litres) 50 55
Miles per Gallon (Urban figure provided)** 26.2mpg 30.7mpg
Service intervals 10,000 miles 12,500 miles

 

However, would the older car’s higher fuel consumption and higher maintenance bills outweigh the two year old car’s depreciation? To work out an answer, I performed a few calculations that evening, to see if running a highly-specified (but low mileage) older vehicle, against a newer alternative, would stand comparison:

Costs:

  1989 VOLVO 440 GLT 2009 VOLVO S40 1.6 S
Retail cost @ 20,000 miles(Forecourt price)*** £1,000 £10,500
Trade-in value after a further  3-years and 36,000-miles*** £150 (scrap price) £4,500
Depreciation cost over 3-years and 36,000 miles*** £850 £6,000
Tax (VED) cost for three years (3x 12-month discs at 01.04.11 rates) £645 £570
3-year servicing cost (based on a Volvo franchised dealer quotation) £1,000 £750
MoT test cost (based on RRP of £54.85) £165(x3 needed) £110(x2 needed)
Fuel costs (based on Urban MPG figure** and 150p per litre for unleaded) £9,357.00 £7,988.00
Insurance quotation for three years* £884 £1,068
     
TOTAL RUNNING COST £12,901 £16,486

*** Guide figures calculated for the S40 with assistance from Glass’s Guides (a motor trade car value publication)

** MPG cost is taken from the official Volvo literature for both cars but note that different testing methods have been used by the EC between 1989 and 2009.

*The cheapest car Insurance quotation is Fully Comprehensive, insured for business use and is taken from comparethemarket.com and is based on a 35 year-old professional, unmarried male, living in Worcestershire, driving 12,000 miles per year, with a full UK licence, held for 18 years, with no endorsements. Figure shown is for information purposes only.

By looking at the figures, the older car would be saving its owner over £1,000 per year, compared to the newer Volvo. However, some people would argue that spending over £3,500 over three years is a cheap price to pay for a safer and more modern car to grace their driveway. Of course, there is always the potential of older components simply giving-up the ghost, replacements for which might put a different complexion on the exercise but this can be traded against the fact that genuine Volvo servicing (and the parts cost) for the older and less complex car is cheaper, despite the need for slightly more regular maintenance.

Yet, you do not have to drive around in either an unfashionable 20 year-old Volvo or a tatty banger to benefit from such savings. Plenty of low mileage cars, aged between 10 and 15 years-old are on the market, most with one previous (often elderly) owner and impeccable service histories for between £800 and £2,000. My other neighbour has just purchased a 2001 Citroen Xantia, with only 19,000 miles on its odometer, for a mere £850 from an independent motor trader and thinks that it is the best car that he has bought. Maybe my Volvo-owning neighbour chose not to go to him to chat for a reason…

Looking past the plateLooking past the plate