Go back a decade or two when I managed a contract hire fleet and I used to take a DIM view of car ownership. My customers simply rented them. I owned them. The risk and rewards of ownership were mine. Kind of focuses the mind.

You can classify your motoring costs as being extremely DIM.

D = Depreciation

I = Interest

M = Maintainance

You can mentally file away motoring costs into these categories.

Depreciation is by far your biggest cost. It accounts for well over half your total costs – three-quarters even. It’s the hidden horror cost of motoring. You buy a new car for £9,000, walk out the showroom and it’s worth less than £6,000 in cold cash, the same day. One way to make a saving is to buy the same car near new for about £7,495. The question is are you really saving – another topic? Also remember, the bigger and expensive the car – the bigger and more expensive the depreciation.

You need to negotiate a deal with at least a 20% value. This can be a combination of price or finance rate discount. A 0% finance deal near does it.

Interest charges are not as bad as people imagine. Roughly speaking if you borrow money at 12-13% APR, over 5 years it adds about 30% to the cost of the car if you borrow the whole amount. Over 4 years – 24%. 3 years – 18%. That’s not an official quote – just giving you some idea of costs. The calculation is half the APR and multiply it by the years of the loan. 12%APR/2=6%x3yrs=18%total interest.

If you pay cash there are still 2 costs. One, you lose the interest you might have been getting. Two, you lose the opportunity to spend the money on something else. It’s what’s called ‘opportunity cost.’

Maintainance can be a low cost. The basic rule is the bigger the car, the bigger the bills. Insurance, road fund licence and petrol costs all rise with the size of car. You can save on petrol, tyres and brakes by driving carefully. The price of a service can be affordable. Your real worry is repair bills when something goes wrong. Because all cars are so hi-tec these days, the cost of replacing some parts can be expensive. A good idea is to always keep yourself under warranty.

Luckily with Chevrolet maintenance is not a worry. If you can afford the price of  new Chevrolet or the repayments your budget is unlikely to be broken by running costs.

Chevy are comparatively cheap to insure and tax. They compare well for fuel consumption. Tyres and brakes are not fancy spec or prices. The big benefit is you can by Chevrolet servicing in advance for a fraction of the real cost. 3-year, 30,000 mile servicing costs between £199 for the smaller models and £299 for the Epica and Captiva. 

I hope that helps you get your head around what a car really costs. One things for sure – the price of a car is not the cost.

Regards

Ralph

www.chevroletreviewsandprices.co.uk

If you want to minimise depreciation, you buy small and cheap. Big cars depreciate more than small cars and there’s a limit to the amount a cheap car can depreciate.

If you buy a Chevrolet Epica, you’ve broken both rules. The Epica is a big beast and £14,000.00 is a lot of money. Having said that the Epica is the cheapest of big cars. It’s cheaper than the value Skoda, Kia and Hyundai alternatives and it’s a better car. The Epica is also value compared with the growing Passat and Mondeo. The Epica is half the price of a 5-Series and E-Class but gives you as much metal for your money.

Let’s look at some figures. My personal opinion is somewhere between the Epicas 3^rd and 4^th birthday the owner will loose £10,000.00 in depreciation. It sounds a lot of money but it’s nothing in comparison with costlier alternatives which can loose £10,000.00 in their first year and the same again in their second year.

Many big car buyers ignore depreciation at the point of purchase because a big spacious car suits their lifestyle.

Those who find depreciation, the cost of the money and maintenance unacceptable will buy smaller and cheaper.

Those who accept the costs of running a big car usually do two things to reduce the annual cost, they:

• Keep the car many years – 8,10,12 – to water-down depreciation. Why not? A big car is spacious, pleasant to drive and thought safe. What else would they want?
• Take care of the car so it will last the planned years of ownership and minimise other costs.

The secret to reducing your motoring costs is ‘CARE.’

Owners who don’t look after their car will find it costs them big-time.

At least £2,000.00 over 3 years to be blunt. And that’s for a small car.

Second-hand cars are valued by age, then mileage, and lastly, by condition.

As we know small cars do not depreciate as much as larger cars. Did you know mileage does not make as big a difference as you might fear? The big difference in car values is due to the differences in the CONDITION of the cars.

However I’ve often heard people mistakenly saying, ‘It’s a waste of time looking after your car, because  car dealers don’t give you any more money for it.’

The fact is – when I last looked – a 3 year old small car, with 12,000 miles per annum on the clock, in above average condition is worth £1,000.00 more than the same car in below average condition.

The £1,000.00 difference is half the £2,000.00 difference you can save with care. Care saves your fuel, brakes and tyres. The saving can be even greater with bigger cars.

Regards

Ralph

www.chevroletreviewsandprices.co.uk

If you buy a car it’s going to cost you. If you buy a big car like a Chevrolet Epica it will cost you big time. If you buy a big fancy car like an A6, 5-Series or E-Class you’ll pay an even more fanciful price.

If you borrow the money, you’ll pay interest. If you pay cash you’ll lose the opportunity to earn interest. Either way it’s gonna cost. But how much? Sometimes we miss the simplicity of £30,000.00 being 3-times more than £10,000.00.

We’ve looked at maintenance costs, in particular fuel consumption. It used to be maintenance cost nothing in comparison with interest or opportunity costs. Only depreciation costs more. But today, with rising prices – especially fuel – it can cost more to maintain a car per year.

First I have to guard myself and say this is not financial advice. It’s not a quotation or an offer. I’m not trying to sell you anything.

This is chat, talk, me trying to give you the benefit of experience going back to 1966. I’m not holding myself out to be an expert (ex being a has-been and spert being a drip under pressure).

What’s important is the cost of the car because it’s the principal sum on which calculations are made.

So, if you buy a £30,000.00 car it will cost you three times more than a £10,000.00 wagon. You knew that but do you think about it? Let’s look at a £10,000.00 car for easy calculation.

If you borrow £10,000.00 the lender will apply a flat rate per annum. Let’s say the rate is 6%. So, if you repay the £10,000.00 over 1-year you pay £600.00 interest on top. If the term is 2-years you pay £1,200.00. 4-years is £2,400.00. Over 5-years you will pay £3,000.00 interest on the £10,000.00.

Note you don’t owe £10,000.00 over the whole period. The amount owed is reducing with each repayment. But the flat rate calculations were made on the principal amount borrowed. That’s why we use APRs, which roughly say – the calculation is so complicated – the APR rate is twice the flat rate.

Beware some sellers imply the flat rate is the APR. Never trust this and do your own calculation. Take the total repayments (monthly repayment x period in months) and subtract the principal sum to find the total amount you’re paying for the credit. Divide the interest by the principal sum borrowed and divide the result by the number of years of the agreement. Double the rate to find the APR.

Here’s how it works:

Let’s say you buy a Chevrolet Epica for £13,595.00. You part exchange a 4-year old car for £3,595, leaving a balance to pay of £10,000.00 which you finance over 3-years. The finance company applies a flat rate of 6% – that’s 18% for the 3-years, being 6% x 3-years = 18%. So you pay £1,800.00 interest and have to repay £11,800.00 with 36 monthly payments of £327.78. The APR will roughly be 12%.

Let’s say some joker implies it’s 6% and 10k over 3yrs will cost 327 a month. To find the APR multiply 327 x 36 months to get £11,800 and take away the 10k borrowed to get £1,800.00 interest. Divide 1,800 by 10,000 to get .18 x 100 = 18% which divided by 3 years is 6% per annum. Double the 6% to find the APR of 12%.

Stuff that, you’ll pay cash! But if you pay out £10,000.00 cash you lose the opportunity to earn interest. It might not be interest. The opportunity may be a holiday, landscaped garden, building extension, which have quality – qualitative – values being hard to calculate.

But there are other factors some consider more important than interest.

Buyers know finance increases their ability to buy and therefore their willingness to buy. Sellers know this and offer finance.

Some borrowers worry less about paying interest, saying they’re repaying with a depreciating currency. Others add why pay cash for depreciating goods – repay with a depreciating currency.

Some lenders know by being in finance they never really actually own the car and opt for leasing type repayment profiles which in theory only pays for the depreciation and interest. They add they’re not going to use up the useable life of the car so why pay for it. Just pay for the bit you use.

Any way you look at it, buying a car costs. In other words once you pay cash or finance, you no longer have the money. The choice is the car or the money. Your feelings or thoughts make a triangle of choice – you, car, money.

You can have it all ways – your cake and eat it – buy a big Epica for 14, saving 14 on the price of an executive car and use 0% APR finance to do so. Because most cars this size in the UK cost near £30,000.00

Regards

Ralph

www.chevroletreviewsandprices.co.uk

Here we’re going to expose the cost of running a big car – like a Chevrolet Epica – so there are no surprises.

Car running costs and a car not fitting the buyers’ lifestyle are the two main reasons owners trade in their cars early. This is horrendously expensive because the hidden horror of depreciation is realised too early.

A car must suit your lifestyle and you must be able to maintain it. The funny thing is car owners act surprised at running costs.

So what are the costs of running a car excluding the cost of the car or repayments? We’ll look at depreciation and interest in following posts.

Meanwhile, to run a car you have to:

• Insure it
• Tax it
• Maybe MOT it
• Service it
• Replace tyres, brakes etc which inevitable wear out
• And put fuel in it – the subject of my previous post

What do they cost?

Insurance

IF you’re over 35 years old, got all your no claims and live in a safe post code, you can insure most cars from £150.00 to £800.00. I’m not an insurance expert, adviser or broker. I’m just giving feedback from my customers. If you don’t meet the criteria you will find variances. Even if you do qualify it’s not so simple because there’s no love lost between the insured and insurers – gotta be the subject of another post.

The £150/800 range is not the difference between insuring a Chevrolet Matiz and Chevrolet Epica. It’s the prices my customers say they pay for a 2.0 large car. Gotta shop around.

Tax or vehicle excise duty or road fund licence – the disc in your windscreen.

Today you pay VED based on CO2 emissions. You can pay anything between nothing, £35.00 and £400.00. But things are changing. Here’s my rough guide. In the past car manufacturers have been expected to have an average CO2 footprint for their range of 160. The 2008 target was 140. Ford, Vauxhall, the French and Italians have been meeting these criterions. Others have not. So government is getting tough.

In the future expect every car with emissions over 140 to get expensive. If it’s over 225 it’ll get very very very expensive. To give you an idea – efficient small cars come in under 140. Not too many come in fewer than 120. Be careful buying big cars, MPVs and SUVs because they can be 226 and above and are going to cost in future.

130 and under they’ll go easy. 120 and under would be better. But you can expect today’s floors to be tomorrow’s ceilings so look out for sub 100 CO2s

I can see the day you’ll pay £1000.00 per year to tax a Cayenne or Range Rover, luxury saloons and super-cars.

Visit www.vca.gov.uk or search “ACT ON CO2” Nobody can act astonished at VED costs because these sites have been publishing the discussions.

MOT and replacing parts is more or less the same thing.

Think this is rough justice? Imagine rolling your 3-piece suite – which may have cost thousands – down a hill. How many inches do you think you’ll travel before it breaks up.

If you travel at any sort of speed – ignoring road surface – you tyres and brakes will inevitably wear out, followed much later by suspension and steering parts. The durability of your exhaust system is a matter of care and luck.

Incidentally ‘CARE’ can save you at the least, £2000.00 over 3 years. I’ll calculate it for you another time.

My previous post explored fuel consumption which leaves routine servicing costs

Routine Servicing

How can anyone be surprised by a £1,000.00 service bill when they paid the best part or more of £30,000.00 for the car. You sign-up for the brand and you accept the cost. Most Audi, BMW and Mercedes drivers accept the cost because their employees pay – they’re rep-mobiles. The same goes for fuel prices and vehicle excise duty. 

But what if you’re a private owner? If you’re minted or pretending to be it may be a badge of being so. But what if you’re a bloke, a man in the street, an ordinary person – a girlie even – who actually needs a big car like an Epica, A6, 5-Series or E-Class? Thankfully, along with Chevrolet UK’s honest new car pricing policy, you can buy 3 years 30,000 mile servicing for £299.00 for a new Chevrolet Epica.

How do you take the surprise out of car maintenance?

• Insurance – you gotta shop around in advance of renewal.
• Tax – VED – it’s only going to get more expensive.
• MOT and replacing tyres, brakes etc, which inevitable wear out. Try and predict wear. My own opinion is you’ll be lucky to get 20k from the front tyres and brakes – 40 from the rear. Suspension and steering are a matter of luck and care.
• Servicing can be expensive or fixed in advance by Chevrolet
• Fuel – see my previous post – having posted VCA figures, my observations are you’ll struggle to achieve government figures – maybe the topic of another post.

I suppose to take away the surprise of cost you put a little away each month.

Regards

Ralph

www.chevroletreviewsandprices.co.uk

In my previous post I mentioned the press asked why Chevrolet launched upper-middle sized car into the market in the form of the Epica.

Here’s a silly answer – fuel economy.

When you look at this class of car – which with the right badge on the bonnet is called an executive car – you think of prestige, high specification, refinement and quality. You wouldn’t think – economy.

You might also think – when you encounter an E-Class – you great big gas guzzling German glutton.

You may never let a BMW pass or let them out of a side turning and think those softer brands like Saab, Volvo and Audi are no more than descendants of German wolves in sheep’s clothing. They’re just Jags – poor men’s Rolls Royces – we say with envy.

But I’ll tell you what, with a diesel engine these execs are getting near the same gas mileage you’re getting in your small Corsa or Clio.

Let’s make mpg comparisons to understand this –

The models in the chart below are upper-middle size cars with the smallest diesel engine option and manual transmission. The mpg figure is the combined figure. The fuel cost of driving 12,000 miles is based on diesel price of 113p/litre

What mpg are you getting out of your small car? The cars referred to below have petrol engines and manual transmission

Here’a cruel comparison

The fuel cost of driving 12,000 miles was calculated by the VCA using the combined fuel consumption figure and an average fuel price of 106p/litre for petrol.

Needless to say, ordinary big cars are way more economical than similar spec SUVs. Buyers have deserted the upper-middle sized car for SUVs and MPVs – so what do they get –

The models in the chart below are the above medium size SUVs with the smallest diesel engine option and manual transmission.

Currently fuel prices are more than 15% higher increasing your fuel cost of driving 12,000 miles by the same percentage.

The figures above were copied from tables compiled by the VCA www.vca.gov.uk. Every effort has been made to ensure accuracy. The VCA and I cannot accept liability for its accuracy. Users who rely entirely on the information do so at their own risk. Importantly, wheel size will make a difference to the above figures.

As the VCA point out the figures above are not representative of real life driving. The fuel consumption you achieve on the road is unlikely to be the same as the official test results.

The figures are for the comparison of different car models. The VCA say it is not advisable to rank a number of vehicles for which similar figures are quoted.

Did I mention you don’t need 28K to buy an Epica, they start around the 13/14 mark. That’s about a grand more than a very nice Clio or Corsa. The Epica may be low on prestige but people will let you out of side turnings. They’ve more spec than most drivers understand. You can measure refinement by noise level and define quality by simply asking does it tick your boxes. Oh, and you save 14K you’re not paying interest on or can earn interest on.

How much fuel does £14,000.00 buy?

Regards

Ralph

www.chevroletreviewsandprices.co.uk

When the Chevrolet Epica was launched the press asked if we really needed another upper-middle sized saloon on the market. It’s true the demand has been for MPVs and SUVs. 

There are many reasons car buyers look to MPVs and SUVs. The interior space in a 4.8 metre saloon or hatchback car can be found in a 4.6 metre SUV or 4.5 m MPV. Sometimes there’s an equal feeling of comfort. The tough truck appearance of SUVs seems to appeal. And there’s a playground hierarchy of prestige attached to SUVs and MPVs. An ordinary car is old hat.

However any orthodox car has one important safety feature
unachievable by SUVs and MPVs.

Car buyers think of safety in terms of crash protection and mistakenly believe MPVs and SUVs are better because they appear bulkier. Nothing could be further from the truth. Some MPVs have an excellent crash protection score. Most MPVs are amongst the worst vehicles ranked. SUVs struggle to achieve the highest car crash ratings.  Most are worse than poorly rated MPVs.

The upper-middle size class of car has led the way in crash protection car safety. I’m not claiming the Epica a leader in car safety. I’ll gladly give that to the Laguna followed by the E-Class. But that’s not the safety issue here.

It’s the same story when it comes to preventing a car accident happening. Cars handle better than SUVs and MPVs. OK, you can specify ABS and ESP but the difference still remains. But again, it’s not the point.

Here’s the real difference. Something ignored by car buyers. It’s a car safety aspect buyers never ask about. PEDESTRIAN SAFETY

The aspect of car safety that’s totally ignored is pedestrian safety.

Cars have a low-line style with low bonnets/hoods that sweep up to a sloping windscreen. SUVs have a high vertical truck-like style. MPVs are somewhere in between.

This means –

When a pedestrian, child, jogger, hiker, suddenly appears in front of a moving vehicle and is hit –

• The SUV will run them OVER – they will be knocked DOWN and the person will pass bounce UNDER the SUV.
• The MPV is more of a balancing act.
• The boring, everyday, orthodox, car will take a pedestrian’s legs from under them, roll them OVER a soft low-line bonnet and catch them in a collapsing windscreen if they don’t continue to roll up the sweeping screen onto the low roof.

The funny thing is – and it’s not funny – most mums transport their kids in SUVs and MPVs in the mistaken belief they’re safer. It’s not necessarily true. The truth is SUVs and maybe MPVs can be a danger to other people’s kids.

Here’s an OUT for SUV drivers. Being you’re not as safe as you think, drive less aggressively. Travel at the speed of a tractor when on town tarmac.

Regards

Ralph

www.chevroletreviewsandprices.co.uk

Safety is an important car feature. Luckily research reveals car buyers –

1^st think if a car fits their lifestyle,

2^nd work out if they can afford the desired car, and

3^rd ensure its safe.

4^th They then think about stuff like reliability, performance and economy whilst denying style and prestige matter.

It’s the best way to buy a car and exactly what car buyers should do because if they get the first two wrong and it forces an unplanned change the cost will be enormous.

Safety has 4 aspects:

1. Driver education. Back in 2005 only 1% of those surveyed were aware of ESP as an active corrective safety system and how it might save their lives – the subject of this post. ESP is standard on a Chevrolet Epica VCDi.
2. Awareness. Another aspect missed because we think of these car features as comforts or convenience – Electric headlight beam levelling, High-level LED centre brake light, Heated rear window , Intermittent rear window wash/wipe, Two-speed windscreen wipers with variable intermittent wipe,Tinted glass, Manually foldable door mirrors, Electrically adjustable door mirrors
3. Prevention. ESP guards against car accidents. It prevents rather than protects.
4. Protection. We normally think of safety in terms of : Driver’s airbag, Front passenger’s airbag, front seat side impact airbags, Height-adjustable front seat head restraints, Height-adjustable inertia-reel front seatbelts, Seatbelt pretensioner system, Three inertia-reel lap and diagonal rear seatbelts, ISOFIX child seat system for outer rear seats incorporating top tether (does not include child seat), Adjustable outer rear seat head restraints, Child-proof locks on rear doors.

What is ESP? It’s an Electronic Stability Program. Manufacturers try to differentiate themselves with different names for what is the same system. They may call it DSC, PSM, VSA or VSC but it’s ESP. Chevrolet call it ESC on the Epica. It’s wrong because ESP’s life saving potential should be CLEARLY understood.

• American studies revealed a staggering 67% reduction in single SUV accidents when fitted with ESP.
• German studies show 25% of all injuries are due to skidding. 60% of fatal accidents are due to side impacts caused by skidding.
• Daimler-Chrysler reported a 42% reduction in accidents since introducing ESP as standard on Mercedes-Benz in 1999.
• Toyota concluded ESP could reduce driving accidents by 50%.
• VW think it could reduce fatal accidents by 35%.
• Renault stated ESP works in the event of under steer or over steer, and when avoiding obstacles.

The system was first developed in conjunction with Mercedes-Benz who launched it in 1995 in their S-class.

Here’s what might happen with and without ESP.

Vehicle without ESP:

1.        Vehicle approaches an obstacle.

2.        Vehicle goes of course, enters oncoming traffic lane and driver loses control.

3.        Counter steering causes the vehicle to go into a skid.

Vehicle with ESP

1.        Vehicle approaches an obstacle.

2.        Vehicle threatens to break away. ESP intervenes and restores full steerability.

3.        Counter steer results in threat of renewed breakaway. ESP intervenes again

4.        Vehicle is stabilized.

Electronic Stabilty Program (ESP) supports the driver in nearly all critical driving situations. It detects skidding instantaneously and actively counteracts it. ESP goes beyond ABS and traction control systems (TCM). Sensors read desired steering direction, the vehicles rotary movement and lateral accelerations.

From this data the control unit calculates the actual movement of the vehicle, comparing it with the drivers’ desired direction. If the values do not correspond, ESP reacts instantly without any action on the part of the driver. It brakes individual wheels. Skidding is counteracted and the car remains safe on its desired course.

ESP is a standard fitting on the Chevrolet Epica 2.0 VCDi. If you’re considering a new car without ESP think about ordering your new car with it as an option – it costs about the same as metallic paint.

Regards

Ralph

www.chevroletreviewsandprices.co.uk

Having started this blog about the all-new Chevrolet Epica, I don’t seem to have got going. I need a plan. So I’ll be posting about:

1. The Epicas size and type. It’s a big family saloon car. Do we need another one? It’s an interesting question I’ll be attempting to answer.
2. We’ll also be looking at the Epicas style which appears very rational in our bling-bling world.
3. Where the Epica stands in relation to other cars seems to have perplexed pundits. We’ll see it’s a member of a new class of car – the upper middle – but doesn’t this simply mean value executive?
4. So much for exterior appearances. Well thought out interiors are for SUVs and MPVs. So how does a traditional car like the Epica fair?
5. Having looked at both the exterior and interior – how does this boat handle? What’s the Epica like to drive? How does it perform?
6. If the Chevrolet Epica is the right type of car for you the next question must be, is it affordable? What about depreciation, the opportunity cost of the Epicas price and what about vehicle excise duty, insurance groups, fuel economy and servicing costs.
7. Let’s say it is the right type of car for you and it’s affordable, the first question you must ask is, is it safe?

So I’ve got a plan. I’ll post from the bottom of this list up so when it’s complete it should make sense as in the order above.

My first post – about safety – should be an education as it’s about a safety aspect 99% of motorists were not aware of when surveyed in 2005.

This safety feature is still an option on the majority of new cars for sale. However it’s only the price of metallic paint and does a million times more for good looks.

You can read my Chevrolet Epica Review on one page at www.chevroletreviewsandprices.co.uk and find links to 0% finance.

Regards

Ralph

RalphSpence@chevroletreviewsandprices.co.uk

I’ve enjoyed driving small cars like the original Mini and later the Hillman Imp and Simca 1000. When the Ford Fiesta was announced I thought it the best thing ever. I changed my mind when the small Pugs came along. I later thought the Clio was the absolute answer. Then there’s today’s Corsa. I’ve always thought this class of car is all you need.

But when it comes to suiting everyone you can’t beat the medium-small cars. Top dogs have been the Ford Escort/Focus and the Vauxhall Viva/Astra. The Golf upped the anti but got boring. The French and Fiat have never managed to quite get there.

The small and medium/small classes of car are great because they usually deliver more than they promise. However they are compromises of the proper medium size car. This class has been the benchmark in the UK. The Ford Cortina, Sierra and Mondeo holding the number one sales slot. Many have preferred the Vauxhall Victor, Cavalier, Vectra range which has got its nose in front on many an occasion. Peugeot’s 4 range and later the Renault Laguna have been serious competition with the VW Passat slowly creeping to the fore.

It seems human nature to want something better, improvement or something bigger. I suppose this is the appeal of SUVs and MPVs. I personally dismiss them as vans and trucks. For me if you want something better you look to the upper middle class executive car for improvement. It seems to me if you bought this class of car you’d have no regrets.

Exec cars perform; have space, style, class, comfort and safety. The only thing is the cost. But we now have the Epica. A half-price Jag, E-Class, 5-Series, A6, Volvo or Saab. It’s the Epica’s amazing value that makes it so special. It has the performance and space of the cars in the executive upper-middle class car without the cost. What a contender. The Epica is like the old Ford, Vauxhall, Rover flagship cars. Ford gave up this market to buy Jaguar and Volvo. Vauxhall’s parent, GM bought Saab.

I still don’t what I’d buy if I had to. Maybe …

Regards

Ralph

www.chevroletreviewsandprices.co.uk