What car to buy? We were set on buying a used car till to get familiar with the driving conditions here. We thought of buying a really cheap car - something between £1-2K, so that the running expenses will be minimal. Or is it? Consider the major expenses - insurance, road tax, maintenance and fuel. Trust the system here to defy all conventional wisdom.
- I got insurance quotes for the same model of a car of different ages from www.moneysupermarket.com. Believe it or not, the older a car gets, the more expensive it is to insure it (for example, a brand new Ford Focus would cost about £600 per year, 3 year old would cost £700 and 8 year old about £850). Also, comprehensive insurance is cheaper than third party (collision). It did not make any sense, but that's the way it is.
- Road tax is not based on the value of the car (as it is in the US), but on the CO2 emissions. There is not much variation here between old and new cars, but new cars will be slightly cheaper (£150 as opposed to say £200 per year)
- In general, car maintenance bill should be cheaper than US. Manufacturers recommend one service per year here. For Ford models, one of the cheaper and reliable brands, it would work out to £150-200 per year. As you can expect, newer cars have the edge here too.
- Fuel: nothing much to choose here. In general, cars are smaller, less powerful and more fuel efficient than US.
So we decided to look for newer cars. We found many 3-4 year old cars at a Ford dealership nearby - about 10 minute walk from our house. Wife liked Ford Focus hatchbacks since they look very roomy but not too big. I saw a 2006 Ford Fusion with 28000 miles with a price of £5000. It looked smaller than a Focus, but the salesman convinced us that the leg and trunk space are the same in both the cars. It was a little cheaper, so we put a deposit for it. We took a one year insurance through Post Office. With a £100 excess (deductible), breakdown cover and legal cover, the annual premium for the two of us is £627. We had gotten letters from our insurers in US with our claim history, which needs to be sent to them - the quote includes a No Claims Discount for four years. The car feels very smooth, does not have too much power (probably about 110 hp) and has great mileage (55mpg on highway and 45 on local + highway).
I drove the car for shopping on Sunday and wife has been using the car for the last two days. It is a manual, of course, but it not too hard, since we are both used to it. The roundabouts are a pain to navigate. I thought I would do better since there are roundabouts in Boston, but these are not trivial. There are many lanes and I invariably end up in the wrong lane every time. It looks like people are much more courteous here - no honking when you make a mistake. We took a driving lesson each and feel more comfortable. We should seriously work towards getting a UK license.
My theory is that the govt is making it attractive to buy new cars rather than keep your old one. One benefit stateside if you have an old car is that you can forgo comprehensive insurance in addition to it being cheaper. To paraphrase freakanomics, people respond to incentives and the incentive here is that you charge a little less for getting a some what newer car. It might sound weird, but people brought houses when offered an 8k tax credit, so there. And 55mpg? I had to read those numbers again to make sure. Congrats on your steps in getting acclimatized. How are you dealing driving on the wrong side of the road :-)
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