I bought an expensive, quality car in 2010, paying cash that I actually had in the bank, with the aim of keeping it for fifteen years. During that fifteen years, I intended to look after it and generally cherish it. And to keep faith with it, so that all bills along the way, no matter how horrendous, were met.
It would consume a small fortune, but I judged that this was the least expensive way of owning a lovely car. In the course of fifteen years I would reap all the long-term benefits of completely unrestricted personal use. I wouldn't have to waste money every three years or so, buying a replacement vehicle under some contract arrangement. I would also avoid periodic car-buying hassle; the mental wear and tear of of driving to avoid the slightest damage to the bodywork; and not least, I wouldn't be watching the milometer fearfully, in case I went over the stipulated contract limit, with ugly financial consequences.
You can say to me: Huh! That car cost you £34,000 seven years ago. You've spend thousands on running costs every year, and will continue to do so. And now - with the government's announcement that by 2040 diesel cars will be banned from Britain's roads - your fine Fiona will have a depressed resale value forthwith, and most certainly a zero resale value at the fifteen-year mark. How is that a good financial position?
Well, I assumed back in 2010 that, after fifteen years, Fiona's resale value would be negligible. So nothing has changed there. My savings plans contemplate another cash purchase at some point, unassisted by loan finance, nor buying through a contract-purchase scheme, and without counting on a significant trade-in value. The act of trading-in would be only to offload Fiona at minimum personal inconvenience - rather like you'd hope to get rid of a worn-out washing machine without personal effort.
Besides, do your sums. New cars are not nearly as cheap as they look. Look at the total of (a) the initial payment needed for a contract-purchase; (b) the ongoing monthly payments, with a realistic mileage loading; and (c) the separate amount that has to be put by to fund the initial payment on the next contract-purchase. And there may be linked insurances and other fees to add to that. It's all a huge amount of money to pay out over the space of three years. Far more than I'd be paying to keep Fiona on the road, fully serviced, and looking smart.
Mind you, a time will come when Fiona's time is up. Or some change in car taxation, or fuel availability, or the introduction of a generous scrappage scheme (for what will be by then 'the older diesels') will make it worth replacing her. I will at that point be in the market for a new car, through an outright cash purchase if I can manage it, but in any event using a purchase method that ensures that I can continue to have absolutely unrestricted personal usage. I need that usage-freedom for my caravanning, which will surety continue for as long as I am physically able. And to pursue it I must have a car that has the range, and grunt, to pull my luxury hotel room on wheels. I don't think purchase-contract agreements normally countenance the fitting of towbars, and associated computer modules, and the regular tugging of a heavy trailer across the length and breadth of Britain!
It's clear where things are heading. Electric cars are going to be rapidly developed by every manufacturer, and governments all over the world will in any case make it easier to own and run an electric car, and progressively harder to run a petrol or diesel car - with a cut-off date for on-road use already announced. This must surely be the preferred strategic policy of all Western-style governments - it restores the supremacy of their technology in global affairs, and markedly reduces the influence of the oil-producing countries. (Oh yes, it helps the planet too)
I wouldn't be surprised to see major breakthroughs soon in methods of powering the electric motors that turn the wheels. That's actually the chief issue: where to get the electricity from. Just now, the method most used is to plug the car into the mains and charge up some on-board batteries, supplemented by various on-board generation methods. The ideal for a big range (of several hundred miles) is to maximise these on-board methods.
But I could use even a present-day medium-range electric car - well, a very expensive Tesla anyway - for not only for my day-to-day Sussex motoring, but also my caravanning, provided that (a) I kept my speed down; and (b) I went only to sites where I could plug the car in overnight. Both (a) and (b) are easy to contrive, even in 2017.
An electric car with heavy batteries is in fact rather suitable for caravanning: it's an outstandingly stable car-caravan combination (the car must be heavier than the caravan), and the torque needed to pull the caravan along (and up hills) would be more than sufficient (such is the nature of electric motors).
So I rather think that Fiona's retirement will signal the moment when I leap straight from diesel power to pure electric power. And that my future car-buying strategy - which of course shapes my overall savings plan - needs to be one that has in view an electric car from a top manufacturer.
Given this decision, it seems a waste of money to buy an interim replacement for Fiona. I would do best to keep her going until the electric car I need comes within reach. It would be very nice if, with rapid development and rapidly rising sales, it becomes possible to buy what I want eight years from now, in 2025, for £30,000 or so. I could pull out the stops for that, and try to get most of that cash together by 2025. Ah, wouldn't that be a good 73rd birthday present to myself?
But it will probably be at least ten years before a suitable electric car comes within my reach. Will Fiona last so long? Well, she's a Volvo. She'll be seventeen in 2027, and an old lady, but surely not a frail and bedridden old lady.
Clearly it's a race against time: on one hand, Fiona's gradually failing health, despite her likely longevity; on the other, the manufacturers' desperate drive to get affordable and capable electric cars to the mass market. I'm hoping that the manufacturers win.
Of course, the planet must win too, although you do wonder what can greenly be made out of all those huge piles of redundant motoring metal. And indeed whether Britain can produce enough electricity for those nightly charge-ups! (But let's say it can)
I do wonder what the oil-producing states around the world will do. Their oil sales (and therefore their main source of revenue) will shrink to only what lorries, ships and aircraft need by way of fuel. Their ruling elites have made their fortunes, and won't suffer, but what about their ordinary people? What will they do? Migrate?