‘Get a second hand car for cash and run it into the ground’ is a well-rehearsed mantra of personal finance; and as most received wisdom it doesn’t withstand scrutiny. We believe that getting a new car makes financial sense – particularly when the previous one was a serious and unexciting to drive, petrol guzzling Mercedes. Yeah, it would have probably lasted for a long time; but frankly, we didn’t want it to – by the time we added up the money spent on petrol, service and maintenance, and insurance we were looking at a lovely, sunny holiday in the Caribbean; and we don’t drive around much!

So, when we recently changed cars, we had one objective – to have a new car that was economical yet practical; particularly for city driving which is what we mostly do anyway.  We have been there before – mainly for Maria we had a second car that was generally a small Fiat.  We happen to like Italian cars – they have that essential driveability that makes them fun.  We have also had a couple of Mercedes: our last car was a Mercedes A160 which was OK, not particularly fun and also rather thirsty – we have written about this before.  And we really don’t need two cars – want perhaps but that is another question!

We rather liked the new Fiat 500 but it is a little small, didn’t get all the rave reviews and is actually quite expensive.  We considered a lot of other cars such as the rather dated Toyota Aygo but eventually settled on a Škoda Citigo.  Why?  Well it does nearly 70 miles per gallon (58 miles per US gallon, 4 litres per 100 km).  It is solidly built, quite large, carries four people in comfort, includes all sorts of extras like electrically heated (front) seats, satnav and, although I haven’t yet tried it, I suspect we can get at least a small washing machine in it.  We had to get it built for us – there was no car to our specification in the UK at the time.

It is also cheaper to insure.  Now we are at the older end of the age spectrum so apologies to our younger readers who may choke on their corn flakes or gurgle in their Pimms.  But when we looked around, the particular version we have selected was also in the bottom insurance group.  You can check this yourself at 1^st Central Insurance  – just over £200 ($300) a year fully comprehensive but this will depend on your mileage, use and age of course.  So what with having no road tax and only having to carry a teaspoon for the occasional visit to the petrol station, we are very pleased and can happily smirk at our green friends in their old bangers!   Maintenance is also cheaper so we are saving at least £350 ($525) a year apart from nearly halving our petrol costs.

You see, I know people say the cheapest motoring is to buy a second hand well maintained vehicle (if you can find one) and run it into the ground.  But once a car is 6 years or so old, repair bills start mounting up and you are driving a less ecological vehicle that is costing you real money.  So we think it is better to renew a car, getting the best deal you can.  For the record, we are contract hiring the Citigo and it costs us £139 ($209) a month including VAT and maintenance for 3 years.

Essentially the Škoda Citigo is a Volkswagen Up! built to the same standard in the Czech Republic and £500 ($750) cheaper.  Our friend who knows about cars says its parts come from the same bins.  We have other friends happy with their newish Škodas.  The three-cylinder 999cc engine (all of 61 cu.in to US petrol heads!) may sound a bit hoarse at times but it is very gutsy.  While waiting for it to be built (and for the new 13 registration plate in March) we had a Škoda Fabia on hire which, while quite an old design now, was still a lot of fun to drive.   At another time we also hired an Aygo and that was not impressive – noisy and cramped and of course that goes for the Citroen C1 and Peugot 107 as well as they are the same car built in the same factory.  No, the Citigo is very nice and fully justifies its Car of the Year 2012 award.

So there you have it – a new car that will cost us a lot less than half the previous car, will have no repair bills for some time and looks the part.

What is your approach to cars?

Related posts:

Financial sense and financial sensibility: repairing appliances Look in the mirror… and meet your main asset Castles and homes: when does it make sense to rent? Does it have to be so complex? Three mental shifts to simplify your financial life Should we sell our car: please help us make up our minds