Depreciation

[Gary217]

Hi - been lurking around this forum for a bit, originally because we considered a Cali beach but we do long camping trips so we couldn't make it tick all our boxes.

We have a VW T5 converted van - nice conversion but not up to VW Cali standards - but it is a bit long in the tooth and is getting costly to maintain - every month seems to bring another bill, plus we're worried about the inherent lack of relibilty that comes with things going wrong - we do tour Europe extensively (Croatia, Italy, Spain were the extremities this year).

So we're considering forking out for a California, but we're not in the league of finding such a move easy financially. So our question is, assuming around average miles (for a car) of say 12k pa, does anyone know what the depreciation on a new Cali is, as they seem very hard to price secondhand?

(This is part of a lot of considerations where we have to try and separate our heads from our hearts, such as run our existing van and keep a maintenance budget; buy a secondhand Cali (if you can find one....); buy another lower mileage or new van and convert.)

Any pointers, gratefully received thanks.

 

[calikev]

Hi Gary
Good question by the way first of all you will find on here most people will rave about the Cali me included. I too had a proffesionally converted t5 and loved it until I saw a Cali then I was
Smitten. When I traded in my conversion I lost £8,000 in 6 months basically because vw didn't recognise the conversion. A valuable lesson learned. The Cali on the other hand has only lost about £2,000 since I have owned it. I have heard of people buying a new Cali using it for 6 months
Finding out its not for them and making a profit when selling it.i would say if you could stretch
To a used Cali you won't regret it.there are an awfull lot of conversions out there some good some not so good at least all cali's are basically the same so if you do have a problem with it chances are someone on here knows about it. Cali's do hold their value extremely well so many people find a new one is only a couple of thousand more.it's simply a supply and demand thing. Good luck with whatever you decide

 

[Californiaman]

It is arguably not an easy decision for anyone - even those in a position to pay cash. There are arguably always other priorities and/or things to buy etc. Many of these can be offset with the "you can't take it [money] with you" / "No pockets in shrouds" arguments.

Sounds like you already know plenty about camping in a similar sized vehicle so there shouldn't be any concerns around "will it work for us" "will we like it" etc.

Only you can really answer the value for money equation. Good luck!

 

[Gary217]

Thanks for the replies....you make good points about how nice the Calis are and why people rave about them - we do like them, hence my comment about separating head and heart. It would be cash purchase so there's no financing charges - just loss of about 2.3% on the money at current rates, so c£1K pa.

Heart says we love camping, we don't want bigger than a T5 so lets do it and get a Cali; head is saying you're not millionaires so you need to look carefully at the finances.

Californias seem to hold value well....but is that the case for the private owner or is it just the dealers who can get these high secondhand prices...

Then again, a more difficult sum is what if we keep it for say 10 years - which will we fare better finacially with a conversion or a Cali ? (Again, I know We'd rather have the Cali from a 'heart' perspective but if the electronics start going wrong out of warranty...eek).

I also appreciate the comment, it's our decision - so true, but again appreciate thoughts/views to throw into our confused mix even though this forum is probably and understandably biased towards the Cali. We're in no hurry as it's the end of the season but want to decide and act before next Spring (even if that decision is to spend money on the existing van trying to get it properly sorted...not sure about this option though as we might be throwing good money away on this).

Obviously, there's no cheap way of motoring - it's just a case of looking for the best financial options (i.e. least cost) and then complicating it with the emotional aspects of new vs used etc. :?:

 

[Californiaman]

There is also a question of how you cost/value your time. For me, my weekends are extremely valuable - in that respect I get superb value from the Cali. Although there is no direct cost comparison, we've done over 150 nights away since Dec 2010. How much would that have cost me in B&B / Hotel (even if I had wanted to, which I wouldn't much!!)

Buy it, you know you want to....



I expect mine to worth £0 after 10 years. Anything else is a brucie bonus.

 

[KernowLad]

There is also a question of how you cost/value your time. For me, my weekends are extremely valuable - in that respect I get superb value from the Cali. Although there is no direct cost comparison, we've done over 150 nights away since Dec 2010. How much would that have cost me in B&B / Hotel (even if I had wanted to, which I wouldn't much!!)

Buy it, you know you want to....



I expect mine to worth £0 after 10 years. Anything else is a brucie bonus.

Agreed. We also find ours a brilliant family vehicle, regardless of the camper bits. Best decision ever.

I've learned not to worry too much about residuals - just expect them to be bad and sometimes get a nice surprise.

Having done plenty of nice hotels/guest houses/whatever, Cali life simply suits us better. On a recent trip to Scotland we spent one night in a B&B (for a wedding on Iona - no cars allowed over!) and really pined for the Cali!

 

[Gary217]

With you all the way re usage and benefits against B&B - we find the other big saving is on food as we cook in the van most nights (eat out say twice a week max); we've done about 100 nights in our van this year and have travelled as far East as Dubrovnik (BEAUTIFUL) spending 30 nights straight through in the van with no B&B or similar.

So, we're bought into the lifestyle, we like the T5 as a vehicle, we recognise the cost benefits, just trying to determine the financials.

interesting comment above....'expect the van to be worth £0 after 10 years...'

That is a good way of looking at the costs, as the money is all but tied up or spent until we sell so can do calculations on this basis;

- Cali = £40K or more written off - ie £4K pa
- Pre done Conversion = £27k to £35K written off - ie £3.2k ish pa
- buy van and have it converted = £23k written off ie £2.3K pa
- keep curent van = £15K (current value) written off ie £1.5K

...but then have to factor in repair costs

- current van is a bit costly at the mo - say £2.5k pa
- the 'conversion' options are based on new or very nearly new vans - so minimal costs at the mo, but could get more costly as they age so lets say over ten years about £1K pa average
- Cali, hmm, more to go wrong and seen horror stories on here about the electrics so...??...lets say about £1.5K pa average over ten years.

Results
- Cali =£55K
- Pre Done conversion = £42K
- have a conversion done = £33K
- keep van = £40K

Obviously, it's all a bit subjective and ignores residuals (on the basis the money's tied up until then and 10 years is too long to plan for the resale value)....but some interesting answers.

Again - I'm deliberately avoiding the emotional aspects...but if this stacks up then I'm getting close to having some facts and I can start to ask - is a cali worth £32k more than having a conversion done? Is a cali worth £15K more than keeping my current van?

If anyone can spot a flaw in my logic - please shout....the cali's beginning to look interesting!!

The next step, I guess, is to play with the keep it for 5 years and factor in residuals...phew!

 

[choplee]

I think the interesting thing is that the Cali is the only true Vw campervan that vw have made themselves making it a different beast from a home brew or conversion .. I'm not saying its better,but if it works for your needs then the Cali is worth a look for loads if reasons

 

[2into1]

Well, I can spot a flaw in your maths....
You've assumed a zero residual.
A well maintained Westfalia California at 11 years old is still worth between £10k and £20k depending on model and who's selling it. The VW Cali should behave in a similar way. Use £15k for now.
An 11 year old home-conversion is worth about £4K, so you've £11k to add back into your calculations.

The cheapest thing to do is to keep your current van, even if you are experiencing an expensive spell of maintenance.
If you are changing, and changing for anything based on a new (or nearly new) van, then the Cali is the best bet.

Finally, the biggest driver of depreciation hasn't been mentioned, and that is the cost of the base vans, and that was (and still probably is) influenced by the Euro to £ exchange rate. If you bought one of the first Cali's you were quids-in, because they increased hugely in cost over the next 5 years. I know someone that ran his to 85k miles and lost £2k! But don't try that now.

 

[Gary217]

Thanks - you're right I have ignored residuals, but that's because I won't realise that for some years so the money's sort of tied up and untouchable for the short term, but yes it is something to factor in.

Also, cash flow wise, the Cali gives us the biggest hit now.

Any idea what a five yr Cali would be worth - that's a residual/depreciation figure that I would like to do a calculation on?

 

[2into1]

Gary, I think your brain works like mine. I try to analyse everything to make the right decision.

I don't know what a 5 year old Cali will be worth, but I reckon it will have depreciated less than any other new(ish) option. Your cost of capital, if it would have been in the bank, is negligible, so spending £35k or £40K is not going to swing things.

For my 2p worth,
Cheap = keep your T5. It will be as just as big and comfy as a brand new Cali. You'll continue to have fab holidays. You'll stress less if anyone spills a drink.

Cool = buy a nearly new Cali in November-January, and negotiate very (VERY) hard. The end of the season brings new Cali's to the market each week. You'll look great, you'll appreciate the fab design and quality but you pay for it vs. your existing T5.

Daft =Buy any other new or nearly conversion. You'll lose a packet.

 

[KernowLad]

Or do what we did - buy pre-reg. Ours had been registered 3 months before, had 16 miles on the clock, saved us over £7k off list.

 

[MKRW]

I think you also mentioned missed new cali under warranty for 3 years remove 1.5 k per year saves you 4.5k on the calculation and makes the cali look a little more attractive vs. your other options.

I would also hesitate to suggest over the next couple of years personally I would not expect to be picking up 1.5k of cost for repair.....so you may be a little high in your assumptions.

I think your being way too analytical and you'll never make the leap.

All I can add is whilst i went through all the what if scenario's about this time last year. Buying new picking up on a new reg in March this year ....I'm still smiling and have not regretted 1 minute of the initial outlay.

Good luck in your decision.

 

[MKRW]

Sorry scratch what I just said. Just remembered how much extra I've spent on all of the extra toys to go in the Cali... If you add those I am sure you'll decide its not for you....... :laugh2

 

[Gary217]

for all the input....perhaps I'm analysing it a bit, but i'm an accountant :cool .... :laugh2 so it's what we do. Got lots of food for thought here so will be playing with it over the weekend and grateful for the various points of view.

There's a standing joke that the best accountants are those that ask the question 'what do you want the answer to be' and then do the calculations and give you that answer...So starting with the answer that, actually, I do want a Cali (pref new or demo) all I've got to do is make the figures fit! Simples!

Now, where's that extras list.....?

 

[choplee]

I see accountant in your last post and guessed you had to be in some sort of money business lol
Maybe over analysing the Cali will be its short fall ... Lol
If what you got works why change it ,but you must be after something better or different otherwise you wouldn't be on the Cali forum ...the only bus that will retain its money if people still want to pay the money for them are the T2's and if we fall out of love with them and the scene then prices will tumble ...

 

[bernie]

A vital component in asessing depreciation is a lok at the Euro v pound exchange rate since Calis are made in Germany. When I bought mine 5 years ago, £1 was about 1.4 Euros.
Then it went to about 1.1 so to buy the same vehicle new you had to pay quite a bit more, which has a knock-on effect to the second hand market, meaning mine held its value very well.

Conversely, if you bought at a weak pound, then sell at a strong pound you will lose out.

Conclusion - buy when the pound is strong against the euro

Overall, the Cali is not cheap to run but is good value if a family is using it for holidays.

 

[Hubert]

Will the strong residuals hold ?

I have my doubts, I think they will soften a little but will still be good.

My reason :-
I bought my first Cali in 2009. It was built in Sept 2008 and I first saw it in Oct 2008. It had excellent spec, 174ps, most bells and whistles silver metallic,certainly didn't need any other options for me. I was looking at all campers and small motorhomes at the time. Went back to view it numerous times. It was still for sale at the end of May 2009 when I'd finally decided to buy it. Obviously got a very good deal on it (VAT was only 15% at the time). Would a similar spec new van sit in adealers showroom for that length of time now ? I doubt it due to their popularity.
VW are obviously selling more each year and they will be more readily available on the second hand market which will affect the prices.

Hubert

 

[WooburnCalifornia]

I think so, I have been monitoring used prices and the T5 Cali is still selling well even though the T6 is now here. From my calculations the best time to buy a Cali is at 1.5 years old as the worst depreciation has been done plus you still have a 1.5 year warranty. I would never buy brand new unless I planned to keep it for 10 years or so.

 

[Chinny]

Hi I've also got a t5 conversion was saving for a California but realised I'd be 87 by the time I got their so my conversion is know getting a roof Vw of course I use mine a lot it's saved me thousands I can survive on my leisure system for two weeks not including fridge designed it myself we've got three young children so we've got a full width Rocknroll bed with the kitchen behind drivers seat works well so by getting a roof on I've got a plastic California but it suits us a lot cheaper and we can sleep 5 at least at weekends then when I'm away on my own I've got tons of room