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  1. #11
    Grumpy Git, Not Old Yet...
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    Cylinders require testing on a cyclic basis. I run a set of twins, three stages, a suit bottle and a couple of ropey old 15s as an air bank for filling air guns, occasionally running air tools, filling the suit bottle when I forget, etc.

    I have figured out the cost and frequency of each cylinder's service/test requirements and worked it out as a monthly amount, along with the cost of servicing regs, replacing hoses, annual memberships, insurance, etc. That amount goes, every month, from my current account into an online saver account. The amount needed for the diving upkeep fund is reviewed every six months and would only change if I buy more cylinders. Even then, the cost of a hydro plus O2 clean (£56), a visual plus O2 clean (£45) and 2x O2 cleans (£29 each) over 5 years (£159) spread over 60 months is £2.65.

    If a cylinder is 6 months old by the time you receive it, that's less than £16. And here's the newsflash... The cost of ownership, over the same 5 year period is EXACTLY THE SAME: One Hydro+, one Vis+, 2 O2 cleans = £159.

    Unless you are planning on selling your cylinder on before it needs testing, what does it matter at what point in the cycle you buy it?
    Strategy without Tactics is the slowest route to Victory. Tactics without Strategy is the sound before defeat.

  2. #12
    "Three Sheds" Janos's Avatar
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    Quote Originally Posted by Ian_6301 View Post

    If a cylinder is 6 months old by the time you receive it, that's less than £16. And here's the newsflash... The cost of ownership, over the same 5 year period is EXACTLY THE SAME: One Hydro+, one Vis+, 2 O2 cleans = £159.

    Unless you are planning on selling your cylinder on before it needs testing, what does it matter at what point in the cycle you buy it?
    Itís not exactly the same. You have to divide those costs by 54 not 60. Or you take into that someone else has got the benefit of 6 months at £2.65, so technically the cylinder should be £16 cheaper.

    (And youre also assuming the secondhand price of a 5 year old cylinder is the same as a new cylinder)

    Janos

    PS. I would get out more but Iíve got accountancy exams in a couple of weeks.
    You can lead a horse to water but you can't climb a ladder with a large bell in both hands - Vic Reeves
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  3. #13
    Grumpy Git, Not Old Yet...
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    Quote Originally Posted by Janos View Post
    Itís not exactly the same. You have to divide those costs by 54 not 60. Or you take into that someone else has got the benefit of 6 months at £2.65, so technically the cylinder should be £16 cheaper.

    (And youre also assuming the secondhand price of a 5 year old cylinder is the same as a new cylinder)

    Janos

    PS. I would get out more but Iíve got accountancy exams in a couple of weeks.
    No, over a 5 year period, it's 60 months. That's 5 years from the day you buy it, not from the day it was made. It doesn't depreciate unless you sell it, or unless you junk it. Which I have never done.

    Even if you did, the cost of ownership for 5 years is £159. The depreciation on the value of the cylinder, for a given state of test, is maybe £50 on a single? If you keep the thing for 10 years, the depreciation is 13.5% of the total cost. It's peanuts by comparison.

  4. #14
    "Three Sheds" Janos's Avatar
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    Quote Originally Posted by Ian_6301 View Post
    No, over a 5 year period, it's 60 months. That's 5 years from the day you buy it, not from the day it was made. It doesn't depreciate unless you sell it, or unless you junk it. Which I have never done.

    Even if you did, the cost of ownership for 5 years is £159. The depreciation on the value of the cylinder, for a given state of test, is maybe £50 on a single? If you keep the thing for 10 years, the depreciation is 13.5% of the total cost. It's peanuts by comparison.
    5 years is an arbitrary time period. What’s the difference in cost over (say) the first 4 years 6 months?

    I also think we have radically different understandings of ‘depreciation’

    Janos
    You can lead a horse to water but you can't climb a ladder with a large bell in both hands - Vic Reeves
    Hellfins - a friendly London dive club
    My music video: Dive the UK, cos that's the way it is. Huh!

  5. #15
    Established TDF Member Tel's Avatar
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    If it's in the shop just check the date before you buy.
    If it's mail order get them to quote the serial number of the cylinder and the date of manufacture.

    If they then come back with it's eg: 6 months old, that's not new. You've then got the choice of
    negotiating a discount or saying no and going elsewhere or more likely a much younger one will
    miraculously be found after another look

    Bottom line is hang onto your dosh until 100% sure what you are getting.

  6. #16
    M.D., Beaver Sports (Yorks) Ltd
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    Quote Originally Posted by Janos View Post
    It’s not exactly the same. You have to divide those costs by 54 not 60. Or you take into that someone else has got the benefit of 6 months at £2.65, so technically the cylinder should be £16 cheaper.

    (And youre also assuming the secondhand price of a 5 year old cylinder is the same as a new cylinder)

    Janos

    PS. I would get out more but I’ve got accountancy exams in a couple of weeks.
    I'd be pretty sure that certainly in the case of 'older dated' cylinders supplied to the trade by us, with a bit knocked off bearing this in mind, that a discount of £16.00 retail including VAT would not in the vast majority of cases be an issue!! We remain a relatively big player in the market and this may not apply to others...

    In essence, the major issue and increasingly seems to be the case now, is that lots of newbies are learning to dive but not buying as much of their own kit as was usual. Granted cylinders have increased in price somewhat over recent years due to the metals market and currency fluctuations... From what I gather talking to Dive Centres in many parts of the world, this has become common place in what's known as the 'Go-Pro Generation'!!
    Last edited by MW1963; 16-11-2017 at 11:46 PM.

  7. #17
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    Quote Originally Posted by MW1963 View Post
    I'd be pretty sure that certainly in the case of 'older dated' cylinders supplied to the trade by us, with a bit knocked off bearing this in mind, that a discount of £16.00 retail including VAT would not in the vast majority of cases be an issue!! We remain a relatively big player in the market and this may not apply to others...

    In essence, the major issue and increasingly seems to be the case now, is that lots of newbies are learning to dive but not buying as much of their own kit as was usual. Granted cylinders have increased in price somewhat over recent years due to the metals market and currency fluctuations... From what I gather talking to Dive Centres in many parts of the world, this has become common place in what's known as the 'Go-Pro Generation'!!
    MW1963

    Someone is telling you wrong.
    Take the average aluminium price for raw material used in Luxfer scuba cylinders in 2016 was $1600 per tonne and the averaged out exchange rate 1.34 US dollar to GBP

    2015 it was $1670 at $1.52 exchange
    2014 it was $1900 at $1.65 exchange
    2013 it was $1887 at $1.57 exchange
    2012 it was $2050 at $1.23 exchange

    To most folk that is a fall in pricing.

    No matter add the average profit mark up from the factory this being a reasonable 20% from cost.

    But then add the dive importer/distributor mark up and this adds another 60% to the cost (due to this figurative "metals market and currency fluctuations" you mention I guess LOL) But in reality it's a 60% mark up for sticking on a label and shipping out to the dive shops Parcel Farce.

    The LDS adds another 33% to that cost including the delivery charge and the VAT man adds another 20% on the top.

    Personally I think a year from manufacture would be reasonable.
    Last edited by iain/hsm; 17-11-2017 at 06:34 AM.

  8. #18
    Grumpy Git, Not Old Yet...
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    Depreciation is calculated by subtracting residual value from purchase cost.

    If you plan on running it in to the ground, then the total purchase cost is amortised over the life of the asset, as residual value tends to zero.

    If you sell it on, then the difference is amortised over the period of ownership.

    You seem to be confusing opex and capex...

  9. #19
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    Quote Originally Posted by Ian_6301 View Post
    Depreciation is calculated by subtracting residual value from purchase cost.

    If you plan on running it in to the ground, then the total purchase cost is amortised over the life of the asset, as residual value tends to zero.

    If you sell it on, then the difference is amortised over the period of ownership.

    You seem to be confusing opex and capex...
    As an auditor I love these arguments over depreciation. Any time period is valid, what I look for is consistency of applying the calculations.

    I discount my cylinders over an arbitrary 5 year period until they hit £25 (it is a figure I like, no other reason). their cost to my diving after that is just maintenance (running cost).

  10. #20
    "Three Sheds" Janos's Avatar
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    Quote Originally Posted by Ian_6301 View Post
    Depreciation is calculated by subtracting residual value from purchase cost.

    If you plan on running it in to the ground, then the total purchase cost is amortised over the life of the asset, as residual value tends to zero.

    If you sell it on, then the difference is amortised over the period of ownership.

    You seem to be confusing opex and capex...
    Exciting stuff this thread! However I canít let a bone go!

    Your original calculations implicitly assume that the value of a secondhand cylinder with a new test is the same as that of a new cylinder. Itís not. Technically you should factor this loss into your monthly ownership cost. (Admittedly not a big thing over the lifetime of the cylinder -perhaps 75p per month - hence my comment that I need to get out more)

    But fundamentally, in your argument youíre spending £159 for the first 5 years of cylinder use vs £159 for 4.5 years of cylinder use. Clearly the first is better value (by around £16)

    Janos
    You can lead a horse to water but you can't climb a ladder with a large bell in both hands - Vic Reeves
    Hellfins - a friendly London dive club
    My music video: Dive the UK, cos that's the way it is. Huh!


 
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