UKC

We have only ever bought second hand cars but the past two have become expensive to maintain

I was considering next time to go for a new car that will hopefully be less costly maintainance wise

What I don't understand are the different ins and out of car finance

Any one care to give me a duffers guide?

Cheers

Also would really like a car that has no road tax, suitable for a family and an automatic - any recommendations?!

In reply to iusedtoclimb:

My last 2 cars ( Octavia Estates, what else for a UKC'er) have been bought new. Prior to that I'd always bought 'bangers' or had company cars provided.

When I bought my current years ago I was in the happy position of having enough cash to buy it outright, and I could sell my old one privately for more than the PX value. There was also a 'special' deal on the model I bought as a facelift model was due later in the year, and also delivery was just before the plate number changed. As I intended keeping the car for a good number of years, having a 12 plate instead of a 62 plate made no difference to me. I ended up with a deal where I paid 50% deposit and had the rest on a 2 year interest free finance. Bit of a no brainer really.

In reply to iusedtoclimb:

You could get a low mileage car from a main dealer, ex-demo for instance, they will still do finance, or get a bank loan. Don't get a diesel they are rapidly going out of fashion for a good reason.

In reply to iusedtoclimb:

Hire Purchase:
Deposit and monthly installments. Pay extra due to Interest. Own the car once completed

Personal Contract Purchase:
Little to No Deposit, small monthly payments, balloon payment at the end of contract. You can take PCP on remaining balloon payment or hand car back and take another PCP car, usually after 3 years. And tied to Mileage and wear on the car. You could own the car if you wish.

Leasing:
Paymonthly fees, subject to mileage and wear. Never own the vehicle.

Bank Loan:
Same as Hire Purchase, except you own thr car and pay the bank. Could be lower interest and payments.

I used to be dead against buying a new car and PCP but if done correctly it can be a good deal especially if you enjoy your cars. The added bonus that you can hand the keys back and walk away.

I dont have a car on PCP but I was intrigued and went with with good mate when he went around and looked into it. It seems to be really popular and makes it easier for people to own a car. You have to look after it though so maybe not the best with a young family, or younwill be hit with Fees.

Obviously I am not a financal advisor just my 2p worth of billy basics. Always best to have a poke around and a google.

In reply to Pedro50:

Heard somewhere that you may not have a warranty if you buy an ex demo or 'discount' car from the dealership. They buy it from the manufacturer to get their bonus or meet a target, then flog it off, but the purchaser is second owner and not covered by the full warranty.

In reply to iusedtoclimb:

Hi,

My mrs bought her new mini on PCP in September. We did the research having always bought 2nd hand cars. For her it seemed to be the right thing. It seems a bit like buying a mobile phone (only more 0s!) do you buy outright to start off with or get a contract and pay monthly..?

Managed to get the dealer to give us a milege deal for 17K miles / year for the same price as the initial 6K deal.
I'm not a car salesman but it's worth a look if you want to drive a new car with nothing to worry about for the next 3 years.

Cheers

In reply to markAut:


Just check when negotiating. I bought a one year old Skoda with 8,000 miles on the clock and they gave me 3 years warranty. Shortly after the warranty expired it developed an obscure and expensive electrical fault. They gave me a courtesy car for two weeks and repaired it virtually for nothing under their "goodwill" scheme. All good.

In reply to iusedtoclimb:


Is that just down to bad luck? My current car cost the 2 grand, it's a pretty decent motor, I've had it for 4 years, and it hasn't cost much to maintain. Not sure how a new car would ever be a money saver.

In reply to 1poundSOCKS:

I used to buy older cars in the 60-100k mileage range and rapidly found out that there's a reason manufacturers offer 60k mile warranties.

These days I buy nearly new or lease them, and keep them 3 years. If you are lucky enough to get a good vehicle then yes it costs more. However, for me, its the zero worry involved. It's much less likely for something to go wrong and if it does it's someone else's problem.

My car *must* work, and I don't have time to take it to a garage. Back when I was unemployed it was fine to run an old banger as I had plenty of time to either repair it myself or take it to a garage. These days neither apply.

In reply to iusedtoclimb:

I think buying a 12-18 month old car can realise some very large upfront cost savings, but you still have the reliability of almost new and are covered by a warranty. I've had two minor faults on my car fixed under warranty no hassle. The car cost me not a lot more than 50% of list price. Still various finance options.

In reply to The New NickB:

I think this is the right advice if your most important criteria are a balance of hassle free ownership of a (nearly) new model with MUCH lower depreciation cost. This is likely to be significantly better than going brand new.

In reply to BnB:


Yes, definitely my priorities, I could afford to buy new and also buy something flasher, but the depreciation would just make me weep inside.

In reply to The New NickB:

I got my car at a year old (my first 'new' car) and as part of the HP negotiations managed to get them to extend the warranty for another year. My last car was developing some serious cash-munching habits so the warranty is a glorious thing, but of course it relies on having the money to buy a sufficiently new car... the main joy for me is that I no longer feel slightly panicky about what's going to happen 'next' every time I go out in the car...

In reply to John_Hat:


Obviously the parts wear out over time and they have to draw the line somewhere. Can't say I've had much trouble with high mileage, currently on 156,000 and going strong.

But this is all irrelevant really, without real data we'll be none the wiser.

My only point was, if you want to save money (that is the stated aim in the OP), then I would be amazed if buying a new car is the best way.

In reply to 1poundSOCKS:

Agreed. 3yrs ago i bought a new car...costly mistake. Cost 200 quid a month for 5 yrs. regret doing it now even though it hasnt broken down once. I think of it as would an old banger really cost 2400 per year in repairs that it would cost on finance for a new car...

In reply to iusedtoclimb:

Personally I am a big fan of the PCP and tend to buy my bikes with them.
I have a 13k bike at the moment that only cost a 1k dipper and £130 a month over 3 years.

Be warned though, I'm going to be screwed with this bike. My contract is for 6k miles per year but I have done 20k in 2.5 years, it will be at least 25k by the time the contract is up.
My options in April are either pay it off and keep it or by liable for something like 75p per extra mile.
There is normally a deal to be done but I am over by far more than usual.

In reply to iusedtoclimb:
Everybody has their own risk/reward and tolerance to costs and embuggerment on this topic.

For me the best balance of economy vs relatively low hassle if moderately lucky is to buy nearly new and keep a long time. You generally get full remaining warranty (especially if using manufacturers approved schemes etc) and you can either buy outright, lease or PCP the car.

Last one I bought was a 9 month old 6,000 miler, nice price vs new, the manufacturers incentive scheme at the time (VW) was offering me a £2,000 deposit contribution and 2 free services if I took finance (which I was lucky enough not to need) - so I took the finance and exercised my right to withdraw on the day I collected the car and paid it off, less their deposit which one is allowed to keep. But If I had needed finance it would have taken the sting out of it a bit. Keep an eye on these deals as I saw the deposit contribution go from £2000 down to £500 and back up to £2000 on the model I bought over a few weeks so sometimes you get lucky, sometimes less so depending on whatever is going on behind the scenes to generate sales/what stock levels are like etc.

It might be cheaper to negotiate hard on the car and pay for it via a bank loan as bank loans are at present a good bit cheaper than most motor finance interest rates. Actually - I'm sure one could use their finance to get deposit contribution and then use a cheaper bank loan to pay the balance off... sneaky. The trade in they offered was poor (bit of an obscure car I was selling though) so we struck deal based on their trade in and I then said I'd collect new car (was coming from central stock anyway so bit of delay) within 3 weeks max and would try to sell privately which I did for double their trade in so again, I won out for a little work. It was a zero risk as if I didn't sell at a better price they would still accept the trade in.

If I've had the car from virtually new and look after it I recon on trouble free first 5 years bar consumables then 3 to 5 more reasonable years. I save the same every month towards running costs so generally build up a pot in first few years that then gets smaller as a few larger repair bills crop up in second half of ownership.

In my opinion its far easier to run a car for a long time and into high miles if you know its history and who has been driving it. i.e. me.... I've been caught out a lot more buying 3 to 6 year olds than I have nearly new or oddly very old. I think a good banger is easy to find/spot vs a bad banger... however a 5-7 year old car looks respectable but could have been badly abused and have a ton of stuff ready to go that is harder to spot as otherwise it still all looks and feels ok... that same car will be a ragged dog in another few years and easy to spot vs the biddy owned, well looked after 10 year old.

All this is driven by me being tight and hating the thought of paying top dollar for a depreciating asset that somebody will no doubt whang a trolley into shortly after you buy it, but wanting reasonable efficiency, security, safety and trouble free ownership. The household has 2 cars and I can get too and from independent garage, home and office reasonably easily by using train and running when I'm getting work done so I'm not in the 'it must work 100% of the time and I can't manage without it for 2 days if it needs an overnight repair' camp.....

In reply to iusedtoclimb:

I would buy a 1-2 year old car of a model that has been around at least 3 years, that way any teething problems have been ironed out.

Even if it is going perfectly before the warranty expires, pay an independent garage to mot to it and give it the once over.

In reply to iusedtoclimb:

If depreciation is a concern then you should buy a classic car