Buy 2 year old car or PCP Brand new car?

[magnitude12]

The initial message was deleted from this topic on 29 November 2014 at 15:44

[BritishRacinGrin]

How long would you want to keep the car for? If you went for the buying option would you be moving it on after two years and buying another nearly new car, or would you keep it several years longer?

[BritishRacinGrin]

This is a close one. The residuals on these must be quite good if a two year old car with 25k is 20,000GBP.

Both of these options are very expensive ways to go motoring and those two options are going to be quite similar in terms of cost over two years.

If I were you I'd look at what the prices are like on 3 year old 40k mile cars as this is often where the depreciation curve starts to flatten out and this should be quite a bit cheaper whilst still landing you in a tight, practically new car. If you don't want to consider that option then I think that the new car is not such a bad option. The loser here is the two year old car as the saving isn't good enough IMO and the PCP makes it easier to manage financially.

[ajf]

If you really must have new get a low rate loan or hp the £6000 will be cheaper than pcp

[grumbledoak]

I presume you have worked out that you'll be paying £33,380.64 for it and taking the bigger depreciation hit? Is it worth it to you?

[jamieduff1981]

Those rates are staggering. Audi are really taking the mickey there. For context, the rates I was offered by a Jag main dealer were 4.9% on a new car and 5.5% on used stock this summer.

11% is more what I'd expect from some one-man-band outfit selling old Renaults on Blackhorse finance.

[nct001]

magnitude12 said:

Hi guys,

Looking for a new car, not sure whether to buy outright a 2 year old car or PCP a brand new car.

The car I'm looking at is an Audi for £20,000 which is 2 years old. And the brand new car with the PCP dealer is an Audi worth £26,000.

Finance would be over 48 months, I believe these are rough figures, the APR is 11% which is sky high. This quotation was done online, so I believe there is some leverage with this quote.

Total Price £25990.00
Total Deposit£5198.00
Balance to finance £20792.00
Regular monthly payments£369.43
Followed by a final payment £10450.25

Unfortunately I do not have another £6,000 spare to buy a brand new car so financing would only be the option for the newer car.

The 2 year car has 25,000 miles on to, as opposed to the brand new car with <1k miles.

Please advise and suggest Thanks

In four years time you will have spent 17700 in payments plus the 5200 deposit and you will be left with nothing. Circa £6000 a year depreciation, on a second hand car? With just the option to buy an old high mileage audi for £10450!

Why not look at using your healthy deposit supplemented by a small loan of say £3k and get a decent used car for £8k after all that is all you will left with after paying £22k over the next four years.

[jamieduff1981]

nct001 said:

magnitude12 said:

Hi guys,

Looking for a new car, not sure whether to buy outright a 2 year old car or PCP a brand new car.

The car I'm looking at is an Audi for £20,000 which is 2 years old. And the brand new car with the PCP dealer is an Audi worth £26,000.

Finance would be over 48 months, I believe these are rough figures, the APR is 11% which is sky high. This quotation was done online, so I believe there is some leverage with this quote.

Total Price £25990.00
Total Deposit£5198.00
Balance to finance £20792.00
Regular monthly payments£369.43
Followed by a final payment £10450.25

Unfortunately I do not have another £6,000 spare to buy a brand new car so financing would only be the option for the newer car.

The 2 year car has 25,000 miles on to, as opposed to the brand new car with <1k miles.

Please advise and suggest Thanks

In four years time you will have spent 17700 in payments plus the 5200 deposit and you will be left with nothing. Circa £6000 a year depreciation, on a second hand car? With just the option to buy an old high mileage audi for £10450!

Why not look at using your healthy deposit supplemented by a small loan of say £3k and get a decent used car for £8k after all that is all you will left with after paying £22k over the next four years.

There's no arguing with your arithmatic but what can you get for £8k that isn't, well, a bit ste?

[Elysium]

You should check out some broker websites before proceeding. As you say 11% APR is sky high and I can't see any Audi deposit contribution in your numbers.

Try Drive the Deal to see the manufacturers and dealers discounts available.

[TA14]

jamieduff1981 said:

There's no arguing with your arithmatic but what can you get for £8k that isn't, well, a bit ste?

http://www.pistonheads.com/classifieds/used-cars/a...

[BoRED S2upid]

jamieduff1981 said:

There's no arguing with your arithmatic but what can you get for £8k that isn't, well, a bit ste?

Seriously?

[TA14]

Elysium said:

Try Drive the Deal to see the manufacturers and dealers discounts available.

For a one year deal?

[jamieduff1981]

BoRED S2upid said:

jamieduff1981 said:

There's no arguing with your arithmatic but what can you get for £8k that isn't, well, a bit ste?

Seriously?

Let's be honest. An £8k car is either going to be rubbish to begin with, or a fairly heavily depreciated medium-to-late life nicer car. There is nothing wrong with driving a Mondeo or something like that, but if willing to spend the sort of money indicated by the OP I expect he's got something much fresher, with manufacturer's warranty and newer features and technology in mind. You couldn't pay me enough to drive an Audi - but a new Audi is not in the same league as the sort of car you can buy for £8,000.

[Ved]

So you're going to pay £6,000 then £380 for four years and still have a £10,000 balloon payment at the end of it? All of that on a huge APR? Ask yourself if you or the dealer is benefitting the most from that.

Personally, I would look at a lease deal or a cheaper car.

I think some details on the cars in question could help the conversation. And for the record you could get an outstanding car for £8k but it won't be two years old

[TA14]

Ved said:

So you're going to pay £6,000 then £380 for four years

He said he only wants the car for one to two years.

[MC Bodge]

jamieduff1981 said:

There's no arguing with your arithmatic but what can you get for £8k that isn't, well, a bit ste?

You could buy a presentable, comfortable, adequately performing car. Care to avoid money pits would be prudent, but the most you would ever lose is £8k.

You couldn't buy a brand new status symbol though, granted.

[anonymous-user]

jamieduff1981 said:

There's no arguing with your arithmetic but what can you get for £8k that isn't, well, a bit ste?

Bit snobby, that.

£8k would get you in to a Porsche, a quick Jag, big Merc, all sorts of stuff.

[regprentice]

Its only a status symbol to a minority of people. Audis design philosophy is so focussed on incremental changes instead of significant ones that there isnt a distinctive diffrence between the last decades cars...most people in the street wouldnt know if your audi was 2, 5 or 10 years old if they couldnt see the plate.

Mind you that minority are probably the people you park next to at work....

[Ved]

TA14 said:

He said he only wants the car for one to two years.

True sorry should have explained that better. My point is he's in an agreement for four and it may not be so easy to sell or hand back. This is why a lease might be better for him.

[TA14]

Ved said:

Personally, I would look at a lease deal or a cheaper car.

I think some details on the cars in question could help the conversation. And for the record you could get an outstanding car for £8k but it won't be two years old

Yes, you make some very good suggestions.