Finance or used cars?

[F_mck01]

Hi guys,

Sorry about this as I'm new to forums but need some advice.

So I'm 21 amd have been driving for 4 years. I've had 6 cars in that time all with different experiences. I've had a skoda fabia 2007, Renault clio 2016, mini cooper hatch 2016, Ford fiesta 2016, Honda civic 2007 and now Ford ka 2002 - talk about downgrades. I tried to save money and got a bank loan to buy the Honda but got sold a right off and the garage wouldn't take it back and refund me hence the Ford ka as that's all I could afford.

I'm coming to the end of paying my loan off and can't wait to get rid of the breaking down ka.

My question is though, do I get a car on finance through a dealership or go get another bank loan (as by the time I have saved enough to buy a car I'll be 25!) of around £5,000-£7,000 and buy a used car from a used dealership/private owner? Also whatever one you say do you have any car recommendations, need to be petrol, thank you!

[ymwoods]

Both forms of borrowing are loans, the finance would be secured against the car and the bank loan would (I assume) be unsecured.

If your not looking to default anytime soon and you are able to pass the credit check for either, then really you want to look at the APR for each and go with the lowest. The next thing to look at is if you favour short-term cash flow or paying as little interest as possible back to determine the duration of the loan that you wish to go for.

Different people will favour different options depending on what that cash flow might be doing.

In terms of private/dealer. With a private sale you will probably get more car for your money BUT you also get no warranty so it's swings and roundabouts. That being said, not all dealers and their warranties are created equal.

Edited by ymwoods on Sunday 30th January 12:21

[Nickp82]

I am going to assume you would not have much deposit if you went the dealership route? If so, a potential issue with that is being in negative equity during the majority of the finance term which means it could be tough to get out of should you need to.

It’s difficult to know exactly what is best but my main advice would be to think about what will happen if you have a change of circumstances and need to sell the car.

From this point of view, the loan for a used car route is possibly better but obviously learn from the Honda experience and do what you can to ensure you are buying a car that will serve you well.

[mmm-five]

Whichever way you go, if you buy a used vehicle (doesn't matter if you buy privately or dealer - other than the dealer price will usually be more for almost no extra protection at this price-point) I'd recommend doing a complete history check on the next car you buy to avoid buying another 'write off'.

If you're not worried about 'owning' a car, then a cheap lease deal may be a good option, so that you get a new, reliable, warrantied car for 3-4 years. Prices will obviously depend on how many miles per annum you cover, so the best deals will be for 5-8000 miles.

For example, you can get an MG3 1.5 VTI-Tech Excite 5DR for £150/month with a 10,000 mile annual mileage (or save £7/month if you reduce that to 5000 miles). That's with a 9 month / £1400 deposit/initial rental, or £175/month for the same car with a 1 month / £175 deposit/initial rental.

For about £25/month more, there's a Hyundai i10 1.2 (£173+9m/£200+1m) or Citroen C3 1.2 (£174+9m/£203+1m) .

I've never leased, so can't recommend any specific company. The above rates were all from here.

[maxdb]

The APR will be cheaper on a bank loan compared to getting finance from a dealership so if I do get loans then I will get them from a bank and use a comparison site for the best rates.

I lean towards buying second hand cars privately rather then buying new or from a dealer as dealership prices are more expensive and I don't see any benefit of paying £200 per month odd on a car for 3 years when you get little in return apart from less risk of things breaking. It all depends on your circumstances though.

[Trevor555]

I'd recommend you take the dealer finance if it's not much more expensive than a personal loan.

If you have any problems post purchase then the finance company are jointly liable, and you can go to the FCA if they dont play ball.

If you decide to buy privately then take an expert with you when you buy. A proper expert, not someone who just thinks they are.

[Trevor555]

F_mck01 said:

Hi guys,

Sorry about this as I'm new to forums but need some advice.

I tried to save money and got a bank loan to buy the Honda but got sold a right off and the garage wouldn't take it back and refund me

!

Sorry to hear that.

Did you approach anyone for advice?

If a garage sold you a write off without declaring it they were naughty.

Citizens advice would pass that straight to trading standards who would have likely prosecuted the garage.

[F_mck01]

Hi guys,

Thanks for the advice. Yeah I mean I would have maximum £500 deposit and would look to pay off the loan/finance in 3/4 years max.

I like the idea of the loan because I would own the car and could make additional payments as and when I could afford it. Also the car can be customised earlier on if I wanted too whereas finance I dont think I can make additional payments unless its to settle the finance and of course the car is the finance companies until I have paid it off so no modifications!

I was looking at 2013 skoda fabia monte carlo, vauxhall corsa limited corsa/sri 2013, Ford fiesta zetec S 2011, seat ibiza fr 2014 for a car using a loan (did consider suzuki swifts but don't know a lot about them).

If I was going on finance then a 2018 vauxhall corsa, fiesta, fabia but probably lower specs.

Does anyone know roughly reliability of these or other cars to consider?

[Dan W.]

F_mck01 said:

Hi guys,

Thanks for the advice. Yeah I mean I would have maximum £500 deposit and would look to pay off the loan/finance in 3/4 years max.

I like the idea of the loan because I would own the car and could make additional payments as and when I could afford it. Also the car can be customised earlier on if I wanted too whereas finance I dont think I can make additional payments unless its to settle the finance and of course the car is the finance companies until I have paid it off so no modifications!

I was looking at 2013 skoda fabia monte carlo, vauxhall corsa limited corsa/sri 2013, Ford fiesta zetec S 2011, seat ibiza fr 2014 for a car using a loan (did consider suzuki swifts but don't know a lot about them).

If I was going on finance then a 2018 vauxhall corsa, fiesta, fabia but probably lower specs.

Does anyone know roughly reliability of these or other cars to consider?

For reliability in my opinion I would opt for the Swift or anything Japanese , then the Fabio

Festa ecoboosts are nothing but trouble

[F_mck01]

Hi guys,

Thanks for the advice. Yeah I mean I would have maximum £500 deposit and would look to pay off the loan/finance in 3/4 years max.

I like the idea of the loan because I would own the car and could make additional payments as and when I could afford it. Also the car can be customised earlier on if I wanted too whereas finance I dont think I can make additional payments unless its to settle the finance and of course the car is the finance companies until I have paid it off so no modifications!

I was looking at 2013 skoda fabia monte carlo, vauxhall corsa limited corsa/sri 2013, Ford fiesta zetec S 2011, seat ibiza fr 2014 for a car using a loan (did consider suzuki swifts but don't know a lot about them).

If I was going on finance then a 2018 vauxhall corsa, fiesta, fabia but probably lower specs.

Does anyone know roughly reliability of these or other cars to consider?

[F_mck01]

So overall, if getting a loan - look at multiple cars, bring a specialist with me to view them, and look at Japanese cars or vw group.

If going finance still bring a specialist with me and do checks on the car but go with what I can afford and suits me?

[Dan W.]

F_mck01 said:

So overall, if getting a loan - look at multiple cars, bring a specialist with me to view them, and look at Japanese cars or vw group.

If going finance still bring a specialist with me and do checks on the car but go with what I can afford and suits me?

Hpi check yes or ask the dealer to provide you with the hpi check they should have done.

Check apr, Upfront or back end admin fees, make sure no extras are slipped into the invoice.

[ZX10R NIN]

I agree with the above if you get the finance via the dealer or through someone like Zuto (as long as the APR isn't to far apart) then you get an extra layer of protection.


As for what to buy I'd recommend the Astra GTC SRI in 140/180 form they're reliable swift look smart & you'll get one that has sensible miles & a decent age for 5-6k.

140 SRI

https://www.autotrader.co.uk/car-details/202201151...

https://www.autotrader.co.uk/car-details/202106083...

180

https://www.autotrader.co.uk/car-details/202111099...

https://www.autotrader.co.uk/car-details/202111280...

The other car well worth a test drive is the Giulietta in Veloce 170 spec:

https://www.autotrader.co.uk/car-details/202201221...

https://www.autotrader.co.uk/car-details/202112220...

https://www.autotrader.co.uk/car-details/202201111...

Leftfield but no less reliable is the Megane Coupe Dynamique TomTom 180:

https://www.autotrader.co.uk/car-details/202201201...

Or if you fany something smaller the 208 XY 155 is a good pick:

https://www.autotrader.co.uk/car-details/202201251...

Or if the insurance is sensible there's the 208 GTI:

https://www.autotrader.co.uk/car-details/202201191...

When it comes to buying the car do a Vcheck as it'll show if anything has been written off & show pictures of the damage in most cases, check the MOT history online & if you don't have anyone to check the car out then pay the RAC/AA to do it for you.

[jeremyh1]

Why dont you consider running a shed finance free.

There are plenty of people here doing it

[Pistonheader101]

Need to be handy with a spanner if shedding

[F_mck01]

Thanks for the advice guys.

If I was to shed, is there any easier cars to work on than others?