“Buying” a car
Discussion
Does anybody buy a car anymore?
I’ve been leasing for 4 years now and I need to replace the current motor. The last two have been 2 year deals which comes around very quickly.
I’m now looking to buy a used executive saloon for £25k. The old me would have no issues, but the new me is stalling and I don’t know why.
It’ll be something like half down and half a personal loan which is still cheaper than a lease but a better spec than a lease car (appreciate the time value of money argument in the deposit).
It’s a 69 plate and the plan is to keep for 4 years.
Any thoughts on this?
I’ve been leasing for 4 years now and I need to replace the current motor. The last two have been 2 year deals which comes around very quickly.
I’m now looking to buy a used executive saloon for £25k. The old me would have no issues, but the new me is stalling and I don’t know why.
It’ll be something like half down and half a personal loan which is still cheaper than a lease but a better spec than a lease car (appreciate the time value of money argument in the deposit).
It’s a 69 plate and the plan is to keep for 4 years.
Any thoughts on this?
Yes I always buy outright to own - but always buy used.
I don't see any value for money buying a brand new over-priced car, or in renting an over-priced new car and paying for the huge depreciation and interest in monthly payments.
I also have zero interest in "keeping up with the Joneses".
OP - I guess the best way if you don't have the funds and are to rely on future income in order to drive the car is to follow Jason's post above.
I don't see any value for money buying a brand new over-priced car, or in renting an over-priced new car and paying for the huge depreciation and interest in monthly payments.
I also have zero interest in "keeping up with the Joneses".
OP - I guess the best way if you don't have the funds and are to rely on future income in order to drive the car is to follow Jason's post above.
Edited by GroundZero on Wednesday 23 September 10:35
Almost always bought used and with a loan to make up the difference if I've needed to. Only ever bought one new car and paid cash outright. This was back with Skoda did 0% VAT and knocked further money off.
Next car I'm not sure. The car I want next is new only, unless I wait another year. Plus it's the sort of car that would get driven hard so tempted to PCP to get one new, then if I still like it at the end, get a load for the rest. I keep cars 5yrs+, current car is 12 years old
Next car I'm not sure. The car I want next is new only, unless I wait another year. Plus it's the sort of car that would get driven hard so tempted to PCP to get one new, then if I still like it at the end, get a load for the rest. I keep cars 5yrs+, current car is 12 years old
Let's see. Buy three years old, own it outright and have something that I can probably sell for 50% of what I paid for it after another three years and sell at any time to boost my finances if I lose my job... or, spend the same amount leasing something for three years, own nothing at the end and find myself saddled with a hefty exit penalty if I lost my job and need to get out early, just when I need that money to pay to keep a roof over my head and food in my stomach.
I will be buying a car at some point in the next few months and I will pay cash. I think leasing gets you a good deal if you want a daily driver/something to get you from A to B, seeing as you can drive respectable cars for approx. £200 a month inc. VAT, plus another £2.5k in initial rental. That works out at £9,700 over the three years, which is reasonable. You never have to worry about big servicing bills, MOTs, etc.
If you want something nicer, it stops making sense to lease. Take something like a Porsche Cayman, where you pay £700 a month and £6,500 in initial rental, which comes to £31,700 over three years, after which you are left with nothing. You could buy a relatively more recent reg used car (5 year old Cayman for example) for £30,000, allow for £3k per year in additional running costs and you could be reasonable sure of getting back £20-25k if you were to sell in 3 years' time. The net cost would be around £17k, vs £32k leasing. The sums look even better if you buy a car that has already fully depreciated (e.g. a 10 year old Cayman).
The opportunity cost of using cash doesn't really come into it, seeing as you can get loans at low single digit percentage interest rates these days.
If you have a business, leasing nicer cars may make a little more sense, seeing as you can save on the VAT and claim some expenses, though I believe the tax advantages are a lot smaller than they used to be.
If you want something nicer, it stops making sense to lease. Take something like a Porsche Cayman, where you pay £700 a month and £6,500 in initial rental, which comes to £31,700 over three years, after which you are left with nothing. You could buy a relatively more recent reg used car (5 year old Cayman for example) for £30,000, allow for £3k per year in additional running costs and you could be reasonable sure of getting back £20-25k if you were to sell in 3 years' time. The net cost would be around £17k, vs £32k leasing. The sums look even better if you buy a car that has already fully depreciated (e.g. a 10 year old Cayman).
The opportunity cost of using cash doesn't really come into it, seeing as you can get loans at low single digit percentage interest rates these days.
If you have a business, leasing nicer cars may make a little more sense, seeing as you can save on the VAT and claim some expenses, though I believe the tax advantages are a lot smaller than they used to be.
I've always bought, and paid 'cash'. Instead of paying monthly for a lease deal, I pay monthly into various investments / savings. When I want a new car, I buy one from those funds. As I haven't changed my car for 8 years, the next one might be a bit good 
My main rule is to not spend money that I don't have.
My main rule is to not spend money that I don't have.Muzzer79 said:
davek_964 said:
Always pay cash. Buying new doesn't really interest me much, and the idea of "renting" a car just seems bizarre.
Depends on how much the 'rent' is.While I don't dispute that the "rent" might work out less than cost of a depreciating asset, I prefer to pay for a car up front - and essentially write that money off - rather than have to budget monthly payments.
Like most who have posted I've only ever bought my cars, albeit with a loan from parents or the bank on a few occasions!
And now over 40 years on from buying my first old snotter I'm still doing it that way, because I have the money but not the income now I've stopped working.
I just find it liberating to have an asset and no debt - even if it may be depreciating.
And now over 40 years on from buying my first old snotter I'm still doing it that way, because I have the money but not the income now I've stopped working.
I just find it liberating to have an asset and no debt - even if it may be depreciating.
The 'massive depreciation' on new cars doesn't always ring true. The vast majority of 12-24mth old cars are sold by main dealers, and they're priced based on the list price when new, only we all know the list price is BS. I bought a new Focus ST in 2015. The list price was £28.5k, a 2yr old one was £20k, so that's a hefty saving, only I got a brand new one for £24k. In that scenario I'd rather pay the extra £4k to get a car 2yrs newer, full 3yr warranty, zero miles etc.
Granted this might not apply to the higher end of the market, but head over to Drivethedeal and there's lists of Audi's @ 20% off list
Granted this might not apply to the higher end of the market, but head over to Drivethedeal and there's lists of Audi's @ 20% off list
I've just got off the PCP roundabout after spending £3k deposit and £315 per month for 2 years to end up where the car was just worth the outstanding amount of finance.
Was going to buy an older car for cash, but ended up going for a 1 year old on 0% HP finance. Plan is to keep it for the finance term and then re-assess. Won't be going back to renting though, must be getting old and sensible!
Was going to buy an older car for cash, but ended up going for a 1 year old on 0% HP finance. Plan is to keep it for the finance term and then re-assess. Won't be going back to renting though, must be getting old and sensible!
Just think - in 2 years time you won't have to worry about whether or not you'll get charged for those scuffed alloys, or that tiny windscreen chip or that small scratch. You can get them fixed if you want to, but no one is going to penalise you for them.
You won't have to find the 3, 6 or 9 months lease payments as a deposit.
You can put decent new tyres on whenever they're needed, knowing you're going to get full value from them.
You can service the car when it's due, knowing you'll get full "value" from the service.
I've used all 3 main methods for acquiring a car - bought with cash, PCP and Lease. Lease is the one thing I will never do again. Total waste of money. Depending on the terms, PCP can be a cost effective way to buy a car. The one time I used PCP, I paid the balloon and kept the car. Not sure if deals like this are available any more, but I once bought a car on dealer finance - 50% deposit, the remaining 50% at 0% over 2 years. It was a brand new car, which I wouldn't normally do, but it was a Megane Scenic in 1997, and a 9 month old car was only about £800 cheaper than a brand new one.
You won't have to find the 3, 6 or 9 months lease payments as a deposit.
You can put decent new tyres on whenever they're needed, knowing you're going to get full value from them.
You can service the car when it's due, knowing you'll get full "value" from the service.
I've used all 3 main methods for acquiring a car - bought with cash, PCP and Lease. Lease is the one thing I will never do again. Total waste of money. Depending on the terms, PCP can be a cost effective way to buy a car. The one time I used PCP, I paid the balloon and kept the car. Not sure if deals like this are available any more, but I once bought a car on dealer finance - 50% deposit, the remaining 50% at 0% over 2 years. It was a brand new car, which I wouldn't normally do, but it was a Megane Scenic in 1997, and a 9 month old car was only about £800 cheaper than a brand new one.
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