Car finance - High Milage

[Possum19]

Hello,

I was hoping to get a little advice on HP/PCP/Loans as way of financing a car. I've had a torrid time with reliabilty on my last 2 cars, and so I'd like to get into something a newer and lower milage than before.

I've always paid cash (via a car loan before) as Iike the idea of owning the car at the end, but this limits the total value of the car I can afford, leaving me exposed to large recovery & repair bills. On the plus side, there are no milage limits or buy back concern, mileage limits and the freedom to buy any car.

The issue I struggle with is that I do 20k miles/yr. So after an average 4 year contract, any car I have has lost a lot of value mostly likely being north of 100k total mileage. This may mean that "owning" a car outright at the end of a contract is not really feasible as it will always be potentially troublesome by that point, but I do like the idea of not having monthly car payments and I'm not one to chase the lastest thing for teh saek of i t.

Any thoughts and advice on the best route forward would be greatly appreciated.

Basic facts, in case of help:
Monthly £300
Deposit £4,000
20k miles/yr
100 mile return commute - so some comfort and power needed!
C or D segment size
Motorway and country driving

[Mojooo]

Most finance deals I have seen have a 10 or 12k limit so you will probably have to pay a fortune to get that extra allowance.

[jurbie]

I've had similar thoughts, I do around 30000 miles per year and it was more about the rapid depreciation this incurs.

There are PCP deals to be had, check on Autotrader. In the finance section fill in your details and if they will accept your high mileage then you'll get a price, if not it defaults to the HP price.

I never went further than that and it might be that following a conversation with the seller it's not in fact something they can offer but worth asking.

As to the practicalities of financing a used car that way, I couldn't tell you. It seemed a very easy and straightforward way of getting a car that might have been outside of my cash budget, hammering the mileage and then giving it back and starting again. In the end, I bought outright but I still think that the PCP route might work.

[scot_aln]

Isn't lease often the approach if you want to add high miles and then hand back?

[Chris Hinds]

Leasing or PCP on a new car wouldn't be that ruinous (in my view anyway) for 20k limit. I just had the [briefest] search on Nationwide Vehicle Contracts. A 48 month, 20k mile lease on a Kia C'eed comes in at £288.67 a month with £1732 down. I get that's just like a brief search and hasn't been honed to being a specific model but it shows that it is doable for your criteria.

A few minutes with BMW suggests putting £4k down on a 1 series on a 20k mile PCP is probably over budget without some haggling, whilst £4k down on a base model Focus puts you at more or less bang on £300 a month.

All those are "brand new" options... you're probably better looking for a finance rate supported new car than trying to finance a used/near new car as the rate difference is likely to be enough that you will get a new car for the same money.

[Mandat]

Mojooo said:

Most finance deals I have seen have a 10 or 12k limit so you will probably have to pay a fortune to get that extra allowance.

Most don't.

A lease will have a mileage limit because you are renting the car for a specified duration / mileage.

HP doesn't have a milage limit, and PCP only has a tentative mileage limit, which doesn't apply if you are not planning on handing the car back at the end of the term.

[ChrisH79]

A dealer once told me that many of their taxi driver customers took new cars on HP, then exercised their right to terminate their finance agreement when they’d paid 50% of the total owing.

Your miles may not be extreme enough for this to make sense but it may work better than PCP.

[trickywoo]

Would two cars be cheaper to run in this scenario? Say the new lease one for winter and something cheap for good weather? Mx5 if that appeals.

[OddCat]

I generally assume that these people with 20,000 or 30,000 mile commutes are being paid a fortune as you wouldn't do that for Mickey Mouse money that you could earn locally.

And, if it is 'business miles' (not commuting), there would be a rate per mile from the employer or, if self employed, some loading in the contract to cover travelling costs. In any event, that a sum would be included somewhere to offset travel / depreciation / replacement cost associated with such mileage.

Or do some people travel 20,000+ miles a year to work in a Maccy D's on minimum wage ?

[Monkeylegend]

ChrisH79 said:

A dealer once told me that many of their taxi driver customers took new cars on HP, then exercised their right to terminate their finance agreement when they’d paid 50% of the total owing.

Your miles may not be extreme enough for this to make sense but it may work better than PCP.

I did that with one of my E Class Mercs, used as a chauffeur car and had done 318k miles on a Mercedes Finance HP contract. It was just over 4 years old and I had paid about 60% of the total owing.

I was advised to terminate by the Mercedes dealer I used at the time. There was a clause in the contract that said return condition had to be consistent with mileage covered, and I used this to avoid any further payment based on a report from the dealer who confirmed its condition was consistent with mileage

I then bought another car on HP from that dealer.