aibu to buy a new car?

(97 Posts)
smokinaces Mon 06-May-13 15:04:14

I am a single mum of two. Have been for four years. I have worked the entire time, four days a week at around £10k a year. I get dla for ds1 (aspergers) and some housing benefit as well as tax credits. I budget well, and try and spend wisely.

My car is ancient. Twelve years old, 135k miles. It has been patched together so many times it is a money pit. It will fail the new style mot in the summer. It is making a funny noise when I steer, and when I break. It is on its last legs unless I put about five hundred pounds into it.

I have found a deal on a brand new small cheap picanto for me and the two boys. It's safe, reliable. It would need no deposit and cost me 170 amonth - more or less the dla money. Until October I pay £150 a month on a bank loan from my marraige breakdown four years ago. Come then it will be only twenty quid a month more. And i wouldn't need to use the dla money anymore. (I also get csa money which isn't allocated to anything as although some weeks its regular, others its not)

I need a car for the boys to get to school (rural setting) and me to work. I need it for ds's various clubs for his aspergers (he does to one every other day)

I could extend my bank loan, but would mean I would have to get another seven or eight year old car. This new one would be zero road tax, and insurance and breakdown is included for first year. It's also got seven year warranty and no mot needed. If I get another older car it could end up a money pit like ky current one.

But I have been made to feel I'm out of order for buying new. That being a single parent in social housing receving benefits and tax credits, although I've worked continously since i was 16 and am studying for my degree as well as working a four day week, i shouldn't be getting finance or anything. And I know it will cause raised eyebrows and commets at the school etc.

Aibu?

WMittens Mon 06-May-13 20:32:39

"And with the lump sum at the end you can take a loan and pay that over three years too if you need.

Brand new this car is costing around £8k"

So you'll be paying for this car for 6 years?! Rather you than me.

Of course dealers want to tie you in to finance (cash is most certainly not king when buying cars) - you reach the end of the three year lease and you have no car - then suddenly another fantastic deal pops up and you're signed up to another three years, and still don't own a car at the end of it, living forever hand to mouth.

Car marketing is very adept at making people think they can afford brand new cars ("LOW monthly payments!") - all you have to do is look at your income (after other outgoings) and ask yourself if you can drop £8K on a car - if not, you cannot afford the car. "New" means the car depreciates faster; "finance" means you pay interest to a finance company; this is how they get you to pay large amounts of money and still not have anything at the end of the term.

A very quick search has turned up a 2011 Picanto with just over 10K miles on it, a 2010 model with 12K miles, and a 2009 with 7500 miles all for about £5500. I've just found a 2013 model with 3K on it for £7000. Kia has been selling cars with a 7 year warranty for a while now, so you're still going to have the balance of that, which is another 4 years on the oldest one I've quoted.

Ponyofdoom Mon 06-May-13 21:19:21

I am definitely with WMittens, I would never buy new; its such a waste of money. Your best bet financially would be to repair the car you have got and get another year or two out of it. If you want a newer car then get something better quality, second hand for a lot cheaper than £8k. Stick it on a 0% credit card instead of expensive finance. I have recently bought a gorgeous 7 year old Jaguar for £4.4k and I don't see why she shouldn't last me 10 years, barring disasters, why would anyone want a new Kia instead of a middle aged Jaguar IMHO smile My old car is 17 years old and still fine.

a new Kia will be much cheaper to run than a 7yo Jag! Cheaper road tax, cheaper petrol, no MOT needed for first 3 years, probably cheaper to insure too.

Ponyofdoom Mon 06-May-13 21:26:35

Actually my Jag does over 50mpg and the road tax is about 180 though agree the Kia would beat her on that one! She sailed through her MOT too (smug!!) It would take a lot of repairs and road tax to make up the 3.6k difference in price!

Ponyofdoom Mon 06-May-13 21:27:17

and the insurance is cheap because I am old ;)

WMittens Mon 06-May-13 21:35:32

a new Kia will be much cheaper to run than a 7yo Jag! Cheaper road tax, cheaper petrol, no MOT needed for first 3 years, probably cheaper to insure too.

Yes, but not by as much as you think - Ponyofdoom's Jag was £3600 cheaper than the £8K Picanto, which can get you:
- 9 years car tax difference (assuming £430, it might be a higher band though)
- about 18000 miles of petrol difference (assuming 50mpg for the Picanto, and 20mpg for the Jag)
- 120 MOTs

And remember with this you get full leather, walnut dash, cruise control, electric massaging heated and cooled seats, heated steering wheel, 300bhp, smooth automatic gearbox, air suspension (actual spec varies, obv.) - I know what I'd pick.

WMittens Mon 06-May-13 21:36:24

Cross post, Ponyofdoom I take it yours is LPG'd?

smokinaces Mon 06-May-13 21:38:33

I am stuck between rock and hard place with finance / loan.

If i go for second hand, most I can afford is £3-4k which means I have to buy older. This means car will only last me four to five years again. And will inevitably cost repair wise.

If i could get a 2011/12 I would. But I can't.

0% credit cards are only for a year or two. Then the Apr is higher.

I have a Peugeot 206 at the moment, so size wise its almost identical. Apart from a slightly smaller boot. (Newer models have bigger boot than older style)

I would be looking at keeping it for 7 years plus. God if I can keep it going to twelve years like my current car all the better.

Low rate mobility element of dla means we can't use mobility scheme. They told me its high rate mobility only. I would only be using his dla money - or part of it - for four months. And yes, I need the car for everything, his groups on mondays and wednesdays and Saturdays are in the next town or village. As is his school. And their dads house, who doesn't drive. And my work.

I have only heard of good things of kias tbh. I wouldn't touch a Peugeot again. Vauxhall I looked at, as they have 0% finance but the cars are bigger and heavier and still roadtax and higher insurance. Seat and Honda are reliable but out my price range. As is volkswagon - though I would love a polo I admit.

I remember when I replaced my old car with this current one. All I could get on my three k loan was an eight year old car which has had no end of faults. I guess this has made me rather apprehensive I guess.

The insurance on a jag alone for me would be a years payments I swear!

Ah I don't know. I'll have another go at auto trader. But really fixing my current car is not an option. And neither is a 1-2 year old car on my budget. I might get lucky with a six year old car I guess, but that would need replacing again sooner so is it false economy?

If only i were rich and this all a moot point!!

Ponyofdoom Mon 06-May-13 21:38:43

diesel!

OP, seriously, get the new car.

smokinaces Mon 06-May-13 21:41:32

And I need little little car for parking round here. Some of the gaps I have to get my car into in my road are titchy. A nice big JAG is out the question unless it comes with a chauffeur ;-)

My stepdad had a gorgeous jag once.

TheCraicDealer Mon 06-May-13 21:44:44

I recently bought a new fiat 500. It is my pride and joy (her name is Margot). Anyway- I had initially thought about getting a second hand one, but I didn't want to get a bank loan as the APR's on those made the monthly repayments on a 6-7K four year old car car nearly £300 a month- and I wasn't even looking the whole amount in a loan. I also need a car for work so reliability/a warranty is really important for me. Coupled with the fact my worrier Dad was scared I'd get diddled by a second-hand car salesman, it made sense for me to buy new.

Buying new and taking advantage of low APR's can be a good idea for some. If the OP is buying this car and can safely afford those payments and knows that at the end of the lease it's likely she'll be able to pay it off then go for it. Yes it depreciates- all cars do. At least with this one she'll have a full warranty and can pick what she wants. Is that worth the 20% premium, considering it'll be offset somewhat by the low APR? Only the OP can decide that!

OP, take a look at the Skoda Citigo- it's basically a VW Up! but a tad cheaper, think they're made by the same manufacturer. Incidently, VW's APR is lower again and the Up! was the WhatCar Car of The Year 2012. I know this because I nearly bought one.

smokinaces Mon 06-May-13 21:48:19

thanks craic i will have a look at both of those. I need three seats in the back, which ruled out the c1, Adam and ka so will check out the up.

Theselittlelightsofmine Mon 06-May-13 21:48:32

Can you not get a new car through the DLA money?

Theselittlelightsofmine Mon 06-May-13 21:49:52

Do you get a higher mobility rate of DLA for your DC?

smokinaces Mon 06-May-13 21:54:01

No these, I get low rate care and low rate mobility

inabeautifulplace Mon 06-May-13 21:59:55

I understand where you're coming from, it's nice to have a brand new car. I had a similar choice recently and chose to buy something 6 years old. Here are my reasons:

In 3 years I'll own the car outright. It'll be worth about 80% of what I paid, because most of the depreciation happened before I owned it. The previous owner lost £2.5k in 2 years! The owner before that about £7k in 4 years!

I can have the car serviced wherever I want - not needing to pay main dealership prices. I think this could be a condition of your warranty, can they still do that?

An MOT costs £50, so paying for that isn't an issue.

I got to choose a car I really wanted, rather than having it slightly dictated.

To feel better informed, I would add up the initial lease costs including interest, plus the cost of financing the final payment. Look at that number, then think about what kind of used car you could get for half of it, leaving much more than enough to cover any problems that might occur.

jackstini Mon 06-May-13 22:00:10

Why buy at all?
Have you looked at leasing a new car?
Having worked out the difference between depreciation and lease costs we have leased our last 4 cars.

Change every 2/3 years, no MOTs, tax included and all under warrantee.

Doesn't have to be a big car either - you can get a Citroen C1 for under £60 a month. smile

inabeautifulplace Mon 06-May-13 22:13:18

With a big deposit?

WMittens Mon 06-May-13 22:19:54

I am stuck between rock and hard place with finance / loan.

If i go for second hand, most I can afford is £3-4k which means I have to buy older. This means car will only last me four to five years again. And will inevitably cost repair wise.

Why can you get finance of £8K, but not a loan? If your credit rating is that bad, are you sure you'll get that good a deal on the Kia?

If anything, we're telling you to buy older - £4K will get you a lot of car.

0% credit cards are only for a year or two. Then the Apr is higher.

Then you do a balance transfer to another 0% card - it costs less than 3%.

The insurance on a jag alone for me would be a years payments I swear!

You'd be surprised, insurance can be quite low on Jags because they tend not to be crashed so much.

HerrenaHarridan Mon 06-May-13 22:20:31

I have been scouring this thread hoping it would bring some resolution to my similar dilemma, it has given me a headache and now I'm going to bed, I think I'll try and understand it all tomorrow!

Littlehousesomewhere Mon 06-May-13 22:26:10

Our car is 13 years old and I wouldn't consider it ancient yet. I would call it "older", although it is in very good working order so maybe it is just a better make/model than yours.

I would buy a new car and then keep it "forever". This is what I'm planning on doing for our next car, hopefully we won't be needing one for another 5 years or so.

I wouldn't worry about why others think. Research it though and make sure it is considered a reliable make/model as imo cars shouldn't have big problems or be called ancient until they are 15+ years old and you don't want to make the mistake of choosing a poor make/model again.

WMittens Mon 06-May-13 22:26:38

Why buy at all?
Have you looked at leasing a new car?
Having worked out the difference between depreciation and lease costs we have leased our last 4 cars.

The leasing costs are the depreciation - you pay for the loss of value plus finance house profit.

Doesn't have to be a big car either - you can get a Citroen C1 for under £60 a month.

For that sort of deal it's going to be, what? 6+36 months or 6+48 months and 5000 miles p.a.? Also, leasing ties you in to the deal, at least with PCP you can get out of it at any time, if circumstances change.

Whichever way you crunch the numbers (and I've done a lot of crunching!), driving around in a new car will cost what a new car will cost - there's no way around it, just shuffling numbers.

This has just reminded me of another point - GAP insurance. Add that in to your calculations - if your car is written off in an accident, you owe the difference in value and the balance of the lease.

WMittens Mon 06-May-13 22:27:29

Ponyofdoom
diesel!

Ah, I was hoping it was an XJ. Is it an X-Type or S-Type?

smokinaces Mon 06-May-13 22:29:41

WMittens, my credit is fine. I mean for my monthly outgoings. This finance is done on a 60/40 deal - you pay 60% over the three years like a lease, but at the end you can either refinance the remaining, or hand car back, or trade in etc. So the initial finance is a smaller amount than it would be if I bought outright, and not as long a commitment - and on an apr of 4.9% which my bank cant get near.

Credit cards, well to get one with that kind of limit would be difficult surely? My current card has a top limit of £4k. (and is a card Ive had a while so apr isnt great, I need to switch tbh, even though there is very little on there)

There just dont seem to be the decent cars, with the safety ratings etc, out there on an affordable monthly payment when I have no deposit. My car has been valued at £130 scrappage. The only places when I rung up and enquired locally which would take on low finance apr with little or no deposit were the main dealers of Vauxhall and Kia. The smaller garages wanted either a larger deposit or a higher apr.

Jackstini who do you lease through at £60 a month for a C1? I need 5 seats (shared school runs) so cant go that small, but at that price it could be an option.

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