to want to get a car on HP

(26 Posts)
CocacolaMum Fri 30-Aug-13 09:46:35

a bank loan isn't an option unfortunately but I am so sick of my current 10 yr old car being unreliable. My dad is not happy (yes I am 31 but still) but I was looking into part exchanging my current shitmobile and putting the 1k they have valued it at (it wont be when they look at it) toward a newer one on HP.. repayments are going to be about £150 a month which should be manageable.

So, AIBU and should I as my Dad suggests just be a bus wanker (thanks dad) until I scrape together the dosh to buy an el cheapo car off of gumtree or similar?

MissMummy1 Fri 30-Aug-13 09:50:44

I am in a similar scenario. Have a look on arnold clark's website. they let you put in your monthly budget then show you what is in your pricerange. They have some cracking deals on some 3/4 year old cars

cocobongo Fri 30-Aug-13 09:50:48

Well, depends on your circumstances. How much do you need a car? What are your alternative travel options?

I live in a city and found that I wasn't using a car that much, so was much cheaper just taking the occasional taxi for circumstances where it would make life easier (eg supermarket shopping). £150 per month + insurance + petrol + tax + repairs can suit equate to quite a lot of taxi journeys!

ThedementedPenguin Fri 30-Aug-13 09:54:49

I have just finished paying my car on HP.

I will never do it again.

When I took my car out 4 years ago I never thought I would have an issue paying. Then I was made redundant twice and found myself struggling to live on jsa and pay my car off. Thankfully it's over now.

I really need a new car as its just too small now, however I will cope with that car until I have the cash to buy a different one.

It worked out I paid over £7000 for my car that was £4000. So you do pay a lot more.

If you are considering this, think about how you would make the payments if you lost your job.

Bumblebee333 Fri 30-Aug-13 09:59:19

are you looking at new or used?

Thepursuitofhappiness Fri 30-Aug-13 09:59:35

There are two options really, you can choose a loan where you keep the car at the end of it. These are the highest cost. Also be wary that car dealers will tell you an interest rate that is a 'flat rate' interest, this is a con and you need to ask what the APR is (which will be at least double the flat rate).

You can also get a loan agreement which is cheaper, but you hand back the car at the end of it.

If cash is an issue I'd shop around for a second hand 3-5yr car and get finance on that rather than pay a premium for a new car.

TheCatIsUpTheDuff Fri 30-Aug-13 09:59:41

My dad's advice was never borrow money to buy a depreciating asset. I agree with him up to a point. If I'm reading this right, you could manage on the bus until you've saved up for a cheap car - that's what I would do.

If you go the HP route, your total cost with interest will be way more than the car's worth now, never mind what it's worth when you finish paying for it. If you have an accident and it's written off, you've got no car but the bills continue. Stick with what you can afford, and save a bit longer.

Enb76 Fri 30-Aug-13 10:03:35

Do you have any savings? I bought my car (Skoda Fabia) for £1200 three years ago and it's still going strong - that would take you about 8 months to save up for if you can actually afford £150 a month. I love my car, I've had snazzier more expensive cars but this one is a proper workhorse and coming up to 15 years old. I don't think I'd ever buy an expensive car now.

Locketjuice Fri 30-Aug-13 10:04:26

Don't do it!
If they have offered you 1099 that's trade you could most likely sell im your private for more, for 1000+ you can get a reliable car, mine was £300
And never had an issue! smile

Don't get yourself in debt for a car, my insurance is crippling (& depressing! £170 pm!!!) enough

Locketjuice Fri 30-Aug-13 10:05:13

I have a cracked screen I'm not completely thick haha smile

AndThatsWhatIThinkOfYou Fri 30-Aug-13 10:07:05

it will probably save you more money in the long run, as old cars tend to fail mot and need work, where as brand new/nearly new cars usually have 3 year service plan, and after a set amount of years you get a new car. best thing I did.

CocacolaMum Fri 30-Aug-13 10:08:15

yeah I am looking at 2/3 yr old cars through a car supermarket style place

I live in a city and could probably manage everything else but the problem is that my granddad who has had 2 heart attacks in the last few months is a good 30 miles away in the middle of nowhere so I feel like since the rest of my family wont step up and visit it falls to me and without a car I think its about £15 a trip on the train

MolotovCocktail Fri 30-Aug-13 10:09:10

Personally, I prefer having cars on HP because having them for 3 years from new means that I have to pay no MOT costs and repairs (if necessary), are covered by the warranty.

Cars are not built to last and I prefer to drive them when they're new and get a different one before things start to go wrong (which is then need to pay for).

It is a pretty hefty contractual agreement which, if you cannot keep up repayments, will have consequences. You need to go into it with your eyes wide open, and dot get smooth-talked by the sales team. Go in knowing what you can afford; what your top price is to repay per month and do not go any higher.

And yes, you can get used cars on HP but bear in mind that unless you purchase an extended warranty, you'll be responsible for those kind of costs, as well as MOTs, etc.

£1000 seems like a nice deposit, too, particularly on a car under between £6-8k.

McNewPants2013 Fri 30-Aug-13 10:12:06

If you do get gap insurance.

I do the same as Molotov, new car on HP, drive if for 3 years then swap it for a new one. No mot to worry about, new car every 3 years, hassle free driving.

EeyoreIsh Fri 30-Aug-13 10:21:12

We've just bought a new car after years of old bangers costing us s much as a new car would have done.
But we didn't go with HP as all the time you're paying the HP off the car isn't yours, you're just hiring it. And the APR worked out far higher than a bank loan.

If you can get an HP finance deal you should be able to get a loan from elsewhere.

we've taken the loan over three years so that by the time the car is out is warranty it'll be fully ours. We also took out gap insurance.

We bought two brand new cars on HP and don't regret it - the interest was really low and the payments were affordable.

We didn't have a choice as we both commute and needed reliable cars or we didn't get paid. Dh got a lift in with a friend for one week and it was so difficult for him he was convinced to buy a new car - I can't stress how unlikely that would be as he's the tightest Yorkshireman in the history of the universe grin

Maggietess Fri 30-Aug-13 10:30:09

If you do decide to buy it my advice would be to make sure you also work out the overall cost.
When we were car shopping I was amazed at how many of the dealers quoted me the monthly cost, I thought it was too expensive so the reduced the monthly price they quoted by extending the term of the loan thereby increasing the overall cost.

Most of them didn't say that this was how they were doing it, and I think that some of them genuinely believed they were giving me a discount by reducing monthly payments. They really didn't understand that increasing the term massively increased what I would pay overall!

From what you've said it's not unreasonable for you to get a second hand car on HP but I'd give myself quite a bit of wiggle room between the monthly price and what you can actually maximum afford just in case your circumstance change!

I also second checking out whether a bank loan would be cheaper than the interest on HP, particularly if your car will be less than £10k.

Marrow Fri 30-Aug-13 10:42:10

Skoda have got some great deals for new cars at the moment. My sister had just got a new Citigo and is paying £79 a month. The insurance is buttons, she's got three years free servicing and the car is tax exempt. After three years she can pay off the balance, hand the car back or start another PCP scheme. They might be worth looking at.

Amateurish Fri 30-Aug-13 12:09:01

Get a cheap lease or PCP on a new car. Should be possible on your budget. Then no worries on reliability, tax or servicing. Avoid the car supermarkets they will totally fleece you. Lots of manufacturers are doing cheap deals at the moment. What size car do you need and how many miles will you do.

LimitedEditionLady Fri 30-Aug-13 13:07:45

Im looking for a car atm,cant decide whether to get a pretty darn old one or finance it.insurance is going to be a big expense for a while which is why i was thinking should i just get a banger for a bit?

littlemog Fri 30-Aug-13 14:00:54

I wouldn't.

Beastofburden Fri 30-Aug-13 14:33:07

If it really is just to visit your grandad, you don't need to buy a car at all. You can join your local car share club- there are loads- and just pay for the time you use it.

W don't have a car because after my latest crapmobile died, I couldn't face spending that kind of money on a nice car but was sick of driving rubbish cars. I use zipcar which costs me £5-7 an hour depending on model, for car, tax, petrol, parking fees, service, insurance, MOT.... Some months I spend literally nothing. I never go over £100 a month.

Or borrow your dads car to visit your grand dad.

We are too quick to assume we have to have a car, it's unavoidable. We spend a lot of time asking how cheaply can we do it, not enough thinking why bother? If like me you like in a city, even with DC, there are alternatives

Blissx Fri 30-Aug-13 14:37:08

I am currently on a PCP (private contract plan). This is different to a HP as you pay less per month with the view that you are highly unlikely to buy the car outright at the end and can just swap it after 3 years for a newer model. I prefer this as the dealer is bearing the bigger brunt of the depreciation of the car. I have previously lost so much money on buying cars in the past that lose thousands in depreciation and fixing the car, MOTs, road tax (new car has no road tax) and that I only do this now.

BackforGood Fri 30-Aug-13 14:46:20

A agree with TheCatIsUpTheDuff's Dad - madness to pay the sort of interest rate you would pay on HP on an asset that is going to depreciate as soon as you've got it.
I drive a 1997 micra. Yes, we probably pay out between £200 and £300 a year in repairs / maintenance, but that's a heck of a lot less than the £1800 you are talking about paying on HP, and of course you may still need to replace tyres, etc., as any car driver might - things like punctures aren't dependent on age of the car. You can buy loads of cars for less than £1000. Even if you were really unlucky and got one that didn't last beyond it's next MOT, it's still cheaper than HP payments, come to think of it.

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