Do you buy your cars outright or on finance/lease?

[Daddypigsglasses]

I’ve always saved up and brought a nearly new car then run it into the ground. It was instilled into me as a child that borrowing money was bad and this is the way my parents always did it.

I need to replace my car soon and it’s become blindingly obvious to me since my kids started school last year and I began noticing the other parent’s cars that we are the only ones (and I mean only ones) driving around in anything like a 12 year old focus.

Do most other people else get cars on finance? Is it the sensible thing to do? I can’t get my head around it. I’ve got around 8k to spend so likely that would get me a 15 plate decent car, which is still going to be older than everyone else’s!

I’m not usually showy but I seem to have serious envy where the other parents are concerned.

8k should get you a pretty decent car. Don't have car envy! You'll be safe in the knowledge that you own your car outright. Other people may be up to their eyes in debt. Use any extra cash you now have for nice things! (however if you ever do want to borrow money for a car, I would suggest a bank loan rather than finance through a car dealership)

Only on mn is 8-15k considered a cheap cash purchase lol.
I would never buy a new car but i have been shocked by how much even second hand family cars are.

Outright a year or so old.

However it was once cheaper to buy new, so I did.

Last car was 19500 3 months old. New (with 0 percent finance) was 23000. So whilst finance looks good it was considerably more expensive.

Outright no need for all that depreciating value attached to a debt.
My car is 10 years old doesn't look it though. I wouldn't be bothered what you drive vs what other people drive, but if you're purely bothered about the "age" you could just put a cheap personalised plate on - can get one for about £200.

I usually buy outright but I bought a newer car on finance but paid over 1/2 upfront.

Just bought a 17 plate Kia Sportage paying 50% upfront then the rest on 0% finance over 2 years. My last car I had for 10 years so I think I deserved an upgrade :-)

It's better value to buy a used car. I recently bought a nearly new car outright, less than 5k mileage and it was about one third cheaper than brand new - absolute bargain.

You could consider adding to your £8k budget by putting some of it on a 0% interest credit card that you pay back over a year or two. I think car dealers will let you pay for some of the cost using a credit card (ours did, we used it the credit card for the reward points more than anything).

As for specific car recommendations, I suggest Skoda because they're good value, made by VW but lower prices. What Car suggests you could get a decent Skoda Octavia for your budget:

"Up the wedge to between £8000 and £10,000 and you should find a good 2015 car with a full history and an average mileage from an independent dealer."
www.whatcar.com/skoda/octavia/hatchback/used-review/n851/ownership-costs

Outright. It's a 16yr old shit heap but it does me fine for shopping and the school run. I have in the past leased brand new cars as my DF works for a car company so I got them at a discount and with no deposit. But I could only lease for a year at a time before handing it back and each year it was getting more expensive. In the end it would have been £260 a month and I just couldn't justify that monthly cost without ever owning it. It was great having a brand new car every time but I'm happy I don't have the monthly expense anymore.

You could also consider the Seat Leon
www.whatcar.com/seat/leon/hatchback/used-review/n805

Outright and second hand! Never spend more than £500, run them until they fail the MOT after about four years and then start again. Cheap motoring!

My current car is 15yrs old btw, had it 5yrs, passed every MOT since I've had it!

@AnotherEmma Škoda Octavia was actually what I was thinking! Will have a good look around now.

Outright and secondhand here too. Usually in the 7-8yo range though my current one is now 11.

Outright nearly new but keep for a few years, not run into the ground.

Hire purchase on my current one, zero interest and I paid it off in full by 3 years. Still going strong and it's 12 years old so definitely worth it. When it does give up I will try and get similar.

We also bought our other car on pcp with deposit. When the deal ended we put the rest on a credit card, then transferred the rest to a zero percent card so the only cost was a small fee for the first card payment. We plan to keep this one for years too. The monthly card payment is the same as the pcp was. We prefer to buy things outright but don't seem to have a spare 17k knocking about!!

I’m driving around in a 12 year old focus too! Bought for £1000 five years ago and happily doing 200+ miles to London (and back) every week.

That's what we have and we're very happy with it! Absolutely massive boot!

FWIW the dealer let us pay for up to £5k on a credit card.

Paid 3k five years ago for what is now 17 year old car. It's fine. I don't give one hoot what other people drive and I'd think someone was pretty shallow if they judged me for what I drive

I put my last one on the credit card ( have nothing else in them. ) and paid it all off as quickly as I could. As an example I bought one last August. I have paid it off already.
I didn’t want to but my last car was so awful. Nearly killed me a few times it was that bad.

But. I now own it. I only buy a new car when my current one is falling apart. I don’t really care about cars really as long as it gets me from a to b that will do me.

I took out a loan with my current car I have a monthly Car allowance from work which covers the costs I don’t like car financing you give them a hefty deposit they then take a monthly amount and at the end of it you have nothing with interest rates being low I took out the loan Repay a minimal amount over the initial loan value and the car is mine to own with at the end of it

Previously when working full time outright. Now a loan, but it works for me

People who look at the bottom-line price of their motoring buy outright. It is the same with most things.

The reason people don't buy outright is that they often can't afford to, but want a better car than they can afford or are willing to wait until they can afford. Another reason often given is that they want or need a really reliable car and that means a new car - this is often related to not having many if any savings behind them so fearing the cost of expensive car repairs and being willing to pay more over a period of time to avoid costly one-off costs.

For lots of people, having a car loan, even if no further credit beyond a mortgage is just life. They expect to always be paying one off. When it ends, I've heard people speak about having a 'free car' now - meaning that they don't have monthly payments, but often this means they are looking for another or considering another bug expense such as a holiday, because the idea of just having money sat there building up is a bit of an anathema and it is burning a hole in their pockets.

There are some decent deals, but ultimately, the cheapest way to be motoring is to buy decent 2nd hand cars outright. It seems to me that a 3 year old car from a main dealer which comes with the same warranties as a new car is good value per mile.

In the end though, best value for money isn't everyone's concern. As long as people recognise they could drive cheaper, I think it's fine if they choose to knowingly spend more to access a procure they couldn't otherwise afford. I wonder how many people know just how much more expensive over perhaps 10 years it is to perhaps have 3 cars on credit agreements with monthly payments vs perhaps 2 cars bought outright which were 3 years old when purchased outright.

We've done both. I enjoy owning my car outright and not having to worry about damage to the car (if it's a lease that you eventually give back, although most people seem to have no trouble with this, especially if you are just taking out another deal afterwards). But I disagree that people use finance solely because they can't afford to buy outright. Cars loose value very quickly and so if you enjoy getting a new car every few years, or don't want the trouble of MOT/service/repairing a car, I would say finance works better than buying.
Our finance car was in an accident and written off, but the gap insurance covered the cost and so we got back all of our repayments from the three years we had the car, and owed no remaining payments to the finance company. In that way we ended up financially better off than if we were to write off an older, owned car.

Paying £150 a month for a car that will never need to be MOT'd, with a yearly dealership service paid for, better safety and technological features and hopefully very unlikely to need any serious repairs, can actually work out much better.

It's a tough decision though, go with what suits your family best.

I buy outright, and second hand, 2-5 years old. My current car is 15 years old, and pootles around fine. I did get slightly nervous when I had to make round trip of 250 miles for work, with only a day's notice, but it managed no bother. I get no pleasure from driving (DH has something far smarter and driving it does nothing for me) and I think old bangers have more character.

I've always paid for mine - don't believe in finance.