Buying a car on a contract instead of outright.

[NoLactose]

I don't get how this works.
Don't you just end up paying loads more for the car?
Please can a nice patient person please explain?

It’s complex and depends what the alternative is. Buying new cars outright, and then selling in 2-3 years plus covering servicing etc can well work out more expensive than taking one on various other forms of credit. Essentially you finance the depreciation and generally benefit from whoever is selling the car gaining fleet rates on insurance and servicing.

Personally I buy used cars and keep them till they die, but I am very happy to drive a fifteen year old car.

If you have savings it's better value to buy a used car (anything over a couple of years).
People who don't have savings have no option but to buy on lease type agreements.
I presume there are also people who just want new cars just because they are shiny and new. But the depreciation in the first couple of years is huge, so if you're looking for best value don't do this!

We were just looking into financing for DDthe other day. I have never done it, I have always bought my cars outright, either new or second hand (when I say new I mean a pre reg < £12k cars) so had no idea how it worked. We thought there were too many conditions. The mileage for a start - the finance was shown at £8k miles and to put it up to 15k per year was an extra £8/£10 per month depending on which car we were looking at - I couldn't get my head round not being able to simply drive your car without considering the mileage!