Do you have a finance on your car?

[MsMiaWallace]

Only bought our car back in Feb & starting to get issues. Thinking of buying something newer but would need a loan.

I see loads of new expensive cars in the road & wondered how everyone affords them.

Do you have a car on finance & if so how much are your payments?

We got a loan from the bank rather than finance- thankfully just paid it off which will cover the increase in energy bills

I've never bought one on on finance due to the interest, always outright depending on what I can afford (usually 3-5 years old). We bought a brand new one for the first time ever this time due to very good perks such as government grants and 7 year warranty but it's probably a one off!

My last few cars have been on a pcp deal, the way I see it is like upgrading your mobile phone every few years.

No we don't. But it feels like most people around me do. My understanding is that's why there's so many expensive cars around. And that's the model dealers now use as that's where they make their money.

If you don't want finance it would be worth really researching the car you buy. Some have known issues, some don't. When we buy a car we already know exactly what we want down for the years. We already have an idea what we want in a few years fine, just waiting for the price to drop enough and keeping an eye for any issues.

We buy them, run them a good few years, then scrap them.

Got a two-year old Ford Focus with 11000 miles on the clock from a Ford dealer nearly four years ago. Cost was £11000 and paid £1000 deposit and traded in my crappy old Corsa. Got a £9000 personal loan with a decently low interest rate from Admiral and the payments were £200 per month. Have two payments to go and the car is mine. I’ve really looked after it, nothing has gone wrong, and due to Covid, wfh 3 days a week and cycling to work it only has 35000 on the clock. I’ll be keeping it for at least another four or five years.

I had a lease car from work that only cost me the tax of £80 a month, but got promoted to a job that didn't need a car and had to give it back. Bought a 5 year old i20 with a bank loan on a good interest rate, paying £150 a month. If I want to sell it I can just pay the loan off without penalty.

Brought my car outright for £1k, 5 years ago 😂 it's 15 years old. No issues. It's obviously an old banger but does the job and has got us to France and Scotland and back this summer, plus daily commuting to work. Always passes the MOT.

I would much rather put the money I'd be paying for a car payment into a S&S ISA every month? I'm reading this thread I feel like the only person who doesn't think monthly car payments is an investment.

Hate the thought of paying £10k on a car that's going to be worth £2k or similar in 10 years.

Yeah and it can be a good idea if you get 3 years free MOT and servicing along with the car (think Arnold Clark do this). By the time your free MOT and servicing is up, it's time to change car normally.

I think Kia is 7 year guarantee as well but could be wrong. It's worth checking that out though.

I'd say Toyotas, Ford's, and Volkswagens are quite good in my limited experience. I had a Ford Fiesta until it was 15.

Never used finance. Just buy a 2nd hand outright. Both got hybrids atm. Upgrade every 3-4 years. Suits us fine.

Yes, just took out a bank loan over 3yrs (£8.5k) on a 2016 car, £245 pm- Interst over 3yrs is £600.

just to add, Last car was 17yrs old, sold it for £1k last month and it passed MOT- Brilliant car, Audi A3.
Just needed bigger !

No I don’t have finance and I don’t buy new. Buying on lease/PCP finance is a much more expensive way to run a car and if your circumstances change it can leave you in trouble as PP have said.

I put money aside into ‘car replacement fund’ savings and ‘car maintenance’ savings each month.

I bought a very nice 4 year old second hand car for cash (£13,500 in 2013). I am still driving it today so it’s 13 years old now and I still like it.

It still is worth a few thousand so in depreciation terms it’s cost me about £70 a month. Round that up to £100 a month for a few age related repairs over the years.

Most people driving fancy looking new cars are either driving company cars or paying through the nose for lease/PCP. A friend who saves up and buys her car brand new for cash said that all the garages were displaying the monthly cost on all the models and she had to ask how much the car was to buy outright.

If you don’t have the savings to buy outright, use a cheaper than car company finance bank loan and when it’s paid off, keep the car for a few more years and keep saving the same amount as the loan payments were towards your next car. Eventually you will be able to buy for cash using this method.

We've got a newish Hyundai i10 on lease, a VW campervan we converted bought outright and daughter has a fully electric fiat on motability. The campervan also serves as a holiday home 😁

I used to always have cars that were only £2500 or under. I'm fortunate to now have a good salary but I really do shop around & it varies so much depending on what you buy.

For example my previous car was a top spec fiesta which was 18 months old when I got it. I put £1500 deposit down & then it was £145 per month with a balloon payment of about £4500.

I recently traded that in early to get a bigger car (Cupra Ateca) which I had £4500 equity from my fiesta as a deposit & pay £340 a month. I could have got something much cheaper a month but this will be the last time I probably go high spec and PCP style finance.

A lot of family members have chosen to lease now instead as the servicing etc is often taken care of by the lease company

Nope, save and pay cash, just bought a 2 year old Audi, use a savings account and start putting money away each month towards the next car in about 6/7 years. Appreciate you need the upfront cash, we had a windfall to enable this. I also do this on a smaller scale with phones, all the family have a decent iPhone, not latest model, and £5 sim deals only.

Yes I have a Jaguar on PCP at moment. I like the knowledge that one monthly payment pays for a lovely to drive, safe car that is covered by warranty if anything goes wrong (if I bought outright new or second hand I would still need to save a monthly amount for my next car). Under my agreement I actually only pay interest on the difference between purchase value and expected value at end of the deal (so the depreciation not total cost). I can also hand it back at any stage. I hated owning second hand cars and worrying they would break down, costing me £££ and sit at the garage leaving me without a car. If this one is in for MOT, service or repair I get handed another car to drive for the duration, no stress no fuss.

We get a loan from the bank rather than finance. Couldn't afford it out right but having a new car saves so much on repairs. The 116 I put in for the mini I have now needed nearly 2k spending on it in repairs.

Yup, but recently paid off the loan. Used a personal loan from M&S Bank. The interest rate they offered made sense vs. dipping into savings.

We never buy new, always look for something around 3yo. Current car is now 9yo and (touch wood) still going fine and is in good condition. But we don't do a lot of miles - even less since covid and WFH. I think we put just over 2k miles on the clock between the last MOT and the previous one.

PCP and leasing suits some people's requirements, but not ours. They're not for everyone so don't rush into either of these without thinking it through.

We've always paid cash. I'm not hugely bothered about the age of a vehicle - but there are certain specs that aren't negotiable for me, and service history needs to be perfect. Had my current car (64 plate ML350) for nearly two years. It was a relative bargain at the time, and with 2nd hand car prices now, I could still sell it at the same price as I bought it. It's only cost me the standard servicing, plus consumables (tyres and brakes). We are meticulous about maintenance though. That, and a little bit of luck has served me with years of trouble free motoring.

Yes I lease my cars. I set a monthly budget and see what I can get for my budget. I would never buy outright for the kind of cars I like as when we have in the past it has been a false economy. My kids share a 7 year old group 1 car which I bought at 3 years old for £3500 and which we will run into the ground.

My PCP includes warranty, 5 years servicing and breakdown.

So although

Ffs, we need an edit button!

With PCP although my monthly payment is high, I have very little to pay out beyond that.

Never had a car on finance. Saved to buy my first which was an old banger I kept for a couple of years. During that time, I saved money each month so I'd have money to buy a better car next time, rinse and repeat for my first 3 cars over 5/6 years. Then I had saved enough to buy new. That first new car lasted me many years and hit 200k miles. I then replaced it with another brand new one which did the same - we've kept our cars for an average of between 10-15 years! The two cars we have now were both bought new, one is 14 years old and the other is 7 years old, both going strong and we have no plans to change either. In all my 40 years of driving, I've only ever broken down once. We drive carefully and always have cars properly serviced according to the handbook schedule - the two we currently have look immaculate and drive as good as they did when new. I record my expenses religiously, buying new and keeping them for years works out a hell of a lot cheaper than forever paying a monthly lease.

But annual basic services in the first few years and breakdown cover is pretty cheap anyway.

@Badbadbunny I like the convenience of everything being including.

I don't plan to keep my car, I will likely change it in a couple of years. I want an electric car and will either PCP again or use my work leasing scheme.

It's not for everyone but I'm very happy with it.