Tell me about the best way to buy a car

[Lucylocket13]

I need to buy a car but don’t have any savings to buy one outright. Can really only afford £200 a month payment. Can you let me know the best way to do this? Can you lease a second hand car? Thanks so so much for any advice

Have a look at interest rates and see what’s the best option for you. Often a personal loan from a bank is cheaper than car finance. But depends what you want and what type of car you want for the money.

Go to a dealer and say you can afford 150 per month.

Leasing we tend to find is best value for us, but you do usually have to pay a deposit.

Do you live somewhere with a car sharing scheme?

Thank you. With leasing is it like ‘renting’ a car? You give it back after 3 years or so & lease another one?

Yes, basically. For some reason I don't quite understand it's usually cheaper to lease for a short term e.g. 2 or 3 years.

They are usually new cars but possibly it's an option to lease a second hand car. However being new is generally an advantage as it means you don't have to take it for MOT as still under warranty and you know that it's unlikely to break down etc and cause you massive repair costs. Sometimes you can get a service package included too which keeps the car in good repair and means you don't have to think about it.

It's also a good option if e.g. you think your financial situation will be different in a couple of years' time and you'll be able to afford something better then.

It's worth comparing the total cost of the lease (deposit + however many monthly payments) to what kind of second hand car you could get for roughly that budget and what a loan for that amount would cost you monthly over 2/3/5 years. However if you're going to buy an older second hand car it really helps to enlist a friend who's into cars to suss them out for you - we don't have a clue! And that can be a problem. If you can only afford a very old car, then you have the problem that it can be unreliable and cost you money in repairs.

You do need to factor in the cost of good insurance if you lease because you need to ensure that the value of the car is covered if it gets written off for any reason, otherwise you risk being in a really shit position if anything happens to it.

Moneysavingexpert is generally good if you want to compare different options:

https://www.moneysavingexpert.com/loans/hire-purchase/

Thank you so much - lots to think about. I’ll have a look on the MSE site as well