How did you buy your car?

[littlebylittleandlittle]

I do a lot of driving and I see so many big, really nice cars on the road and sometimes wonder how the majority of people buy cars these days? Do people use PCP or HP deals to buy/lease them monthly or tend to buy outright?

I'm looking to buy a new (er) car but have always preferred to buy my cars using trade-in value plus cash so that I own it up front, usually in the region of 8-10k.

But when I see lots of cars worth 30, 40, 50k upwards on the roads I wonder if most people buy cars on PCP now? How do you get round the mileage allowance? Some seem to be set quite low at 6000 miles a year.

So yes just curious as to how people pay for cars these days. On monthly payments or buy up front?

Interesting to see the responses on here are almost entirely in the "buy it outright" camp given that around 70% of car purchases in the UK use some sort of finance; says a lot about the MN demographic perhaps? Or just the people most likely to comment on the thread are those who think car finance is a racket and want to make it clear they haven't fallen for it whereas those who are using finance are keeping their heads down?
I'm probably massively overthinking this (it has been known)....
I bought my car at 2 years old with a combination of trade-in of previous car and a bank loan, which I paid off in about 18 months hence minimal interest.
To answer your question OP, yes, the vast majority of the big fancy cars you see are either 1. on HP/PCP finance 2. leased 3. company cars 4. owned by drug dealers. With a very small percentage actually bought outright.

I couldn’t cope with any debt commitments other than our mortgage - the idea of being tied into hundreds of pounds of payments every month just for a car brings me out in a cold sweat. We’ve always bought cars outright for cash, maximum price of around £10k. Yes we lose interest on saving the cash but you’re back in the black after 3 years. We bought my last car in 2016 and it’s still going strong.

I also try and cycle places as much as possible to reduce wear and tear on the car. Don’t get me wrong, I would love a flash car, but HOW MUCH??

To add - we always pay the deposit on a credit card for consumer protection, and if I had to borrow, like a PP I’d much rather have a bank loan.

If we were wanting an electric car we might have looked into the salary sacrifice scheme my company does for those - they're maybe a bit different because the technology is evolving, current battery life isn't great so changing those every 3 years might make more sense than with IC cars.

Generally the cheapest way of doing it - if you have the disposable income of course - is but a car on PCP, as there will often be dealer contributions, lowering the price - and then ring the finance company up and pay off the finance then.

I am old now and have got through six cars in my life. I buy in cash. Usually a one year old car. Keep it until it’s about 8-10 years old and repeat.
I mark £100 of savings as car money so have enough for my boring and sensible replacement when it comes around (Focus, Zafira type cars). Last one was £14k and I did get some surprise that I was buying cash. Last three have been from a car supermarket (Car Giant) and no problems with them.

We do both. My car is a pay monthly and I can swap every 2 years. So no MOT and touch wood, little maintenance.
My latest one I'm keeping for the full 4 years that you have to before you can get out of the contract. Then I'll do the same with totally different make/model.

DH always buys outright. Not brand new but newish (couple years old)and a lot fancier then mine!

DH bought his almost new car trade in and cash. His car is lower end of the amount you have written. He has had it for quite a while now, about 8 years now and reluctant to change as it is only £20 per year road tax, that deal isn’t available now.

@hardworkandabitofluck Yes you’ve nailed it. Munsnet isn’t typical and commenters are likely to be those who feel strongly about saving for a car as a standard expense. Debt is horrible and should be avoided where possible.

We buy ours on PCP, looks
like we are one of the only ones on MN

Surely you end up paying way more on HP

One car is HP and one car we managed to buy outright but it wiped out our savings and we had to get some help from parents. We’re fortunate they could help us and we had the savings. And that we had a plan to rebuild our savings. Not everyone does.

I bought my first car outright. An 11 year old little run around with high mileage. It didn’t last a year and we spent £3,000 in repairs in that year. I got £300 as scrap value. After spending £3000 on repairs, we hadn’t managed to save anything and couldn’t afford to buy a new car but also couldn’t afford to keep it running. We got another car on HP, we bought one that was about 7 years old and lower mileage, paid it off and traded it in for one that was about 4 years old on HP again. We paid off the HP and traded it in for our current car which we bought when it was two years old.

Our current car is paid off in June and next year we will trade that in for something that is low mileage and about 2 years old again. For us, this is working because we are building our deposit each time. We aren’t going for a new car as they depreciate too quickly but we want a reliable car and selling while it’s about 7 years old retains some value. Our initial choice was another old car that would be unreliable or HP and HP was the better choice. We could have then saved and ran that car into the ground but while running it into the ground we could have used our savings trying to keep it going putting us in the same situation of buying an unreliable and old car.

I might be vain, but only about my car. I love the thing. Its comfortable, reliable, useful, and pretty. It's also expensive but I can afford it so I don't mind. 🤷🏼‍♀️

Just recently got a new car (well second hand not new!) as my last one died on me, I took out a small bank loan to get it.

I'd say 90% of people are leasing / hp or motability cars .

No one would buy a £60k car . It makes no financial sense anymore

Even ford or Vauxhalls are £30-40k !

We bought our latest cars with cash but I'd def say we are unusual where I live

We generally own cars for ten years or so and pay cash. The last car purchase we had the full amount in savings but the salesman offered us a better deal if we paid twelve months on finance and then cleared the balance. I'm extremely debt averse.

We bought ours new outright. We’ll drive it for 10+ years then get another new one when it’s becoming a faff to maintain. We already have savings set aside for this.

Just bought a high end suv. I was going to buy cash but they had interest free credit so took that and banked the money in a high interest bond.

The price was the same as nearly new and probably will earn a discount through the interest earned. It's probably not the most financially savvy way but I like to own my car and bash it about which you can't with other options

I do think it works out financially better to hp or lease or whatever with bigger value cars as you're probably better off putting the money elsewhere.

Also a lot of people are using their business to finance cars.

Always cash

Your 'garauntee' is wrong.

My car is an 8 seater Landrover Defender, cost me £98,000 - I paid for it and thus I own it outright. It's a beast, and I love it.

My DH owns his car outright.

My DSS bought his first car outright, too (he's almost 19), and we paid a percentage, his Mum paid a percentage, and he paid a percentage.

My Dad taught me when I was very young, if I had to pay for a car monthly, I couldn't afford it. I've followed that my entire life and have always owned my cars.

I've nothing against anyone that leases, and I'd certainly never look down on them for it.

Perhaps teach your daughter not to make blanket assumptions unless she has access to the credit files and bank accounts belonging to the people that she's making the assumptions about.

OP, my simple rule of no credit for a car means that I've been able to over the years, buy, save a little, sell the car I have at the time, add the little savings and buy something slightly more expensive. Rinse and repeat.

Mine is motability

It's costing me roughly £13500 over a 3 year lease for a £32k motor

Prior to being in the scheme I bought 3/4 year old cars using trade in, a bit of savings and the occasional gift from grandad

Mine is a lease from work. I do a lot of miles for work, so it makes sense for tyres and servicing, etc.
DH owns his, so when I retire, we will likely go down to one car.

I got mine (used, 17 plate) in 2019 on PCP finance. When the finance deal ended the balloon payment was 4k, but due to price rises in the car market it was still worth 9k. So I took out a personal loan to buy it outright.

We were planning to buy a car (outright) that was a few years old with some inheritance money.
We saw a black Friday deal where a brand new model was barely different in price, so we bought it. The dealer said he could only offer that price if we bought on Finance, so we did. But paid about 3 months of finance and then paid off the balance in full.

(Its not a particularly big car and not as expensive as the examples in your OP)

Bought new £48k car last December. In cash.

We buy new/demonstrators and keep till they die. Put money in savings for the replacements.