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?

First car misread ad but I was so convinced it said 0 down 0% finance that's what I got. Second car really can't remember. Third car I bought third hand off a friend. Fourth car my husband and I bought the ex demo car from a dealer I think outright. Fifth car I traded in the fourth and paid the difference (another ex demo car). Sixth car on lease deal. Seventh (current) was just before lock down and got a great deal on a new car as dealership wanted to shift as many as possible before they had to shut down. Financed through mortgage increase (back when they were at 1.5%)!
My son will soon be buying his first car - he will be using his Child Trust Fund (about £3k) so that caps it.

I've always bought outright. I always buy second hand cars under £5k. My dad is a mechanic and always advises what to buy. They've always been reliable and get me from A to B. Expensive cars are a monstrous waste of money in my opinion.

Always buy outright, from the leaky sheds of my youth to the lovely car I drive now. Childhood indoctrination of ‘if you have to borrow, you can’t afford it (mortgages excepted)’ is hard to overcome!

Have never bought a car on finance - despite garages trying to pressurise me. If I can't afford it I don't buy it.

I buy an older model and maintain the shit out of it. I can do a lot myself and my husband is an engineer by trade and training, albeit in aviation , so I can call on him.

Currently maintaining an 18 year old rally car on the same principal. (Neither of us are engineers though.)

Lots of people seem to lease cars now. I’m like you my car is older cost £10k and is mine but I get the appeal of being able to budget with certainty. Who knows what it’s going to cost to put a car through mot/ servicing. Electric cars are v. Expensive when things go wrong.

My friend just leased a new car, it’s relatively low cost, courtesy car if things go wrong but shouldn’t as a new car. No mot and free servicing ( well included in the price. )

She reckons it’ll be cheaper than her old car as she won’t need to repair it twice a year at £1k a go.

Ours is on PCP, we have two more years of driving it and then change it for another newer car.

we used to buy older cars outright and drive them until they started costing us money at the garage but the time span of having them before problems arose meant we were spending more and more money, but quicker.

for the people saying those on pcp can’t afford a car like that and shouldn’t be driving it are wrong. We’ve got enough savings to have bought our car outright but we didn’t want to , we wanted to be able to get a newer car after a few years. My car payment is about 12/13% of my monthly wage.

Well I couldn't afford to buy a car outright, but had a baby and toddler and was damned if I was relying on public transport to get them to nursery and me to work, to go anywhere other than the local park and two or three trains to visit my parents (and entertaining / toileting / feeding them on the train). So yes, I bought with HP - finally paid off now and I own my car, paid with my own money. Would have been a totally different life without the car in those early years. Not sure how long to keep it, I guess long enough to save for a different one, although likely to be running up maintenance costs as it's 10 years old now. But we'll never be in position to buy anything big or fancy, it'll be small but functional for us all the way.

Low rate PCPs. Recently they’ve been few and far between but there are now some low and 0% offers to be had. My capital can earn more than the finance costs, as an example, bought a £40k car on a 0% PCP - only a complete idiot would’ve paid for it outright.

We usually buy cash, but we recently moved country and I majorly underestimated how much a second hand car would cost, so this time we did a combo of cash and finance, luckily we were able to find a very low interest loan that we can choose to pay off early with no fee.

We are the same 👍 our PCP % is a lot lower than our savings % so it makes no financial sense to me whatsoever to blow a huge chunk of our savings on something that depreciates so quickly especially as my savings % is 3 times higher than the PCP %

There is no right or wrong answer to how people fund large purchases, there’s no such thing as a cheap run around anymore so it’s about making your money work for you and how you do that is down to the individual

We buy outright but that seems unusual. We also keep cars for a long time.
I bought a 2 year old Zafira 14 years ago for 6K and kept it until it was uneconomical to fix last year.

in terms of the loads of big shiny cars you see, I very much doubt large numbers are bought outright. Many will be company cars. Many friends of mine with fancy cars like just paying so much £ per month to drive a fancy car then swapping it every 3 years (over say 20-30 years this is an enormous amount of money!!!!)
Older cars tend to be owned outright.

My most recent, 2 years old, v low mileage, bought outright, traded in a much older one.

I've bought all of my cars cash, around 3 years old and spent between £5k and £10k, but since my last one (7 years ago) prices have gone up so much, and I now have 3 kids and a dog so need a bigger car than I've always bought which is now well out of my budget

So my next one is on business lease (used, so a bit cheaper) and I can sell my car to put towards other things

I brought my first car using a car loan and since then savings and part exchange, so own car outright. Usually buy second hand 3 - 5 years old and then drive for another 8 -10 years.
I am not too bothered about brand, just need the essentials, 5 doors, air con and sat nav. Encourage DC to do the same as I see no reason to go into debt for a car.

Friends who have expensive cars, have them on PCP or they are mobility cars.

It's not always the best option to buy outright even if you can afford it. 0% finance, or very low % deals, are often available on vehicles and you'd be a bit daft to buy a 50k car outright if you can get it on 0% finance. You certainly couldn't get a 0% bank loan.

It very much depends on circumstances too - my DH does around 40,000 miles a year and it makes no sense to buy outright. At the end of three years, the car has done around 120k and therefore is worth very little and is out of warranty. With a lease car, you just hand it back and start again, get another brand new car under warranty that isn't going to need any expensive repairs (and if it does it's not your problem). When you absolutely need a decent and reliable car for work this makes far more sense.

There's nothing wrong with car finance as long as it's thought out sensibly and weighed alongside all the different options.

But yes, to answer your question, the good majority of new cars on the road are via PCP, lease or company cars.

I always buy cash. Never more than £1k and run them until they give up.

My current car is a little Chevvy bought just over 2yrs ago with 40k miles on the clock, full service history. Brand new MOT, 09 plate, cost me £950 and hasn't failed either of the MOTs I've put it through.

I am 54 and have owned all my cars outright...all 4 of them. All small second hand cars.

We do same as you and same budget £8-£10k.

It's not always the best option to buy outright even if you can afford it. 0% finance, or very low % deals, are often available on vehicles and you'd be a bit daft to buy a 50k car outright if you can get it on 0% finance. You certainly couldn't get a 0% bank loan.

It was 0% or 15% off the book price. We took the discount.

We don’t buy run of the mill cars. Last one we bought is 18 years old and worth more than we paid for it.

Out mileage varies so don’t want limits (I’m
prone to last minute road trips across Europe) and want to be free to modify the car for performance purposes.

So it’s not just a financial decision here. But you made some good points.

@OneMoreTime23 and thats fair enough, far more sense to buy outright in that situation if you could afford it.

My point was more that PCP/lease/car finance is not inherently bad, which is how the collective hive mind on mumsnet seem to always portray it!!

Agree. :)

I am very interested in this as we will need to buy a ‘new’ (to us) car in the next couple of years. Last one we bought 12 years ago second hand and paid cash.

I have zero interest in buying a new car for the newness. I therefore presume I will look at buying a car that is 2-3 years old.

I will have enough savings to buy in cash if I want to.

Are there any reasons I shouldn’t just buy for cash? Can you even buy second hand on finance?

Obviously if the choice is x cash now or x loan on 0% finance I would take the loan and out the money in a bank account earning interest, but why would that be on offer? Isn’t it more likely that if I haggled to pay cash I would be offered a discount?