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?

An awful lot of cars on the road are company cars, far more than people realise I think.
Mines on PCP but I get a car allowance for it. Again, this will be the norm for loads of people.

as I said up the thread or main car is pcp, however we have an older car 15plate which dh, myself and our two adult children in their 20’s drive. We purchased that outright as it was a cheaper car. To enable cheaper insurance and road tax .

@Caledoniadreaming we've never bought on finance before (always bought outright) but not so many deals for outright cash purchase anymore so we were thinking of doing what you have done.

Do you happen to know if paying finance off straight away (within a couple of days) is something commonly accepted by dealerships now? And have ever had any problems doing that? Thank you 😊

Last car bought on finance at 0% interest then bought it outright at end of 3 years!

First was second hand, second was outright. Not sure what we'll do for the third but need to start thinking of it in the next year or 2! Probably outright if we can manage to buy what we want.

Bought ours from a second hand dealership for a few grand.

Never owned a new car and would like to consider leasing for next one, but DH seems set against leasing for some reason. We'll need to think about this as we've had current car for nearly 10 years and it is only one minor prang from being a write-off now.

We buy ours new or nearly new ( year or less) outright .

A third trade in, a third savings and a third 0% credit card over 2 years. Was about 14k though not 40k!

I've never bought off finance. But I don't much bother about having new or fancy cars. My car is 6 years old, second hand and a Kia. It cost £6 k and does everything I need. Debt of any sort makes me anxious- although I am prepared to overlook that for my mortgage!

My favourite colleague / friend at work has a different approach and situation in life. She is currently paying more per month than my mortgage for a very fancy car - that's what she told us anyway when (rather rudely) pressed on it by the boss. I think he was wondering how she could afford it as she's only on £34k. But she's mortgage free as lives with her mum so probably thinks why not? So we have totally different approaches.

Yes this

Mine is above the highest bracket you mention, I traded in my whllly own previous one, paid the remaining half in cash took finance for the rest.

edit it was a couple of years old when I bought it, I don’t buy new cars.

my husbands is lease as it’s via his company.

We always buy with trade in plus cash. However never bought a new car, always a year or two old, low mileage but expensive. This means the largest chunk of devaluation has taken place, but they are still valuable assets. In the last 20 years or so VW/BMW/Mini/Jaguars. Also a vintage MGB, eventually sold for profit!

I'm still running a 2009 Kia Picanto that I bought for £4000 through the scrappage scheme. So after 15 years that makes the cost about £270 a year and I expect the car to be fine for years to come. It's tax is about £3 each month and it has had minimal repair or maintenance costs perhaps 1-2k over it's lifespan.

I bought it on a credit card that I immediately switched to a 0% finance offer.

If I had paid £250 monthly for a car I would have paid 45k over these 15 years. £500 a month would have been £90k!

I have zero interest in cars. If it runs well, is safe, big enough then that's fine. The thought of spending even £5 or £10k on a car is a bit 🤢 for me. The thought of having any kind of monthly payment is double 🤢🤢

Our current car is a Zafira. Bought privately (after a LOT of research into car history etc and thorough check by dh who's very handy with cars) 2 years ago for £1500. Old (11 years old when bought), solid, decent bodywork and interiors, good service history, runs like a dream and has flown through both MOTs since. We'll run it until it dies..hopefully for a good few more years yet...and then buy another similar type car, hopefully for £3k or under.

Dh likes cars and would happily drive a new or much nicer car. But (same as me) he would also far rather keep that money in the bank for things that will improve our lives far more than having a fancy car outside. It's just a bit more of an emotional struggle for him 😂

Depends on the finance deal...

We have previously paid cash for low mileage but not very old secondhand cars. We keep them for at least 10 years or more. DH is mechanically trained so keep the mechanics up to scratch, we look after our cars and they last for years but only really need routine stuff doing like tyres, filters and oil, and the timing belt. Last one we bought was less than 2 years old, and we bought it in 2016. DH is just starting to research what to replace it with - it's a bit higher milage than other cars we've had due to having to look after sick relatives at a distance, so far have done 112k miles in it, yet our other car has been in the family from new and is 25 years old yet hasn't even done 90k miles so far.

Guarantee can you?

Well you'd be wrong then. We usually buy outright. Although we have been known to buy in contract if it's zero interest because it makes financial sense to keep cash and invest for interest rather than pay upfront.

Not at all. If it's a zero interest finance contract then you are smarter not to buy upfront. Invest your cash. Get interest on it and pay the car off in instalments.
It's not about not having the money or living beyond your means.
It's called making your money work for you.

We bought our (second hand) car on finance 5 years ago, and paid it off as quickly as we could.

I’ve been saving a lot since then, to buy outright the next time. I’m hoping to keep this car for another 5 years or so.

I think I was nearly 30 when I realised that most people bought their cars with finance. I used to always wonder how on earth people could afford flashy or even any car. I genuinely had no idea!

Well yes, that was exactly my point.

We always buy outright as it's cheaper. Normally around 3 years old although recently we bought a brand new one (electric - we got £7k off which made it worthwhile). If I had to have a car on HP I'd go for reliable but low spec to keep the cost down.

Actually it’s the opposite, over 38 million cars with only 700k people in receipt of any form of car benefit. It’s a tiny percentage/

I've done every option at some point.

First car was bought outright but it was a cheap old banger.

When I got my first 'proper' job I needed something more reliable as I was going to be doing a lot of miles but was still earning peanuts so got a PCP for a 4 year old car at £121 p/m.

By the end of that deal I was earning a bit more (but still not enough to be able to save to buy outright) so I handed it back and bought a new car on HP which was about £160 a month for a similar car.

Then once that was paid off I was able to save what I had been paying monthly all those years into my 'car fund' so when I eventually traded that in I had enough to add to that to mean I could start to buy outright which is what I have done since.

These threads always massively favour buying outright but it's not always that simple, and whilst buying outright is also now always my own preference there is nothing wrong with PCP/HP if that is what you need to do at that time.

But in answer to the OP, yes lots of people do have big cars on finance but also lots don't...there is also always the option to increase the mileage on say a PCP, the quoted monthly payments are just based on low mileage to look cheaper. It's really personal preference how you do it.

Outright, cost us about 18k second hand, but we only share one car and wanted something a decent size and make and hopefully reliable.

Our nice big, quite luxurious car was bought outright. We’ve always bought outright. We save constantly and then when we are ready to change the car (usually when it’s around 5 years old) we get a new one using the trade in value and the savings. They often try to get us to use finance saying they can knock a bit off the price (because they get kickback from the loan people) but we live by the “if you can’t afford it you can’t have it” principle (we did have a mortgage for the house though).