Can you tell me about your car payments

[theserpentine]

The time has come for me to bite the bullet and admit defeat where my car is concerned. I need to get a new one.

I paid my first car in cash (6 years old) and it lasted me nearly 8 years.

I have a small loan for my current car - £90 a month for 36 months, and still have £1360 outstanding.

Next loan will need to be bigger as looking for something newer - ideally no older than a 2020 plate.

Just wondering what term people tend to take car loans over? I hate the idea of having it hanging over me for 4/5 years, when unpaid that first one in cash, but is that just quite normal these days?

I really don’t want PCP.

I don't like PCP either but nowadays it seems that is where the deals are. Get your written settlement figure. Car sales factor settlement figures in your existing cars "value". Factor in what payments you can afford.
With PCP when it's time to hand back car you can always keep it and get another loan from a suitable financial institution as long as it is still in good condition.
You don't say what type of car you need but also think about cars reliability, websites like What car? or Honest John will give you an idea about what used cars to go for.
Don't believe anything sales folk tell you. Be ready to walk away no car deal is that good that you can't think about it away from any pressure. Even if you don't have a partner, get a friend to pretend to be, the other half, to go along with you as our voice of reason.

I took hire purchase over five years in a similar sounding situation to you. I also wanted to avoid PCP, my criteria was under two years old/less than 20000 miles. It was fine, obviously not ideal to be paying all that interest, but I preferred that over gambling on a cheap car.

I honestly would consider your options for buying a decent car without (much) finance. We got a new (ish) car in 2021 (it was a 20 plate but had been driven by someone at the dealership HQ for 6 months, then they replace them apparently and sell the old ones on. £300 a month PCP. Thought getting a nicer newer car would mean less hassle and fewer repairs. Nope. It’s been a bloody PITA. Cost me £4000 in repairs last year alone, none of it covered under warranty. It didn’t break any less than my much older cars previously, but was much more expensive to repair. I’ve just sold it and used the settlement to buy a 2011 model in cash outright, which I’m very happy with.

I just got a bank loan over 5 years. You don’t have to pay it over 5 years if that’s a concern for you. I put money in a separate pot each month and then did a final payment after about 36 months but the monthly payment for 36 months would have been a bit steep if I “had” to pay it.

I wouldn’t consider anything other than a bank loan having worked in car finance.

It is usually cheaper to get a loan. Apr on car finance is often 20%+, you should be able to do better than that.

I've always bought cars outright for cash, usually about 4 years old and I'd keep it 8-10 years until pretty much worthless. Used cars are so expensive now though, price has gone up much faster than my salary.

Pretty much everyone I know has pcp, treat is as hiring a car. It is good to have known costs.

Thanks everyone.

Sorry, should have been clearer. I did mean a bank loan.

Was aiming to put down about 6.5k deposit and take another 3.5-4k loan over 3 years, but now thinking if I take a 4 year loan, I can get something just a little bit more, with the aim to do what PP did and pay off earlier.

i just don’t want to be in a cycle of PCP and the car never be mine. Would like a few years out of it at the other end with no payment, in an ideal world.

Following

What amount of disposable income would you all say you need to PCP a car over £700 monthly?

I’ve always bought cars cash. But the next one I want a nicer one.
disposable income is currently £2k monthly

I’m hoping not to pay more than £130 a month loan payment from my otherwise disposable income of about £1300, if that helps