To think buying a used car outright is not always best?

Ellielelephant · 2023-02-22T14:15:46+00:00

This seems to be touted as the only way to buy on MN. And by my DH who seems to think I’m very frivolous and / or a bit mad. I’m not amazing with finance and numbers so am genuinely interested to learn or proven wrong here. For me, I am quite into cars. I like having a new-ish luxury car, with good interior and features/gadgets. I change my car every few years. I also have small children, a busy job and lifestyle, regular long journeys and want it all to be taken care of as much as possible. So for me, I believe buying second hand outright is not necessarily the best deal. I get a monthly car allowance with work which I spend. Am I right?

UsingChangeofName · 22/02/2023 14:19

Well, nothing is "always right" for "everyone".

Buying old, cheap cars has served me very, very well over the last 40+ year, but if it doesn't suit what you want to do, and think is best for you, then don't.

I don't see it touted as being the only way to buy, on here either.

Moonlightsonatas · 22/02/2023 14:21

Most people, I would say, don’t get a car allowance from work.

Original poster

Ellielelephant · 22/02/2023 14:22

I think that fundamentally I’m not bothered about the idea of ‘owning’ the car. Because I know I’ll want to change it within 3 years and am not really interested in buying it at the end etc.

I definitely get the sense that PCP is looked down upon…maybe it is if you’re thinking in purely financial terms, but if you like cars it’s not a purely financial decision really!

OP posts:

GoodChat · 22/02/2023 14:23

I personally think spending a monthly car allowance completely on the car is daft if you don't have a decent amount of disposable income

SomeCommonThing · 22/02/2023 14:26

Works differently for everyone. Also hugely depends on the car.
Some people will say they've always bought older used vehicles and never had any issues, others will have bought older cars that have been riddled with problems the seller didn't tell them about/aren't noticeable by looking or test driving.

I'm one of those lucky people who got a used car on finance from a reputable dealer and it immediately needed a cam belt doing. 🙄

I think aswell the assumption that because you are into cars means you'll want a new one every 3 years is a bit daft.
I'm very into cars, and currently drive a sporty diesel pump that handles like a dream. I'm not getting rid of her because nothing I can PCP is going to hit all the points I want like she does

rickandmorts · 22/02/2023 14:26

Strange thread. What's right for you won't be right for everyone? I have a very low monthly income, no car allowance from work, 2 filthy dogs and a baby. It would be ridiculous for me to spend a lot on PCP every month for a fancy new car. I drive a 9 year old Golf that I bought outright and is suited to my needs.

Wafflefudge · 22/02/2023 14:27

The only time I see this advice is where people are struggling with their budget but are committed to hundreds of pounds monthly payment for their vehicle.
I prefer to pay upfront for things as then if for whatever reason my income drops or expenses go up I'm not stuck with payments I can no longer afford. That I think is why most people recommend it. Sure I'd like a nicer car than I have but I'd rather have the safety net of not having a big financial commitment hanging over me.

pawz · 22/02/2023 14:29

I like having cars on finance!

Costs me less in the long run, I can hand the car back at the end and it's always within warranty so doesn't cost me much to maintain, servicing packages I normally get thrown in too so it's all good from my end.

Everanewbie · 22/02/2023 14:30

Hi OP. 100% agree. Nearly new cars are horrifically expensive and poor value at the moment. Often, finance deals such as deposit contributions and low interest rates make this more attractive. A couple of years ago leasing companies offered deals that actually beat the depreciation of the vehicle, so if you were flexible on colour/trim levels etc. this was a far better option than outright purchase.

Ultimately, a buyer needs to establish what is right for them and what deals are available at that time.

AspiringMermaid · 22/02/2023 14:39

I love my pcp, 0% interest on toyota with 10 year warranty. I'm a nervous driver and really value the safety features, I wouldn't have been able to afford them otherwise. Planning to pay the 9k final payment, then selling/trading it in for another pcp on my dream car and will keep that one long term. Finance not for everyone but works for me!

Summerbreeze111 · 22/02/2023 14:47

What car are you driving and how much is it costing you roughly a month? Have you been impacted by the interest rate rises at all?

I am interested in the answers here too, as I've always purchased cars and tried to use them for as long as possible but I need a new car soon for a growing family and I am also weighing up my options.

So for comparison I have a

2012 mini
45,000 mileage
Purchased 8 years ago for 7k (did a 4 year loan, low interest rate for around £100 a month) so not including maintenance, the car so far has cost me approx £72.00 a month
It will last me another year until I upgrade, so if that's 9 years it would cost me approx £64 a month if I were to break it down that way. I know I could not get a deal like that if I were to lease/pcp a car, albeit it would be a newer car, but from the quotes I have been looking at, I've been quoted around £300 a month. At the moment as the car was paid off years ago its costing me £0, unless any maintenance issues arise during my next MOT.

Generally maintenance hasn't been considerable, at the very most it's cost me no more than £3k over that period of time.

MRSDoos · 22/02/2023 14:50

Well you are being unreasonable but you’re also not being unreasonable. That’s because everyone’s budgets are different and what works best for some doesn’t work best for others.

I’d rather not pay monthly for a car, so I bought mine outright “used” car. Nothing fancy, because I’m not really a car person.

Someone who likes having a nice car, happy to pay monthly (and can afford it) and likes the idea of being able to have a nice new car every few years? Yes I think it’s a good idea for those people.

I will say there are pros and cons. My car I just paid for outright I bought from a private seller and they didn’t tell me there was an issue with dashboard sensors so I just had to pay a few hundred out for that about a week after a bought it! You probably wouldn’t have that issue with a new car haha

AdelaideRo · 22/02/2023 14:52

You have to do what is right for you.

I like a nice car but don't mind if it gets old (as I look after them and what I thought was nice when it was new generally stays nice). I have a reliable local garage for servicing etc.

So I buy new / or nearly new and keep for ages.... my petrolhead brother does the same except he has more than one car.

weightymatters73 · 22/02/2023 15:02

Depends what and how you do it.... I look out for "deals" on leasing sites and usually pick up some amazingly low prices/special offers on various new cars - far lower than you would buy second hand with all associated depreciation and repairs and maintenance.

New cars are often under warranty for the duration of the lease, occasionally they need tyres. Last deal included all maintenance for an additional £5 per month and I have already had a new tyre (puncture).

kegofcoffee · 22/02/2023 15:05

If you get an allowance and you can only use it against a new car then, yes obviously it makes sense to use it.

But most people don't get a car allowance from work.

If I had £10k for a car I'd always spend it on buying a decent quality second hand car outright. Rather than using it for a deposit on a new car of the same spec, then have to spend ££££ each month on top.

Especially with how interest rates and waiting lists for new cars are at the moment .

Hellsmovie · 22/02/2023 15:13

SomeCommonThing · 22/02/2023 14:26

Works differently for everyone. Also hugely depends on the car.
Some people will say they've always bought older used vehicles and never had any issues, others will have bought older cars that have been riddled with problems the seller didn't tell them about/aren't noticeable by looking or test driving.

I'm one of those lucky people who got a used car on finance from a reputable dealer and it immediately needed a cam belt doing. 🙄

I think aswell the assumption that because you are into cars means you'll want a new one every 3 years is a bit daft.
I'm very into cars, and currently drive a sporty diesel pump that handles like a dream. I'm not getting rid of her because nothing I can PCP is going to hit all the points I want like she does

I'm one of those lucky people who got a used car on finance from a reputable dealer and it immediately needed a cam belt doing. 🙄

can you give more details on that? * *

KupoNutCoffee · 22/02/2023 15:41

How you buy, lease or otherwise finance a car should be done on personal budget, and circumstances.

I do get the frustration with some people who claim its always better to buy outright, won't hear anything to the contrary and you're getting ripped off/bit dim/made of money/can't really afford it if you claim otherwise.

These people seem to avoid looking at the person, their needs and what they actually want.

Whereas actually there is argument for the opposite in many cases. Pcp and leasing is great if you like to change regularly and are honest with how much usage the car will get. If you want/need a reliable car getting finance can be a good way of accessing a better car than you budget allows or avoiding large unexpected costs on a old car, through paying, perhaps a slight premium for a new car with a warranty and service plan.

And it's also just wants...no it might not be the most cost effective option to buy from new, pcp, lease or whatever. But it's a valid want, to pay for a nicer model, the 'first owner' feeling, convenience, etc. Like you know, choosing a phone...I could buy my handset outright, or trade it in yearly.

Original poster

Ellielelephant · 22/02/2023 15:57

@KupoNutCoffee exactly

OP posts:

Puccini1900 · 22/02/2023 16:04

BBC Moneybox covered this issue a couple of years ago.

They said - because cars are a depreciating asset, the most financially savvy thing to do is to buy(/rent) them on finance - especially if you prefer a new car with all its guarantees.

(This doesn't apply to those of us who drive around in 9 year old, 3rd hand cars)

countrygirl99 · 22/02/2023 16:11

My car always ends up smelling like a stable with bits of hay that no hoover can remove from the carpets so no point in me paying for a new car. And there's usually only me or a si.ilarly horsey friend in it. If I was regularly doing long motor way drives, giving lifts to non horse smelling people and kept a pristine car I might think differently.

CeciliaMars · 22/02/2023 18:16

The only time we did PCP, we had a brand new Nissan X-trail. Put a £7000 deposit back - that would never be seen again. £300 a month in payments. The clutch completely broke within 18 months. At first I didn't panic and just thought - aha, this is why we have PCP - they will fix it. Nope -they claimed it was general wear and tear, and it costs us over £1000. I was livid. They claimed we'd been driving it badly - I've driven every other car in my life the same way!
When we eventually wanted to get out of the PCP, they charged us hundreds to fix the few small scratches that are inevitable with a family car, then hundreds more as we'd gone over our mileage allowance. I worked out that over the 2 years, we'd paid approximately £19,000 for a car we didn't even own.
I now have an old banger that I paid £2500 for. No monthly payments. I own it. Don't care if I scratch it. I might not look posh but I'm never doing PCP again!