To think newer cars can be cheaper overall

[forsythg]

Hear me out.

My car has been in the garage countless times for car repairs over the last few years for my 10 year old 1.2l motor. Random faults, like needed a whole new computer unit as the electrics have got a bit confused, down to more expensive mechanical parts. It’s a city car, really, not designed for long distances. It’s done short of 45k miles and I am only the second owner, if it does 6,000 a year that’s all it does. It’s wear and tear related stuff and some random issues too along the way.

I could ‘afford’ a newer car with a bank loan, paying back £200 ish a month. Surely this is peace of mind that there won’t be any wear and tear, so should limit the amount of times in the garage? I have always tried to live humbly and own a cheap car outright as I think this is fundamentally better than being in debt. That said, I use my car more and more for work and will be doing especially as we start a family, I want something reliable that can be trusted.

I hate the uncertainty of things going wrong currently and don’t have much faith in my car. AIBU to think there’s some savings to be had with a new car despite the monthly outgoing?

Just get a Toyota. Bought mine at 3 years old at low mileage and it's been running flawlessly for 20-odd years. Routine maintenance all along, plus had to replace brake pads every so often (all that economical preventative driving wears them out!) but nothing else major until last year, and absolutely no incidents en route. Haven't checked reliability stats in a while but wouldn't be surprised to see them still on top.

The thing about this debate, is that new cars bought on lease or PCP don’t require full payment upfront.

The main reason why people buy lease cars and PCP cars is that they can’t afford to pay up front for a new car. Many people also fear paying for maintenance (this is standard replacement of parts….not due to mechanical breakdown) of a couple of hundred for standard servicing or perhaps four hundred every couple of years for replacement of a cam belt or tyres etc.

Because people can’t afford the upfront payment and are frightened by surprise costs due to limited savings (fears which are built upon by new car sellers and leasers) a fixed monthly payment, possibly including payments is attractive. It is usually more expensive than buying a car outright and driving it for multiple years.

The reality is many people have no choice but to lease or get a loan or PCP as they don’t have upfront cash. No car seller or offered if loans wants to sell their product as ‘for those who can’t afford to buy upfront’ so instead sell as ‘for those who deserve new and value reliability’ - these lease deals keep the new marketing going.

One of the reasons why people can’t afford to buy a replacement car upfront, or need to buy in lease, or payment scheme for a sofa or help to buy for a flat, or phone, is their regular monthly payments of new items take all their money and prevent them building savings and owning outright. They move from one lease deal to another to another. So yes, they always a new ir nearly new product and don’t have worries about paying for maintenance if old cars or houses, but they pay through the nose for it.

Those with savings often buy upfront. That could be a new item or it could be a rellly good value 2 year old car bought upfront. It could be run for 6-10 years or lomger perfectly well with just standard servicing and replacement of items which are on the servicing schedule. And the total expenditure of 6-10 years mortoung will have been less than the equivalent years on a lease.

BUT of course you have to get to the point where you have £5k or £8k or £15k or whatever you need upfront. You have to know that you have £800 in the bank that you can draw upon if something happened to the car and you’ve budgeted several hundred a year for servicing and consumables. And even people. Who earn good money seem to struggle to save several thousand and to keep that buffer if money in their account. And those lease companies rely on that for their business and also telling people it’s cheaper to lease and anything other than a new car cannot be relied upon and will cost you more.