Need to get a new car, best way to finance

[RobustFlange]

Today we got the bad news that our car has died. We need another one asap, but really dont know how to go about paying for one. I was really lucky with the last one which was gifted to me by my mum in her will (also unlucky)

Anyway, my husband and I dont earn vast sums about £20k each. We dont have a mortgage, and I have about £30k in the bank (thanks mum).

Question is, should I buy outright? Or borrow? We only need one car, but I find parting with £20k is really going to hurt me (my husband has no savings to speak of). Its always been me who pays for the big stuff, and he uses the car more than me anyway. Any advice?

(I know I'm in a really fortunate position here with £30k and no debts, but please bear in mind that my mum died)

I would buy a modest car outright. No need to spend anything close to £20k on a car!

Your best bet in terms of value is a new-ish car (1 or 2yrs old) with low mileage. Something popular like a Ford Focus or a Honda would be cheaper to maintain.

Definitely don't buy a brand new car - that is just throwing money away in terms of depreciation.

Perfect advice from Getrid... less than £10k will get you a very good, reliable car of 3 years old or less, don't know why you're talking about loans and needing to spend £20k on one.

Why don't you lease a car. You can get deals where you pay one rental upfront £200?) amd then the monthly payments. Yes you don't own the car but you get a brand new car and just do the same thing every 3 or so years. I always finance my car this way. You can get deals with maintenance included so you know exactly how much to pay every month and no unexpected bills. I wouldn't consider buying a car outright, much rather have the money in the bank.

Isnt it better to have an asset rather than rent though? I agree that a 3 year old car for £10k or so is your best bet.

Myhandsareverycold - I'm thinking about leasing. Just because I have a feeling everything will be electric in a few years. So dont want to be left with a car that I can't sell.

With leasing, do you have to get every scratch fixed before returning the car? Ive not bothered with my own if I've scratched a wall or something. I've also heard that you can get tied into maintenance plans that are really pricey because you have to use the dealer?

Does it make sense to buy the car outright, then pay myself monthly what I would pay for a PCP? I'm getting hardly any interest on my savings, so is this a better way of using the money?

If you have the money sat there then I would buy upfront. No need to spend £20k on a car. You just need something basic, if you were using it more than I'd say treat yourself :)

I wouldn't lease unless you know your precise mileage and car isn't likely to get dinks which you have to repair.
You can pick up 3 year old fiestas which have been traded up under a PCP agreement and come wit a 6 month warranty from the dealer. Don't spend any more than that. If you must go bigger, then mondeos are circa £10k....only know as looked recently

You could consider getting a car that was top spec when it was brand new and buying about 8 years old. We did this with our Qashqai. It would have cost over £30k brand new but we got it for £3.5k and no problems so far. The most expensive cars hold their value the best and last longer I reckon.

You always need to approach cars from the perspective that they are are depreciating asset - their value will ultimately dwindle to £0 over a period of time. There's a really good article on Moneysavingexpert re: car financing - I'll copy it in a minute. I may be wrong but I reckon the most cost effective way of buying a car is to buy it second hand when depreciation has slowed. You can then decide how long you want to keep it for and work out what it will be worth when you sell it / trade it in again. The depreciation is the 'cost' of the car to you over the period of ownership.

www.moneysavingexpert.com/car-finance/

I always buy my cars, 2 or 3 years old and cars that their parts and repairs are cheap on. I choose 1.4 and 1.6 which go fast enough for motorways so petrol costs can be kept down. I manage to do quite some speed in a 1.4 ford.

Check what cars come up as reliable, honest John and what car reviews, rac and as websites all have loads of info.

You could spend as low as 8k for a 3 year old car with under 10k miles, if you shop around.

It will be cheaper long run to buy outright than to lease. You can re save your savings, after you have bought a car.

Also start a car fund so in 4 or 6 or 8 years, (that's up to you) you can replace the car.

I always estimate £100 a month to replace so based on current car cost of 7k after 4 years it is 7 years old and worth around 2-3k. The savings of £4800 mean I can sell my car (would not part exchange as they offer peanuts) then I have 6800-7800 to buy a new to me 3 year old car.

Doing this and budgeting for repairs, servicing, mot and road tax, motoring costs me £130 a month plus I own the asset. I then pay for insurance and petrol.

So its costs me less than a lease car but I have an asset I can sell if needed.

I also don't always save £100 a month as I sometimes spend it but having a 0% credit card helps here, in fact you could see what you could get with your credit rating, therefore leave your savings in the bank.

With leasing you do have to look after the car. Same principle as renting a house. If you damage that you need to fix it. It's a fair point too about mileage. Work out how many miles a year you will be doing as that will affect the price of the monthly rentals. Lots of leasing deals on electric cars too. The last time a bought a car I paid £11k for it but it was clearly a Friday afternoon job. I had so many problems with it, spent nearly £5k fixing it over the 4 years I had it, sold it for £4.5k. It was a top of the range golf. Doing the maths that was costing me £240 a month. I would have much preferred to have paid £200 a month for a brand new car with no problems!

It's personal choice. I need a reliable car for work as I travel far and wide every day and don't want to worry of my car breaking down or being in the garage.

Cars are depreciating assets and I learnt the hard way!

I'm lease through a fairly small local company. They definitely don't screw you on maintenance plans! PM me if you want more info.

Enjoy your new car whatever you decide.

I your situation I'd buy outright and look to spend 5-10k. I bought a 12 plate golf last year for 4.5k and it's absolutely perfect

Definitely don't buy a brand new car - that is just throwing money away in terms of depreciation.

Depends on how good you are at haggling. Certainly don't pay list prices or anything close. 4 years ago I bought a brand new Renault Scenic for £15k, as opposed to list price of £20k. There were ex-demos on the forecourt virtually identical for the same £15k. It was a no brainer to buy new. At certain times of the year, the dealers are desperate to sell brand new to hit their targets as they get retrospective bonuses per car based on numbers sold, so selling just one more car may mean they earn thousands more in bonuses. Don't be afraid to haggle and don't be afraid to walk away.

Of course, if you don't want a new or nearly new car, then ignore all that, but it is a myth that it always best to buy a "nearly" new compared with a brand new.

If you are buying new get one that’s been pre registered so this can knock thousands of the price
Myself I would probably lease and I do lease
If you lease have a few options of cars that you want along with colour and spec . Some you might get straight away others you might have to order it so it can take a few months
If leasing don’t go to the dealer you will pay thousands more
My husband leases a Mercedes SLC convertible he put down £1400 and pays £340 a month
In Mercedes they wanted almost £6000 deposit and £490 a month . Exactly the same car but someone has to pay for the free M&Ms and posh coffee 😂
If leasing I have used lings Cars. Ignore the crazy website. - she was on the Dragons Den and we have leased several cars from her with no problems

But if your buying get petrol / electric
The hatred against diesel cars means that you could easily end up paying to get in / out of your city or not allowed to drive a diesel car in certain areas some cities are trying to bring in diesel free areas which means if you have a diesel car you will be fucked