What's the best way to buy a car?

[sleepyhead]

I've never owned a car that cost more than £4,000. I buy relatively old secondhand cars and drive them until they're no longer economical to fix, generally getting 6 years+ out of them (I've been very lucky to never have had a really pricey repair so I've actually only owned 3 cars).

Our current car is 13 years old, owned it for 7 and realistically getting to the point that the balance between repair and get rid is falling ever more on the side of get rid. It owes us nothing and has been a great car (sailed through its last MOT), but that's the reality when you drive an old bog-standard vehicle.

The thing is, we're now in a much better financial position then when we last were looking at cars. We could even probably stretch to a new one(!) but I'd probably be looking at something that's maybe 3 years old - I'm really not fussed about a new car as such, and I know it's done a big chunk of depreciation at that point.

Am I looking at this wrong though? Should I be getting into the merry-go-round of trading in and buying a car every 3 years?

And what's the best way to finance a purchase like this (either new or relatively new) - loan? PCP?

I'd be looking at something like a Hyundai i30, so around £10k for a 2018 plate.

Any advice or links to good guides would be appreciated - our car may go on a bit longer so I'm in no rush, but I'm trying to see what our options might be.

We are like you.Always second hand and paid in cash. We are also in a better financial position and thinking to upgrade our 2004 Ford in the next couple of years. We don't believe leasing is a good choice for us as we don't care about having a new model every 3 years. We will be looking to spend around £15K for an hybrid and can realistically put down £10K in cash and cover the rest with a bank loan as the interest are low at the moment.

Thanks - yes, I wonder if we'll ever be the sort of people who swap cars every few years so maybe a loan is the way to go - rates are very good.

I like the idea of a hybrid but we're in a flat so charging points will have to be sorted before we can go electric. Maybe the next one!

I've also looked at car clubs - I don't commute by car so it's a possibility along with hiring something nice for longer journeys.

I traded in my old 09 Corsa for £1k and got a loan over 4 years from Admiral for a 2-year old Focus Titanium. Works out at £200 a month, and I’ll have a 6-year old cat at the end of it that I’ll keep for another 4 years. Really didn’t want to go down the PCP or dealer finance route.

Just to say that if you can get a cheaper price for the car on a PCP basis just go for it, you can then pay it off within 7 days without penalty.
I got my last new car for £1500 less than the cheapest cash price I could find. The salesman even showed me how to get in touch to pay it off the next day. I got a bank loan for the balance after my trade in and paid that off very quickly with extra payments.

OP, this is a good starting point: www.moneysavingexpert.com/car-finance/

In general, if you have good credit history, a personal loan is cheaper than any sort of finance you get through the dealers, and is also more flexible: the car is yours, no penalties if you use it for more than x miles, etc.

A PCP where you hand the vehicle back every 3 years is always an expensive option, which makes very little sense if you can afford a personal loan , unless you are absolutely keen on replacing the vehicle every 3 years.

It could make sense for very rare vehicles which are hard to sell - but think more a unique motorcycle than a bog-standard car

Thanks for all the comments - this is very useful!

I don't think we'd get much of a trade in for our poor old bashed about 2008 Nissan, but I guess you never know, especially if they want your business - I got £50 for my last car - I'd have happily left it on the forecourt for free to save the journey to the scrapyard

Using your own money and buying outright for a few k is the cheapest way. And also means you won't get a chunky newer car full of useless fragile gadgets. Obviously you could get a pricey fix but if you know your stuff and read the history and reviews, you can reduce the chances. Honest John is quite good for info.

There is a reason that car dealers are so keen on finance - it's where the money is.

Diesels and automatics have the most problems, just read those reviews. You won't get an electric car for under 20k, and at that price it will be something that you put on rather than get into.

Yes, definitely not in the market for a diesel or an automatic.

I do like the look of the Hyundai i30 - but that's partly because it's what my choice would have been 7 years ago and we couldn't afford it then, so I shouldn't get hung up on a particular model.

It is of course very subjective, but we found the convenience of an automatic life-changing! Just don't rubbish it until/unless you have tried

I have a 2007 automatic Micra. I bought it when it was two years old and there's never been a thing wrong with it. I've had to replace the wiper blades and a lightbulb and that's been about it. It's an amazing car and I expect to have it for a few more years yet.

If you want a new (nearly new) one all the time (i.e. change every say 3 years), then buying a demo outright or getting a leased car (PCP) is the "cheapest" way to do it.

BUT, it's not the "cheapest" way of owning a car if you don't mind running it for longer, say 5-10 years, where getting a demo or low mileage used car (1-3 years old) saves you suffering the initial depreciation, and if you don't have money to pay, then HP or bank loan is the answer rather than a lease.

Thing with leases is that you never actually own the car, so you're stuck with paying £200-£400 or whatever for ever more. Whereas with a loan or HP, you pay for the duration of the loan and the car is then yours to keep (not paying anything monthly) for the next several years.

So, if vanity matters (i.e. better make or always new/nearly new), then lease is the way, but otherwise, buy something nearly new, pay it off over 2/3 years and then keep it for several years.

You might be surprised about the trade in if you go to a main dealer. The guy I dealt with had been instructed to get rid of the old model Ford Focus’s ASAP as the new models were coming out, so offered £1k straight away. I wasn’t bothered about having the latest model - the car I got was a really high spec, and the few differences between mine and the new model is the grill, a slightly different shape, and a different look to the badge, as far as I can see. It’s now been two years and I still love my car...

Why don't you just carry on buying the type of cars that you always have? The problem with newer cars at the moment is that technology is moving on at such a pace that things become obsolete/dated v quickly. Why not bank the money for a while and sit tight until you are in a house/have charging facilities and then see what the electric options are.