I need a reliable car but I can't afford to buy one outright

[Bananapancakes6]

We've just welcomed a new baby into our family and are now a family of 4. We are finding our little 2007 renault clio a bit small and it does have some issues so I think we'd be better off with an upgrade, however buying cars is new to me - I've only had one and that was a cash purchase after I passed my test. We can't afford to pay cash this time, but don't understand what would be the best may to proceed with paying monthly.

We can realistically only afford about £150 a month. Is that going to get us anything? It needs to be a good size family car.

The cheapest new car out there is a Dacia. Despite the age of your Clio you'd get a bit of trade in money.

Yes. There are a number of loan companies who will help.

Much cheaper than the dealerships.

What I've always done is aim to repay the car in 2 to 3 years.

If you could pay £150 a month for 3 years then depending on your credit rating you could get about £5k to buy a car.

The main problem is prices are v inflated right now.

Money saving expert would be a good place to ask this and you can view their recommendations on lenders

If you are willing to pay monthly and not own the car, PCP is great. Car Wow website is a brilliant comparison tool for what car you can get and is better than you would be offered in a dealership.

@Shouldbedoing I looked at these, but to get the monthly price to under £150 you have to pay a hefty deposit, which I can't afford.

I just got a bank loan when I bought my last one. Think i paid £113 a month for 4 years on a £5k loan. Rates are a bit lower now as well.

If you are willing to pay monthly and not own the car, PCP is great. Car Wow website is a brilliant comparison tool for what car you can get and is better than you would be offered in a dealership

my dd did this and had a 3 year old car on this scheme, as the car wasn't brand new it reduced the price considerably and was under £100 per month

perhaps though look at an electric Nissan Leaf, it maybe slightly over budget at around £180 - but you're fuel bills will decrease far more to more than offset that cost

But a Nissan leaf is tiny.

Op - I'm not convinced you can afford a bigger car. How much can you put towards it? How important is this in respect of what you spend the rest of your money on?

You can get PCP and Hire Purchase on older cars, you don't need to buy new. Something like a Ford Focus could be good to look at, big enough for a family, relatively cheap to run, usually affordable. PCP will be cheaper as you only pay back 2/3 of the car but HP gives you the freedom to buy an older thus cheaper car, you own it at the end too (as PCP usually still needs to be under 7 years old depending on the finance company, you have a balloon payment to pay at the end or trade it in- there will also be mileage limits to preserve). We've done both, both have worked well for us- if you go down the PCP route just make sure you fully understand it and your options down the line.

My main tip if buying with finance is to ensure you have Gap insurance, an insurance that will pay out for the gap between the car's value and the finance you take out. Don't buy it from the dealer, you can source it cheaper yourself, but you should buy it soon after buying the car.