How did you buy your car?

[lewiscapaldi]

We're a family of three, almost 1yo baby. Driving one 2010 Focus which is increasingly unreliable.

Today the car battery packed in and I started thinking about other options. It's so cramped in there with the toddler car seat and it has no parking sensors, Bluetooth or anything like that.

My question is, how did you/do you fund your car purchase, what is it, and are you happy with it?

Husband is reluctant to consider financing anything and thinks we should continue running this into the ground. And he may well be right, but it's mainly my baby I'm thinking of now. I don't want anything fancy or new - at all - but would love something with parking sensors and potentially would be open to hybrid/or even electric.

It's just such a BIG purchase! Interested to hear about what your setup is!

I had my car on pcp in April 2019. It was a 2.5year old Peugeot 2008, with 12k mileage. I had it on PCP for 4 years at £190pm The PCP was due to expire next month, but I realised how high car prices (my car has only depreciated by £1.5k) are at the mo, so i decided to buy it with a personal loan. The balloon payment was £4k but it needed a bit of work, so I took out a personal loan for £5k. It's costing me £160pm for the next 3yrs and then I'll own the car outright. I may decide to sell or keep it then, depending on how thing are financially and how the car is mechanically at the time.

I loved my old car- had bought him 2nd hand cash 8 years previously- but he literally did die in the middle of the street when the gearbox totally burst.

I was tired of paying repairs, so against what I'd always done I went for PCP. I've had the brand new one (Skoda Kamiq) 18 months and I love it. I pay £190 a month, which o think is really reasonable. I'll probably pay the balloon payment in another 18 months.

DH has 2 modern classic cars which take up enough time and effort, 🙄 and we have an old camper van (which I totally adore) so I've been delighted with the trouble free element of this arrangement.

I did the same. In fact I'm on my 3rd battery in 13 years. Way cheaper than buying a new car and only cost about £110.

Our rule is when a repair costs more than the car is worth we part ex and buy another second hand. We usually go for 5 years old and under 50k miles. We’re current running two 10 year old cars - one large family car and a little runaround. They cost us 8k in total. Both in great condition.

Apart from the company car bit this is my system too. I never have a new car but I'm happy to drive a second hand car. Had my last car for about twelve years and hope the current car will last for another few years. I save £125 a month into premium bonds, as the amount clocks up I feel relieved that if I had to get another car then the funds are there.

We buy new and pay cash. Have a Toyota self-charging hybrid that is worth pretty much what we bought it for a couple of years ago. Has a 10 year warranty plus 15 on the battery! Will keep until charging infrastructure is more widespread and then possibly change to electric. My city car is 4 also paid cash and has under 15k on the clock as I don’t use it much but need a car as public transport not regular enough in our area. With all our vehicles we always have them serviced on time and run them into the ground but might make an exception for the Toyota!

I pay £290 monthly for a 1 year old car on pcp and borrowed £5k from family as a deposit.

It feels a lot but prior to that I was driving a 21 year old car which I was running into the ground as I couldn't afford a car.

It was costing so much to repair, in fuel and was frankly unsafe. When the engine started smoking and it stopped on the M25 when I was driving with my 3 year old I ended up waiting 4 hours on the side for the RAC in the freezing cold in winter. My 3 year old was a runner and it was all I could do to stop him running down the verge.

I realised paying money on finance which is the only way I could afford a car, would be worth it simply for peace of mind.

The way I see it I only need to own a car outright when I retire. As long as I'm working making the monthly payments is manageable.

We got a 0% credit card, traded in one car and used the credit card for what was left.

We have had two family cars so far. We buy second hand and then use them until they are not financially viable to run anymore. Our last car lasted from 2010 to 2022. DH found it at a dealers somewhere fairly rural. Our latest car was bought from a mum at school. It was second hand and fairly old but low mileage (was above board had all the paperwork and history, just had seen little use). It is a 7-seater Ford Smax and is just what we needed with growing boys and a Grandma who is increasingly nervous about driving her own car any distance when we go away together.

This is true. Mine conked out before I was ready to buy meaning I spent 6 months relying on my bike and public transport when I live somewhere that has poor public transport. While I could cycle to work and nursery my son missed out on birthday parties, I had to cancel his clubs and I didn't see family for a while as they live far away.

Forgot to say, we buy them outright.

I bought a 3 year old sportage and paid 11.5k for it. Put 6k down from savings then got the remainder on 0% finance for 3 years. It's now 6 years old and only 45k on mileage so no plans to replace.

Yeah I agree it’s a bit OTT but we don’t have any other outgoings or debt so I kind of feel it’s ok?!! Perhaps not.

We live very rurally so needed a 4x4 and even a Ford ranger was coming in around 50k!

If we had a big mortgage then it would be different and I would still be driving my 11k Ford.

It depends what your goal is and also if you have savings in the bank or access to a loan.

For people who want to do motoring as cheaply as possible over the long term, buying a car that is between 3 and 5 years old with cash and running it for 10 years or until it costs more to repair than it’s worth, this will probably be the cheapest total cost of motoring over 10 years.

Lots of people don’t have cash to buy upfront. They can’t afford to go for the cheapest overall motoring but have to look at monthly payments. That could be a loan for buying outright or it could be a finance deal such as PCP or leasing. People who get a loan from a cheaper source of credit and then keep the car behind the loan previous will have cheaper overall motoring than those who always return the car and have another finance agreement.

Many people point to not bearing depreciation or having to pay substantial repair bills as a reason to lease. These are big fears for people with no or small savings behind them, but less so for those who have some cash….and coughing up as required is generally cheaper overall.

So many people do t actually have much choice about how they buy a car. They haven’t got the money to buy upfront and even with a loan, they fear they haven’t got the money to cover repair bills. They basically can’t afford an element of uncertainty.

Leasing and PCP removes uncertainty about future spends and is usually affordable on a month by month basis for those who don’t have savings. But of course you pay for this certainty by over time paying more. It’s always the way that when you require credit, you end up paying more.

So many people these days can’t face any unknown spends. They can’t and don’t build up any savings because all their money is going on paying mi they payments for various things. And because they can’t buy outright, they continue to buy on monthly payments which cost more and keep them from being able to save. It’s a cycle and over the years and various different purchases for many, costs them thousands. The cycle can be broken, but it’s not easy.

We have 2 cars in the family. We buy at around 3 years old and then drive them until they will cost more to repair than they are worth. We pay outright from savings and have usually traded in the old one.

There usually comes a point when the car goes for an MOT and needs a lot of work and so we decide to sell, or in the more distant past, would break down. We could manage while we found another one, because we still had one running car. The internet makes finding and getting a new second hand car pretty easy, so you can have a replacement in a few days if you need one.

We aren’t phased by paying for services, replacing tyres and the general maintenance that comes with keeping a car running, such as replacing cam belts. That’s because we have money in the bank and expect to have to pay for those things. We know it’s cheaper than if we were paying large sums every month for leasing or PCP.

With some cars we’ve had 7 years out of them and with others it’s been 12 years from the 3 year age we bought them. In that sense, some are cheaper per year than others and that’s fine too. You win some more than others. However, we expect to be motoring with each car costing us no more than about £1800 per year. Yes, often we are driving an older car, but they are fully serviced and decent and we simply need reliability for a cheap overall price…and this gives us that.

We bought our mini on pcp finance in 2016 and it was £240 ish a month. The balloon payment was £8k and we paid for that out of DH' bonus. It's only done 20k miles soni think we will have it a long time yet.

Out other car we bought for 32k when it was 9 months old. New price was nearer £50k .

We put £20k down and put the remaining £12k on a 0% credit card which we pay off at £525 a month so about another year and it'll be clear.

The offer from the dealer was cheaper on the monthly but the interest rate was really high and we would have paid it for a few years and still had a balloon payment.

We've been lucky that we had cash but otherwise you can get caught in a loop of pcps and leases.

My sister nearly traded her car in for a new PCP deal and then or here PCP but actually took a bank loan out to pay the balloon. Her car is now 7 years old and she's about to pay of the loan. She owns the car and no more payments!!

You were lucky @Blankscreen to be able to put it on a credit card, I have tried doing that with both a car and a caravan in the last 5 years and was only able to put about £1k or 2k towards it, I wanted to pay on CC, my limit is about £12k, to get the points but wasn't able to, when I looked into it it seemed quite common to not allow this for car purchases. Maybe it's different now.

We recently bought a new car. We traded in the old one, put in £3000 cash and stuck £10,000 in a 0%, 2 year credit card. We've cut up the card and will pay £450 a month for two years.

Like pp I got a three year old car, paid for mostly with a bank loan for four years at about 3 percent interest.

You can just get a 0% money transfer off a credit card.

Finance but always the one where we own it at the end (so loan essentially).
I still have and run the car I financed around 8 years ago and it's used as a run around (still in good enough condition though) and then we financed a new one when we became pregnant so we had a safe and reliable car for baby

Not everyone can afford to buy outright and often the need for a car outweighs being able to save long enough. It's hard financially as it is right now - we cope better having the bill monthly than trying to save it up

There's nothing to be frowned about by financing a car. Same with buying outright. You do what's best for you and can afford

We took out a loan, we also need a new boiler so combined the two. The loan is £7000 and taken over 3 years, fingers crossed the car lasts longer than that.
This is the first loan we've had for a car, usually we have paid no more than £1500 cash.

I bought a 4K pcp car. Paid the final balloon payment and plan to run it into the ground and get my monies worth out of it. I will drive that car until mechanic says it's unroadworthy. But I have lots of other financial and investment goals so money on a car seems like a waste to me

I'm another "buy nearly new" fan. In 2021 we bought an 11 month old Suzuki hybrid from a dealer, with 5k miles on it, which was £11k. It had been used as a demo by a staff member. New they were £16k. It's still worth £11k because of all the crazy.

We decided we needed a second car last month so bought a 10 year old Mini on the debit card. It was £5k, zero tax, witg a year MOT.

This is what I do. Second hand cars are really expensive at the minute though. I thought I'd get something really good for 8k but it's not enough 😔