How do you afford car finance?

[Brumbrum1]

I feel like all I see on the roads nowadays are expensive and newer SUVs. If you have a car which is relatively new, did you buy it outright? If financed, what do you pay per month and which car do you have?

I’m in the market for a new car but i’m not sure how to fund it…

We always buy outright, never new, always 3 years old. We find this good value as it’s the point an MOT is first required. DH knows enough about cars to buy with confidence.

How do you afford anything? You budget and prioritise.

I buy a small used car, and pay it outright.

When I was younger I would save every month towards a new car, much safer than committing to finance. Now I’m older I tend to buy outright.

I always do personal car leasing. I'm a woman on my own and prefer the certainty of having a car that works and that is serviced, MOT'd and covered for breakdown.
Some car leases require an initial deposit and then something per month, my current lease was a no-deposit one. It means I can calculate how much I can afford a month for a car and then look for something which fits in with that.

There's a very small amount extra per month to cover servicing and repairs (if needed) without any other cost to me. The lease company just arranges everything and each year the car is taken, sorted, and brought back. When the 3 year mark comes, the MOT is done and paid for, there's usually one new set of tyres included as well. My last lease for my previous car also included the road tax but my current car doesn't, I have to pay that myself.

There are usually 2-year, 3-year and 5-year leases available and at the end you can pay the outstanding money to buy the car or give it back and have another one. I've done it for years and I'm very happy with the system.

We took out a personal loan and bought a 4 year old car. Cheaper than car finance and nothing extra to pay at the end. The last car we bought like this lasted a good 10 years after we finished paying for it.

Can never understand car leasing it just seems like money down the drain.

We bought outright, prefer not to have loads of DDs every month. Would rather just spend the money than constantly owe it. Didn't buy brand new, but 2 yrs old.

Just bought an MG4 outright, got a discount from dealership and affinity mg club dealership and it made it much cheaper than a lease or other finance. Had one before on finance so know I like it long term.

it comes down to priorities we don’t have flashy holidays.

Couldn't afford not to in the end.

We had a string of older cars over a 10 year period. Lost count of how many expensive clutches we paid for, blown up engines etc etc. We might not have had a monthly car payment but we definitely spent way more than we spend now.

Bought brand new - £17k - £2k deposit and I pay £300 a month. In 3 years I will have a balance to pay or I can swop it. I will probably just buy it this time, so I'm saying to be able to pay that balance off. It's freeing knowing I have a new car that's reliable. I will know the exact history of that car.

Let's be honest. The only reason people sell on 2-3 year old cars is because something is starting to go wrong with them.

Like how people afford anything.
People have different incomes.
People have different outgoings.
People have different priorities.

Also, where are you living that I feel like all I see on the roads nowadays are expensive and newer SUVs ??
You obviously don't live in my City.

We have a new T-Cross and pay £300 a month for it. We got a good deal because it's a 2019 design one that we got just as they started selling the 2023 version. Before that, we had a BMW that was about £450 a month.

As to how we afford them, we just have enough money spare each month. We like keeping our money in investments and accessible cash savings, so prefer to pay a monthly cost rather than buy outright. We also finance our cars because we like having the flexibility to hand them back rather than sell them when our circumstances change.

We have always bought outright, but talking to sales staff in local BMW, Landrover and Skoda garages recently they all said PCP deals account for over 90% of their sales

I think most people sell on 2-3yo cars because they like having a new car.

No, I think the fear of something going wrong is much greater than the reality of things going wrong.

And if something does go wear out or go wrong, it's very rare to strand you these days.

I've always bought at a few years old, it offers greater value with the higher miles I do. I've also got an excellent garage who I trust to advise me, I stay on top of servicing and maintenance. My last three cars were between 5 and 7 years old, with 70-100k on them, and I never had a breakdown. I had a few bills, but still way cheaper than new.

Remember the majority of new cars on the road are now business owned / company cars.

How many miles you do can greatly alter financing - living in Highlands I rarely do less than 15,000 miles a year. My sister lives in Manchester and barely does 6,000, and so finds a lease car works for her. For me lease or PCP is huge cost, but bank loan on older car is acceptable.

We've always just paid cash for our cars, but we'd probably look into getting a loan if we couldn't do that for any reason.

We have a Volvo estate, bought brand new 3 years ago. £50k(ish), we put £20k down and financed the rest. IIRC the monthly payments are around £450.

The planet probably doesn't want us to buy a new car every 3 years. I happily buy the hand me doen cars at 3 years old. At that age, if they are a lemon you know, assuming average mileage they should good for another 7+ years but someone else took the 20% depreciation when they drove it off the forecourt.

Um, people with expensive cars probably have a higher income than you? If you can't afford a big fancy car...then you just can't 🤷🏻‍♀️

A lot of the new cars you are seeing will be company cars.

We buy new or nearly new and keep them. One of ours is currently 16 years old still going strong, never broken down, only cost routine services and consumable such as brakes and tyres etc. If you drive carefully/properly and have them serviced properly, they can be expected to last. Average age of a car on the road is 13/14 years and a fair proportion last 20;years.

People who say/think all cars over 3/5 years are unreliable or cost a fortune must either be poor drivers or don’t have them serviced.

Buy new/nearly new and keep for many years is the cheapest way to own a car. Constantly changing every 3 years whether bought or leased is a costly way - you pay more for keeping up with the jones obviously.

I finance cars. Approx £320 a month. It’s a big expense but probably my 2nd big expense after the mortgage. I normally just swap every few years but I’ll keep the one I have for a few years after I’ve paid it off. It’s budgeted with my expenses each month so it will be nice to have that extra money
I couldn’t afford a decent car outright and I want a reliable car that doesn’t break or need loads of repairs which would be costly.

We always purchase new. Always paid for outright.

We've always driven cars at least 10 years old and bought outright. In contrast, we have a sizeable house and holiday a fair bit. Different priorities I guess. I'd rather put my money into a house than a new car.

We earn enough to pay for it and would have bought outright but my last two cars have been interest free and we got really good deals, it worked out better than paying outright upfront. The current one will have the balance paid off when it's up for renewal though and I'll be keeping it. DH has a van that was paid for in full. Never owned an SUV though, absolutely no need for a car like that.

Car allowance from work - I've used it to fund hire purchase finance on a 3 year old car, and the monthly balance left over on my allowance builds up to pay the finance off sooner, then I will own it outright and car allowance continues to build up after that to then put towards next car too.

Many of my colleagues max is out on leases instead though to have fancier cars - I've done that before too but wanted to actually own the car at the end this time.

We buy outright…..car around 3 years old…….kept the last 2 10 year and 12 years