Lease vs PCP vs HP for next car?

[tellmewhenthespaceshiplandscoz]

Morning folks

unfoese circumstances mean we will need to sell or part ex our car and get a new one. Until now we have always paid outright for a 3/4 year old second hand but last few have turned out to be absolute money pits. Not helped by fact each time we haven’t been in a situation where we can spend long thinking what car we want (think insurance right off, that kind of thing).

So this time we are considering going “new” new on some form or finance option. I know that as it’s new we won’t need to worry about MOT for a least a year, we will have a warranty and in some cases can add on a maintenance package? All of these are extremely attractive in the sense it’s all sorted out £ wise up front, we know what cost will be and can budget and not worry about nasty surprises as we are having to do yet again with our current 10 year old car.

Can anyone offer their experience and advise on how each option has worked for them? Alternatively any words of warning or pitfalls to look out for? Also, sounds thick but will they all now be EV or hybrid? As that’s a whole new difference for us!

No idea yet what vehicle but I do like the look of Skodas and every one I know who drives one is quite evangelical about them 😄

I'll start by saying that Skoda are generally very good cars. They're owned by the VW Audi group and share technology, engines and platforms with Audi, VW and SEAT. They always get good reviews and, while I've never had one, I'd look at one if I was looking for a reliable, family car. (I rarely change my car, I keep them for 15 years or so, and counting.)

The advantages of buying new are that you'll have 3 years before you need to get the car MOT'd. It will come with a warranty and you can choose the extras you want and tailor make it to your requirements. You will be offered all sorts of finance options which make the deal look easy, but you'll be paying through the nose for the finance and the fact that you're buying new.

The downside is that it will lose maybe 20% of its value as soon as you drive it away. That's the reason why a lot of people go for 'nearly-new' 2-4 year old cars which have low mileage and a good service record. They've already lost their 'new car premium' and if they've been looked after well, you could get a very good deal. I did this with my car. It was 5 years old, with low mileage, one owner and a good service history. The seller loved the car, it was his pride and joy, but he needed a bigger car as they were starting a family.

It's up to you whether or not you want an EV. Do you have somewhere to charge it? That's the first hurdle. Petrol and diesel cars are still available, so I suggest you visit a few showrooms and test drive a few cars and narrow it down. Also consider what type of driving you're doing - school run mostly? around town? long distance journeys? With an EV you'll have to consider the range between charges. While there are charging stations all over the place in urban and suburban areas, they may be few and far between in the countryside. I don't know, so worth checking.

Don't let yourself be cajoled into signing up for something until you're sure it's what you want. There will be plenty of excellent nearly-new cars for sale which could save you a lot of money in the long run. Beware the salespeople who will try everything to get you to sign on the line.

Thank you! Yes we have always been very similar and gone for newish but used which until x last two vehicles served us really well and paid outright so having a debt at this stage of life isn’t something we will do lightly.

Feel like we’ve probably just had bad luck with the cars webs had but current one is skating close to starting to cost more than it’s worth. And it’s only 10 years old. Madness isn’t it?!!

But yes, thanks. Skodas do look nice.

Here's an explanation of various financing options:

https://www.theaa.com/cars/finance/car-finance-explained#:~:text=Personal%20loan,time%20period%20to%20suit%20you.

dont buy a brand new car, the depreciation is insane. You can find a car less than a year old that you could get on similar finance deals with remaining warranty and pay less.

I would seriously caution against falling into the PCP/HP trap. I've done it before and would do everything possible to avoid it in the future. I've gone from someone who had a 4 series BMW on PCP to someone who has a 13 year old car that I won outright.

Do you research and find a car you can pay cash for would be my approach. You can get a mechanic or the AA to conduct a vehicle check if needed

Thanks

Thank you

If you’re employed then see if your employer has any deals. DH leases a new electric, no upfront or end payment. Service and insurance all included.

Over the years I’ve had old bangers, bought on finance second hand, bought on finance new, PCP and leases. All have their pluses and minuses.
After breaking down in a second hand car with my then baby in the middle of winter, I vowed never to have an old car again. So I’ve had new for the last 20 years.
I’ve leased for the last 4 cars I’ve had, paying around 200 - 250 pm and leasing for 3 years at a time. So over 12 years I’ve probably paid £36K out. I never get a maintenance package, never need an MOT, and get cars that I wouldn’t be able to buy outright. My current car is a Peugeot 2008 GT top of the range model and is excellent. Up to now I’ve always had VWs, but actually much prefer this one and it’s a good price point.
Don’t go through a dealership - they charge more. I used a broker this time and would definitely do so again.

You can buy a pre-registered car with delivery mileage that offsets some of the new car depreciation. In your shoes I’d go to a car supermarket like Mototpoint and just try different cars, they have petrol, hybrid and electric cars and are happy to let you test drive. They don’t do new new cars, but have a good range of pre-reg and 1 year old cars. If you find one you like and are fixed on a new car you can head to the right dealership.

I’d also look at taking a personal loan rather than PCP or hire purchase. You may find the interest rate much better and can negotiate as a cash buyer.

My car needed replaced due to a persists fault with the engine. I’ve bought a 1 year old car with very low mileage (under 4k), saved £9k on the new price, no MOT for 2 years and it still has 4 years manufacturer warranty. It feels and drives like new. Definitely worth consideration unless you really want a brand new car, but you’ll loose money as you drive it off the forecourt.

Thanks everyone - it’s been really helpful reading your posts.

Since I started this thread DH and I have done pretty much a full 180 and talked ourselves out of any sort of finance … we haven’t had debt for years so while we can afford “nearly new” out of savings I think we will go down that route again.

We will definite selves to some cat supermarket type places and drive a few with a few to get something a few years old but will never buy a fucking Nissan again .

Thanks again folks for your thoughts.

Cheers Jelly I think this is where our thoughts are.

Does anyone else though find the whole thought of having to sort a car out fairly quickly, fills them with dread?!! Feels a tad overwhelming. And of course the £ 😳

Have a look at pre-registered cars on www.carwow.co.uk
I've bought two cars there. Last one I paid £9k less for a car with 100 delivery miles. Consider Toyota cars too. Regarding going full electric, BYD is getting very good reviews.

Yes. I bought a car about 15 months ago with the intention of running it for a good few years. A make and model I knew well, but the latest version wasn’t the reliable car I knew. After 3 engine faults, one recovery on the back of a flat bed truck and another near miss I decided it needed replaced quickly, I need a reliable car for my work.

I did feel overwhelmed and less confident in choosing a new (used) car, and a bit panicked by the urgency of replacing it. In the end once I decided it had to go I set a criteria (nearly new, price limit, warranty) and just went to a couple of places and looked at as many cars that fit the bill. I’ve ended up with a 25 plate Hyundai Kona and it’s perfect for my needs.

Stupid question - what’s a pre registered one?

Cheers Jelly that’s reassuring. I think you’re right once we decide Let’s Start Looking we will be ok. I’m finding now I’m 50+ I seem to be growing into procrastination which is something that I’ve never done till now 😳

My last 3 cars over the last 20 odd years have been Toyotas. Bought when they were between 18 months and 3 years old. So still with a minimum 7 years warranty on them. None of them have ever required any work other than tyres/discs

Basically the car dealership registers the car to them and takes delivery, so they hold the car in stock. There is then a drop in price because the car is no longer “new” because it’s had a registered owner. It’s a good way of getting a new car for a lower price.

Can’t comment on the finance aspects but one option between brand new and a few years old is to go for an ex demo from a dealership. We have done this for our last three or four cars so probably for 15 to 20 years. They are usually about six months old, with a few thousand miles and still shiny but they have last the very high brand new premium. We have an Audi electric, dc had Skoda electric, they are basically the same chassis and engine .

Get a Skoda. You won’t regret it.

👍

@tellmewhenthespaceshiplandscoz out of interest what manufacturers were the last two cars that proved costly?

I would stay with your current no finance approach but buy Japanese for reliability to avoid any issues moving forwards. Honda, Toyota, Lexus, or even a Suzuki for a lower price point. Not Nissan, to many parts shared with Renault and they start going wrong at 7yrs+ and do not have the same reliability ratings.

I can suggest models if you can share what size/style car you're after and rough budget you have available.

Škoda fan and owner. They’re basically VWs with slightly cheaper bodywork.

Bank loan? Don’t pay interest for the sake of getting finance from the dealership, pay to own the asset at the end?

Watching this with interest but my 9 year old kuga is currently still going strong! A lot of Skoda recommendations on here! Will remember that.

Car finance is a minefield. DH is currently pondering replacing his 9 year old car. He found that interest rates don't just vary between brands, but also between models!