We have a 1998 Audi estate that we bought for cash from a friend 3 years ago when DD was born. For some reason we thought we needed a ginormous car. Everything has been v expensive to run, from fuel to servicing to parts to tyres to parking to insurance. Although it was useful for holidays etc. Anyway it's just failed its MOT and is costing £1000 to repair. So over the three years it's cost us the £5k we paid cash for it, and about £4k (yikes!) in extras and repairs, as it hasn't been hugely reliable. It's probably now worth about £1500 if we are lucky. DH doesn't really use it - it's just me and the kids most of the week.
I want to buy a really tiny new small car (eg a Toyota Aygo) now we are past the big buggy stage. New, because it will be smart, clean and reliable, with windows that wind down ( yes, it's me opening the car door in the multi storey because my window doesn't open) and little or no maintenance costs, plus vastly cheaper to tax, insure and park ( we live in a borough that charges more to park big cars.)
I am trying to persuade DH that putting down say a £750 deposit from the sale of the Audi and then committing to a monthly payment of about £135 makes more financial sense while interest rates are so low - we hand the thing back at the end of 3 years and then get another new shiny car with the payment levels staying about the same. Unlike owning a second hand car it's completely predictable, you don't have to pray it's going to scrape through the MOT and you're not lumbered with trying to sell it when you need to change it. The saving in fuel alone will be £30 a month, in road tax £150 a year and in parking another £100. And who knows how much in repairs.
DH is absolutely allergic to the concept of having a new car because of the famous depreciation thing - but my argument is that with lease hire you are not subject to that so much because you are seeing a car as what it is- a necessary cost, like food or clothes, not an asset, and you never own it, you are paying to use it. (And apologies to those who rightly point out that having a car is not a necessity, but let's leave that for the moment!)
So am I right, or am I completely barmy? The alternatives are nursing the Audi through another year, or possibly buying another second hand car.