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Mrs has £350pcm to get a car for work (also needs to carry 5+ holiday luggage).
Neither of us know anything about financing, looks like she can get a newer car on a lease or get a bank loan to buy sh, with low risk and value the respective positives.
Are there any good guides, or just do some googling/window shopping?
PCP / Leasing is the defacto method these days. There’s a couple of places online that offer multi brand deals. Prices vary massively if you want fancy options etc against having what’s in stock now.
PCP, my daughter just brought the Hyundai i30n home from work, she reckons it’d be about £350 a month.
Boy does it shift!,!
I'm no expert and would stil feel funny about it with my own money to be honest. Much prefer to buy 2nd hand with cash. But Im assuming this is someone else's money?
From my limited research into PCP it is counter intuitive (actually not - makes sense when you think about it) but the precieved quality brands with better depreciation figures seem to make the best pcp deals. So a VW/Audi might work out cheaper than a Renault or a Peugeot (or the Hyundi above).
Also - is this a total figure inc insurance and servicing/tyres etc or just for the car?
It is as convert says counter intuitive to how you think you’d save money, you’re far more likely to get a good deal on a low depreciating car, other than something like a Renault which drops quicker than a lead weight...
This is a good website to see what you can get for the £350/month: http://lingscars.com
Yup Convert is right those that retain a good secondhand price kick out better deals which tends to be the more premium models. I pay £305 for Golf GTE on a lease scheme which includes insurance, servicing and all parts.
Liiiiiiing!!!
I'm with Convert, much rather buy than rent. £350/month will get a very hefty loan (how long is this money expected to last?) and then the pick of the second hand market.
Are they giving her a car allowance to go and buy a car or will she be getting a company car and the value is up to ~ £350 per month?
If a company car she should look at a hybrid as they offer best bang for buck due to low ish BIK rates. I drive a BMW 330e all in for £330 per month, I could get a BMW 530e for £370pm
A lot of people who get a car allowance buy a cheaper car and keep some of the allowance
Fully loaded Octavia for ~£200/month?
I hope this includes the 2litre engine and rear wiper....
Fully loaded Octavia for ~£200/month?
Looks more like £300 a month to me when you add the £2500 ‘up-front’ rental....
We got a Zopla loan with 3.1%apr for 20k in Dec last year, £370p/m.
Bought a 3 year old Galaxy (& paid for insurance, tax, towbar fitting etc).
Looked at leasing but there’s a bit of me that prefers the idea of owning the vehicle, although there’s no real rationale to that other than getting the spec I wanted new being more money.
If I was just after a ‘car’ rather than wanting/needing a specific set of requirements I think lease could be attractive given some of the monthlies out there.
Fully loaded Octavia for ~£200/month?
Its not though is it, with a hefty £2,500 deposit and only 8,000 miles you are looking at over £300 pm for a crappy Skoda !
I still prefer to buy.
I took out my first ever car loan a couple of years ago, using Ratesetter. Can't remember the exact credit rate, but it is silly cheap.
Pay up over three years then the car is mine. I then have the control over whether I trade for new, keep for another few years, or run for ten years and it starts to get expensive. Also do as many miles as required without paying extra.
I also have control over whether I fix scratches or live with them. I know several people who have had to pay £600 odd to touch up bodywork before handing back lease cars.
Its not though is it, with a hefty £2,500 deposit and only 8,000 miles you are looking at over £300 pm for a crappy Skoda !
So your BMW 330e had no initial rental/upfront cost? Seems a bargain if not
Cheers all, I'll look at those links later.
She gets £350 car allowance from work (taxed i think). I'd be a buyer in that situation too...
The important thing is you understand the difference between PCH and PCP. Depending what you want both can make sense. PCH you are just renting the car. PCP you have the option to buy, so can trade in against any positive difference between the trade in and the balloon payment. Often PCP is for a longer period, which may mean you have more maintenance risk (and there are some very good PCH all inclusive maintenance offers as a result).
beware pch figures are often advertised ex VAT.
beware the headline price is often not available on pch because they don’t actually have that model in stock - so you’ll need to pay for some options you didn’t want if you want it quick.
beware brokers fees. These can be as much as £500+vat.
but there are some good deals around, especially if you are agnostic to the actual brand/model and just shop for good value.
on average best value probably is second hand with a loan, but you do run the risk then of some big maintenance bills. £800 for a new steering rack in the first year of owning my last car made me more convinced that “new” is not so bad.
Lease is a winner if you'e not fussy. I currently pay 165 a month (with 1300 ish up front) for a Kia optima estate 1.7d (23k new). It's quite frankly a great car but by God it's dull and soulless. It just does everything so efficiently and ticks all the boxes but without any oomph which I've been used to for the last 12 years worth of cars. Ive got 10k miles per year on a 2 year deal and I've found nothing similar with the biggest concern being where to look in 10 months time...
I have just gone pcp for the 2nd time ( my previous 2 cars were bought second hand) so here are my thoughts. (I am in euro land so your figs may differ).
My pcp ended, was paying 360pm on pcp when it ended. To buy the car at this point (3yrs old and 70km on clock) the bank loan was 375 over another 3 years. I also then factored in 2 new tyres, 3 services (one major) which added anorher 30pm approx, so to buy a 3 year old car and run it for 3 years was about 400pm, provided there were no other issues with a car that would be 6 years old by the end. I then looked at what a 6 year old car is worth to see my equity in the car in 3 years.
Next i looked at another pcp deal trading in my current one and this came in at 400 for a new car (similar car to what i had) which included 3 years free servicing and warranty so no additional costs. Then i looked at the equity i would have in this car at 3 years and it was similar to having a 6 year old 140km car to trade in.
So i went pcp again given the fact my last 2 2nd hand cars all needed additional repairs while i had them (brakes/shocks etc) as for the same outlay on pcp i get no nasty bills. Works for me.
So your BMW 330e had no initial rental/upfront cost?
Correct no upfront, fully insured and maintained too
Where from Funkydunc?
Check the small print in the company scheme too - they often specify a maximum age for the vehicle which can impact the economics of buying a secondhand car.
Vertu lease.......cupra 300 (67 plate), £2.2k initial rental, £258 pcm for 2 years..........and I'm loving every mile of it! No option to buy, maintenance included
I’ve just finished a 3.5 year lease on a Yeti. That included 3 services and breakdown cover. Oil and filter and brake fluid. Air con service was optional. With a 3k deposit it was about 250 month. Do the maths it’s a really expensive way to have a new car. Never again for me. Just bought a Seat Leon 2015 FR ST for 12k with 15k mileage. Still in warranty. It’s mine I can do whatever mileage I want. Servicing is fixed price at the main dealer. Someone has lost 13k on this car in 2.5 years. This time it wasn’t me!
Been given a £500 pm allowance in my wages for a car when the lease on the current company van ends in June.
Not sure what route to go, tempted more by second hand and getting a loan rather than new and leasing type options. As I will be using the car for work I will need decent milage allowance, 15k-17k per year and some of these leasing options don't appeal because of that.
Only found out on Tuesday so not got to long to think about things.
Its not though is it, with a hefty £2,500 deposit and only 8,000 miles you are looking at over £300 pm for a crappy Skoda !
It's not obvious from the website but the prices are examples, it's totally flexible. You can front-load as much or as little as you want and pay over more or less than the quoted timespan. I'm paying something like £150/month with £2K up front for a "crappy" 2 litre diesel Octavia SE Tech with sat nav, DAB, adaptive cruise, parking sensors etc etc. and a mileage allowance of 10K It's a nice place to be. It's considerably cheaper than anything else I found in the same class. A similar-specced Mondeo was practically double that.
Last night I worked out the finance on a £21k car - bank vs lease it was no deposit and 5k cheaper over 5 years to go with the bank. I did wondered if they’d lend me 21k though!
It’s not obvious from the website but the prices are examples, it’s totally flexible. You can front-load as much or as little as you want and pay over more or less than the quoted timespan.
That doesn't really change the total cost though. They want their (for example) £4800 over 2 years, whether thats £2400 up front and £100 per month or £0 up front and £200 per month doesn't really matter, you're still paying £4800 over the two years.
The Simpsons deals look ok, but that big deposit turns the "Wow, only £150 a month" deals into a real cost of £250 per month, which might still be a bargain, but it's not really £150 per month over the full term.
I just bought a pretty tidy and very well optioned 2nd hand car that was exactly 3 years old with pretty sensible mileage on it from the main agent with a years warranty. Bought it cash with our savings that had accrued whilst we used the last car (had it 8 years). I had a dig around and found the best deal I could on the same model new and added the initial lump sum to the monthly payments. They came to £3K more than I paid for mine and mine had £4K of (useful and desirable for resale) extras that would be missing from the new car. Yes, running a car between years 3 and 6 with only a year of warranty has more risks of being spendy but that is a significantly difference in numbers. If mine is worth half what I paid for it in 3 years time (and I have no reason to think it won't be) I'll be up by a lot even with a few biggish bills in the meantime.
I guess the key is to getting a pot of money together to buy a car outright without any sort of finance, buying a car and then start saving again straight away ready for the next change rather than always playing financial catch up.
That doesn’t really change the total cost though. They want their (for example) £4800 over 2 years, whether thats £2400 up front and £100 per month or £0 up front and £200 per month doesn’t really matter, you’re still paying £4800 over the two years.
The Simpsons deals look ok, but that big deposit turns the “Wow, only £150 a month” deals into a real cost of £250 per month, which might still be a bargain, but it’s not really £150 per month over the full term.
Indeed. I never said it was. It's not £300 a month either though, and it's still considerably cheaper than anything else I found in the same class.
Not sure what route to go, tempted more by second hand and getting a loan rather than new and leasing type options. As I will be using the car for work I will need decent milage allowance, 15k-17k per year and some of these leasing options don’t appeal because of that.
Mileage aside, I went through the same dilemma. My thought process ultimately was, for ~£5K over two years I can get a brand new, high spec family hatchback with warranty, breakdown cover and accident management. I didn't go for it, but optional cover for replacement tyres and 'free' servicing was like £15/month extra. The downside obviously is that the end of two years I'll have nothing to show for it.
Alternatively if I was to buy, for the same expenditure I could buy a 7-year old Focus. Smaller car, and if I'm lucky a 6-month warranty. In two years I'll own outright a 9-year old Focus will cost me nothing beyond the running costs of maintaining something nearly a decade old with 100K on the clock. And if the engine falls out of it in seven months I'm screwed.
When I looked at it that way, buying just seemed madness. And the clincher was, it's a car for work use - what impression am I making rocking up to a client's site in a bangernomics motor?
I paid £750 for a 10yr old Mk3 Mondeo estate with 120k on the clock. Put 50k on it in under 18 months with never a problem. Prior to that paid £1200 for essentially the same car with 85k on it. Put 35k on it in just over 18 months before it was written off by a patch of black ice. Scrappage value for both cars £230. Total spend over three years £1720. Average monthly spend £47.
Hugely comfortable, great to drive cars.
Now in a 10yr old Galaxy that cost the eye watering (for me) sum of £4k. Four thousand miles on it thus far and not a problem.
Horses for courses of course and proves nothing, but do think we have become conditioned to spending eye watering sums of money on cars (as indeed our indebtedness as a country would seem to back up).
Then again, lots of my mates are horrified by what I spend on bikes and assorted paraphernalia..😉
Horses for courses of course and proves nothing, but do think we have become conditioned to spending eye watering sums of money on cars (as indeed our indebtedness as a country would seem to back up).
^This.
Cars just cost lots of money. What I cannot understand is why folk are then happy to pay more and more...
OP - £350 a month gets you a nice motor, second hand, with a full after market Warranty for two or three years.
I know as I am driving a very nice V70, four years old, for a *lot* less than that.
Cheers Matt - my thoughts exactly. I hope the Mrs doesn't get sucked in by "new is best" BS.
Where do you get your V70 MOAB?
*hangs head in shame*
Arnold Clark
*still hangs head*
If anyone is after a good V70 - I drove this one, and nearly bought it. Basic model but minted condition.
https://www.gumtree.com/p/volvo/volvo-v70-2.0-d3-es-5dr-start-stop-/1291097378
Edit: then the Arnold Clark one popped up in Perth the same day, same cost, one owner on Motability from new, with new towbar, year newer and SE but 10k miles more. In the end it was easier to just get the local one, than fly to Bristol and get that one...
Open admission, I work for this Company and this isn't just a plug. I'm not suggesting this is the best option for you but this website could be helpful to see what's about on the second hand market within your budget.
Www.findandfundmycar.com
Put your budget in and it'll give you a list of cars for sale along with the monthly cost through either hp or pcp purchase.
As other have said though, it could be cheaper to purchase via a bank loan if the company vehicle allowance permits it.
Not sure if anyone else has covered this, but if she goes down the leasing route make sure she's comfortable with the fact that if work make her redundant or for some other reason they stop paying her, she will still be liable to continue to pay for the car.
With a pure lease she'll need to pay out to the original end date, with a pcp she can give it back any point after the halfway point (i think).
Might not be a big deal, but if this is a problem then a loan and a second hand car that can be sold at any point might be a better bet.
Horses for courses of course and proves nothing, but do think we have become conditioned to spending eye watering sums of money on cars (as indeed our indebtedness as a country would seem to back up).
Then again, lots of my mates are horrified by what I spend on bikes and assorted paraphernalia..
Where do you think all of these cheap older cars come from? Someone has to pay the depreciation for you first.
I’ve flipped my decision right over. I will have the cash to buy my now 5yo 120d in October. However it works out in my favour to bank loan the car, and use the cash I have already to pay £10k off the mortgage. In three years the car will be worth £5k – a decent deposit on something else should I find out I can afford it by topping up the loan, but the mortgage will still be £10k less. Car works out at £177 a month at 3.3%.
Sod the car, that’s smarter thinking.
I could go REALLY mad and borrow £15k – becuase I’d get the whole lot then at 3% (First Direct) , and stuff £5k of the loan into the mortgage. I’d still be better off in the long term becuase of the 15 years of mortgage I have left. Gadzooks!
One of these would fit the bill.
, with a full after market Warranty for two or three years.
FULL ? I’ve only once fallen for that trick... if you want second hand with a potentially useful warranty perhaps look at a Kia. I don’t know anyone who has bought an aftermarket warranty and actually got more than they paid for it in parts and labour (if paid at local garage rates not main stealer prices).
If comparing new and used remember that things like tyres and brake pads will need replaced sooner on used. A short lease may not need them at all.
With a putre lease she’ll need to pay out to the original end date...
not necessarily i know many are like that but some have an early exit point (perhaps only with a high initial payment?)
Non-new warranties aren't worth the paper they're written on in my experience.
Cougar that link you posted only seems to result in PCH deals, not PCP. I noted the Simpsons offers are PCH as well.
With no option to buy the car, is it just me that’s a bit nervous of buying a car on PCH that’s going to be driven around a muddy field and constantly have muddy bikes in/on it?
£350/month gets you my new A6 estate for 4yrs with 20k miles/yr
Its a better deal than any comparable estate due to silly discounts/finance contributions as the new model is due soon.