Cars, cars, cars - a headache.

bl0at3r

bl0at3r

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Looking for some sense really please!

I currently drive a 2003 Astra with 44k on the clock. Is worth about £500 quid to trade in, maybe get a grand private if the right buyer came along - it is 2.2, does about 30mpg combined and costs £280 quid to tax.

I don't NEED to change it - it is reliable, scrubs up well and doesn't owe me/cost me anything really.

But I have the itch and am looking at other cars.

I have never paid out monthly for finance, I have bought cars outright in the past (don't know whether that is good or bad to be honest).

I have some savings, which I don't want to spend all on a car, but could use some as a deposit.

My dilemma is to get into the 'club' that is PCP - you obviously have an entrance fee (the deposit) and a monthly payment. To get the monthly payment to around £250 a month the deposit is obviously bigger and the GMFV is working out at still almost half the value of the car after the deposit.

Once I enter the club, I am pretty much stuck paying every month, because in 3 years I am unlikely to have the GMFV so may as well just chop it in for a new one.

So do I ....

A.Stick with what I have til it breaks
B.Enter the club and not worry
C.Buy something newer with 3/4 of my savings

Thanks in advance for advice
 
If you do go down the PCP route be prepared to save up another deposit for the next car if that is your intention as there often isn't enough money left in the car on trade in to cover the deposit or keep the monthly payments to a similar level.
I'd tend to stick with option A.
 
If your credit history is good there are some seriously cheap loans out there , I took one from sainsburys bank , £7500 over 3 years , interest is just over £500

I'm 52 and have never owned a new car , they're really clever at making them look cheap but all your paying in effect is the depreciation , I don't want to own something that loses £250 a month when the shine has worn off after 3 months

My advice would be to put a monetary figure into autotrader and see what comes up, leave all the other boxes blank , I've found some real bargains like that

Plus if you make a big mistake like I did you're not stuck with it

I bought a low mileage Honda civic 1.4 , it ticked all the boxes, practical, cheap tax, good on fuel, modern, my wife loved it

2 months down the line my wife went into hospital and won't be driving for a year , I hated it so I sold it, something you can't do on a 3 year lease
 
bl0at3r said:
A.Stick with what I have til it breaks
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This, unless you have a pressing need to do something with a car that the Astra can't do.

Cars can go on forever nowadays and yours is barely run in . I have two "moderns", one ona W plate (2000) with 113k miles and one on a 51 plate with 170k miles. Both still going strong.
 
I'd keep the Ashtray till it breaks expensively. Bangernomics is where it's at nowadays - pay as little as possible and throw it away when it's done

Cars rarely, if ever, return any money so why borrow to finance depreciation?

Nick Froome
 
Its worth nothing. Keep it until it goes bang. Put the money you save aside for whatever you get next.

New cars are generally a complete waste of money unless you get something small and cheap and do a mileage high enough that the cheaper fuel costs and reduced repair costs cover the monthly purchase costs.
 
All great advice thanks.

I could spend upto £6.5k either on another car or as a deposit for PCP and have savings leftover.

My mental wranglings are that I would want something newer and with less miles than what I have to justify spending more money - does that make sense? or I may as well just keep what I have.

This is where the trouble lies - the sort of car I want that is newer and with less miles typically costs between £10-14k.

So in my tiny mind it seems that if I decide to go with this car, I've got to get in debt for best part of £6.7-7k for a 3 year old car, then I may as well get PCP on a new one - monthly payments would be about the same but I am obviously mentally ignoring GMFV vs owning the car after 3 years if I went with a used car.

After 3 years I would have a 6 year old car that I owned or have nothing because I handed the car back, but would start again with a new one (I note the issue of the lack of deposit).

Or I could keep the astra and buy another car - something abit more fun to run alongside like an mx5 or classic/retro - still be less to run 2 cars than the depreciation on a new one I would imagine.
 
wack61 said:
2 months down the line my wife went into hospital and won't be driving for a year , I hated it so I sold it, something you can't do on a 3 year lease
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I've had 3 new cars on Ford's Options scheme (PCP) admittedly back in the 90's and last one I handed back after 18 months of the 2 year term, just walked away with nothing more to pay. As far as I know there is nothing to stop people from still doing the same. Or even part ex'ing the car or selling private and settling the difference.
 
bl0at3r said:
I currently drive a 2003 Astra with 44k on the clock. Is worth about £500 quid to trade in,
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I had the same car with 100k on clock and looked like a shed £700 trade-in ...


I was in exact same position as you... It was ultra reliable.. worked all day long.. mine was 1600 petrol.... to be honest it was starting to get embarresing turning up at jobs in a tatty car... other than that.. old.. looked rough.. worked a treat


I decided (with good reason for me) not to go finance.. spent a couple of K and bought a used 2 ltr diesal .. cheaper tax than the astra but 200 more insurance.. however I will save that as fuel consumption is better ... I got a car that looks perfect.. hasnt a scratch on it.. seems as reliable (only been a few months) and is a pleasure to drive.. makes me smile everytime I use it :)

You will gte more for yours as a trade in and you can pick up a nice car for a decvent price so I will go wiht C

bl0at3r said:
C.Buy something newer with 3/4 of my savings

e
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I love this car :)

bmw.jpg
 
If you go down the pcp route then use the Astra as PX and no more than £1000 that way you will have more chance of changing in 3 years without needing a deposit. Worst case you have £5k in the bank (plus accumulative interest) to pay off the gfv, provide small deposit if need be. Let your savings work for you. BTW I used to work as a Business manager in a main dealer. Most of my customers changed every 2-3 years with little or no deposit. Don't be tempted to use more of your deposit to buy the top of the range model with all the toys :-)
 
ChrisHeathcote said:
If you go down the pcp route then use the Astra as PX and no more than £1000 that way you will have more chance of changing in 3 years without needing a deposit. Worst case you have £5k in the bank (plus accumulative interest) to pay off the gfv, provide small deposit if need be. Let your savings work for you. BTW I used to work as a Business manager in a main dealer. Most of my customers changed every 2-3 years with little or no deposit. Don't be tempted to use more of your deposit to buy the top of the range model with all the toys :-)
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Makes sense, but the the monthly payments will be too much and I *need* all the toys :lol:
 
Some cars fare better on pcp's than others based on the residual value although if your doing low mileage that will work in your favour.

If your concerned about equity at the end of the term you can always ask the exec to work an example out with a reduced Gaurenteed Future Value to help safeguard the equity in the car.
 
Well,

I currently run a 52 plate nissan Primera with 146K mileage, a 53 plate motorbike on 78K mileage and a 16 year old TVR.

44k mileage on an Astra isn't even run in yet... :D

Personally, I'd keep it whilst saving for something to replace it. If you can afford £250 a month stick that in the bank. You'll get used to not having it and have a decent pot quite quickly. It is quite incredible what's around these days for only a few thousand.

However - Cars are emotive things to some (hence my TVR), so heart may overrule head.
 
If it aint broke.....

Using savings as a deposit takes you from being in the black to being in debt. All you will end up with is a car (which you have already) and being beholding to someone for money. Don't do it.:nono:

BTW, I love cars and have quite a few of them. It's an affliction.....:bonk:
 
Take a look at a small car - low tax and 50mpg with a deposit and then interest free credit My wife has just bought a honda jazz and 47 / 50 mpg and 5 years servicing car will be paid in 3 years and she will keep it for 5 then sell on at about 55 - 60% of cost so 6k loss over 5 years works out at 100 pcm rental....

But you must keep car nice and clean and dent free as possible to maximize trade in value or sale potential. Honda cars always sell - But as we keep our cars very clean and keep up the FSH then normally a friend or friend of friend wants it after us and at just a little below the going rate....

But a car is a car and - IF you are ok with it - I would keep what you have save and then do the buy outright and get as much 0% credit as possible - many dealers are falling over themselves to sell a car - BUT BUY A CAR MAKE that sells well and is very reliable - you cant get better generally than Honda
 
The PCP route is good for nearly new cars too. There is a way to make them work for you.
The real key is to have the minimum deposit possible, you never actually own the car (the finance company does) until you pay the final payment - never do this!

Depending how many miles you do a year will have a bearing on the final 'value' and therefore the monthly payments, the less miles the higher the final value and lower the payment.
Now, if, like me, you do quite a few miles it is worth considering the T&C's of the finance agreement include the option to return the car after 50% of the contract has been fulfilled (usually 50% of the financial part not time). So, put the least money possible into the deposit, get the smallest payments that suit your need and 50% through when the car is worth less than you owe just hand it back and do the same again with the next car, it's called VT'ing and does not affect your credit rating as you are not defaulting on the finance as it's within the T&C's you're just using them to your advantage.

Because of my job I need to have a car no older than 7 years so I tend to buy ex demo's about 12months old with around 10k miles on the but after a couple of years they have 60k plus and plumit in value, once thery're out of warranty it's time to start looking for the exit before all the big bills come in, timing belt etc.
 
PaulF said:
Depending how many miles you do a year will have a bearing on the final 'value' and therefore the monthly payments, the less miles the higher the final value and lower the payment.
Now, if, like me, you do quite a few miles it is worth considering.........................
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disconnecting the speedo. ;):lol:
I've known several people do that, just change the oil at 6 months then reconnect the speed when it's time for a service. But obviously that's :nono:
 
IIRC, some dealers got caught out some years ago abusing the "service mileage" bypass of the odometer. Can't remember the make but I have a feeling it was a German marque.
 
don't get me wrong I love spending money - but as has been pointed out banger economics is the 'cheapest & most sensible way of now owning a car...

If you want to burn sorry meant spend £1000's of pounds then but all means get another car.
But getting rid of something reliable for an unknown newer vehicle is playing the odds & will cost you.
I have 3 vehicles:
05 Accord - 150,000m - dead reliable
01 A6 Allroad - 160,000m - dead reliable
07 Accord - 250,000m - dead reliable

Yours although a Vauxhall if it starts & doesn't rust away should be good for a few more years yet..
 
Some useful things to consider:

The GMFV is often set at a value lower than the cars predicted value in 2 or 3 years time - this allows for the unlikely event that used car prices crash. In reality, this very rarely happens which means that when the 2 or 3 years in up, the car is worth more then the GMFV and this difference forms the deposit for the next car i.e. you part ex for a new car again.

Car manufacturers often provide additional financial incentives for purchase on finance and often also additionally offer lower interest rates e.g. 4.9%. Again, these incentives can help as the deposit for the first and subsequent purchases. these incentives are also used to offset the effect of any downside in used car prices.

You can part-ex the car at any time during the contract period when the deals are at their most advantageous and you are nearly always only comparing monthly payments (as the deposit is covered by the above). The net effect is that your monthly payments remain similar or only increase slightly, reflecting 2 or 3 years of economics. Sometimes they can even go down.

With a new car changed regularly you are closer to worry free motoring. Maintenance costs are lower, no MOT worries, road tax is likely to be lower, fuel economy is likely to be better, breakdown cover is probably included for some or all of the period. These do equate to a saving which you could work out and take off the monthly cost to get the true cost of switching to a PCP plan.

And..you probably get a much nicer and more enjoyable car too.
 
Run it into the ground :thumbs:
 
Defiance said:
Some useful things to consider:

The GMFV is often set at a value lower than the cars predicted value in 2 or 3 years time - this allows for the unlikely event that used car prices crash. In reality, this very rarely happens which means that when the 2 or 3 years in up, the car is worth more then the GMFV and this difference forms the deposit for the next car i.e. you part ex for a new car again.

Car manufacturers often provide additional financial incentives for purchase on finance and often also additionally offer lower interest rates e.g. 4.9%. Again, these incentives can help as the deposit for the first and subsequent purchases. these incentives are also used to offset the effect of any downside in used car prices.

You can part-ex the car at any time during the contract period when the deals are at their most advantageous and you are nearly always only comparing monthly payments (as the deposit is covered by the above). The net effect is that your monthly payments remain similar or only increase slightly, reflecting 2 or 3 years of economics. Sometimes they can even go down.

With a new car changed regularly you are closer to worry free motoring. Maintenance costs are lower, no MOT worries, road tax is likely to be lower, fuel economy is likely to be better, breakdown cover is probably included for some or all of the period. These do equate to a saving which you could work out and take off the monthly cost to get the true cost of switching to a PCP plan.

And..you probably get a much nicer and more enjoyable car too.
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Some good advice there. Understanding the total cost of ownership is the key. Many people often find that recent cars end up much cheaper than envisioned because of the leaps and bounds being made in efficiency and emissions etc.

Coincidently I've just published my own Car Calculator tool on t'interweb. Use it if you like, ignore it if you like, but I'd suggest you can tinker for hours in it looking at all the different car scenarios. I know I have wasted many a time in Excel playing with the figures.

URL is here:

www.mymanmaths.com

Interested in feedback also as it's a new site. Let me know if you do end up checking it out.

D
 
Diving Pete said:
01 A6 Allroad - 160,000m - dead reliable
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I have one of them on a 51 plate, the valve block that sends the air for the suspension around siezed up giving it a distinct list. Odd seeing a car with one side having 2-3" more ground clearance than the other!
 
PaulF said:
Now, if, like me, you do quite a few miles it is worth considering the T&C's of the finance agreement include the option to return the car after 50% of the contract has been fulfilled (usually 50% of the financial part not time). So, put the least money possible into the deposit, get the smallest payments that suit your need and 50% through when the car is worth less than you owe just hand it back and do the same again with the next car, it's called VT'ing and does not affect your credit rating as you are not defaulting on the finance as it's within the T&C's you're just using them to your advantage.
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Whilst this is technically correct. It is in the terms and conditions and doesn't affect your credit rating, it will affect your ability to borrow. Finance companies are starting to clamp down on this and now share this information and may not be willing to lend you the full amount. I have known this happen on quite a few occasions. For me this would be a last resort!
 
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Keep it until any repairs are too costly to make it worthwhile

We have a 98 R reg Toyota Corolla, passed the last 4 MOT's with nothing wrong and gets an annual service, done about 80,000 miles now and gives roughly 45 miles to the gallon. Apart from a cambelt and some tyres, only other part I have had to buy was a new windscreen wiper.

This is only our third car since 1987 and can't see the point of wasting money on a box with 4 wheels to get scratched up in the supermarket car park.

Might go posh next time and buy a car that has a CD player, not sure what year they changed from cassettes :)
 
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Ok, these are all very useful replies so thank you. I been looking at deals and also cars on Autotrader, eBay etc.

I agree that the sensible thing to do is hang onto the Astra, especially as it costs me nothing and (touch wood) is reliable.

BUT, if I have spare money each month and can afford it, why not treat myself? I goto work and can pay my bills. Might even be dead soon!

Sometimes it is not about getting everything the cheapest way possible - sometimes if you want something you have to put your hand in your pocket.

I'm not suggesting either way is wrong or right - it is obviously personal preference.

I do get frustrated with people though - they notice you have something new and the first thing they ask is 'how much?' - not what does it do, what features has it got or what made you decide to go for x over y - just how much!

Anyway, I spotted this offer http://www.ford.co.uk/Cars/CarPromotions/FiestaSTPCH

Seems reasonable I thought at £199 per month - but if you add up the advance rental and the payments it comes to £11,741!! So a 3 year LEASE will cost over £12k after the 3 years (including the required servicing) when you hand the car back. Nothing to show for it at the end. WOW!

I guess at least if you buy a slightly older car outright from savings or with a bank loan you own it at the end. Although it will only be worth a fraction of the total outlay inc. interest - but at least it will be worth *something*.

Are the 0% deals, where you put down half the value at the beginning and then pay over 3 years with nothing outstanding at the end - in other words you own the vehicle after 3 years - any better?

My head hurts!! this has been going on for nearly 6 months now!
 
tijuana taxi said:
..... can't see the point of wasting money on a box with 4 wheels to get scratched up in the supermarket car park......
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True that other people always seem to spoil things - but just out of interest, if you don't waste your money on a car, what do you spend it on? or are you sitting in the lounge surrounded by piles of money? :lol::lol::lol:
 
Manufacturer 0% finance deals can be quite good. Some offer longer terms so you buy the car over several years instead of 3.

Just keep an eye on the total cost of ownership.

Some of the lease companies can have good deals on run out models they want to shift.

Worth having a shufty here too: http://www.whatcar.com/car-leasing/
 
True that other people always seem to spoil things - but just out of interest, if you don't waste your money on a car, what do you spend it on? or are you sitting in the lounge surrounded by piles of money?
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Just luxuries like fuel bills and food, oh did I mention photo gear too

Being more sensible, not really sure, but nearly anything else really than an expensive car to sit up the back of the garden under the trees to let the birds poo on.
 
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If you're still looking to buy a second car, have a look at toyota MR2 roadsters. I bought one for a bit of fun and it goes like a rocket, all for under £2500. Insurance is cheap, does 34mpg and has toyota reliability.
 
To those that keep saying just pay the minimum deposit - I don't understand?

All the finance calculator examples I have seen - if the deposit is £1000 then the monthly payments are say £379, if the deposit is £5000 then the monthly payments are around £240.

Either way the end amount I will have paid after the finance term is the same?!

Me no comprede :(
 
bl0at3r said:
To those that keep saying just pay the minimum deposit - I don't understand? All the finance calculator examples I have seen - if the deposit is £1000 then the monthly payments are say £379, if the deposit is £5000 then the monthly payments are around £240. Either way the end amount I will have paid after the finance term is the same?! Me no comprede :(
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Really depends on your thinking. Any deposit you add is money you don't pay interest on so it will save you money. The balloon payments stay the same so the monthly payment obviously goes down.

If you think you can make more money or have more use of your deposit money then don't pay it. Essentially the lower the APR is the less important adding a deposit becomes.

Don't want to push the site too much, but the tool on mymanmaths.com does allow you to play with all the examples to see the effect.
 
kalibre said:
Really depends on your thinking. Any deposit you add is money you don't pay interest on so it will save you money. The balloon payments stay the same so the monthly payment obviously goes down.

If you think you can make more money or have more use of your deposit money then don't pay it. Essentially the lower the APR is the less important adding a deposit becomes.

Don't want to push the site too much, but the tool on mymanmaths.com does allow you to play with all the examples to see the effect.
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Thanks - and I left you some feedback on your other thread about your site :)
 
If you have savings that will pay for the car outright, see how much the sum would earn you in interest over the term of any loan and compare that loss of earnings to the total interest payable over the term of the loan.

It may also be worth looking at expected depreciation over the period of ownership and seeing what your money will buy you in terms of a 3 year old car compared to a new one.
 
A) stick with what you have.

I'd never get myself into any debt obligation to scratch an itch, but I'm exceptionally averse to borrowing money, nor would I want to blow a large amount of my savings on something I don't need.
 
bl0at3r said:
Thanks - and I left you some feedback on your other thread about your site :)
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Thanks very much, I saw it. A single post of mine at that board got me in trouble though. I didn't realise I couldn't even 'suggest' that people could follow the twitter page if they wanted updates. Apparently this is spamming!

So it was instant siteban for life with what looks like no reprieve! Very harsh I thought given the context of the conversation and I was clearly trying to help people. Doh!
 
TriggerHappy said:
A) stick with what you have.

I'd never get myself into any debt obligation to scratch an itch, but I'm exceptionally averse to borrowing money, nor would I want to blow a large amount of my savings on something I don't need.
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In hindsight of being almost the complete opposite of this and at times reaching over £100k owed on cars, I can say this is good advice! Scratching an itch is a temporary feeling and if you've over stetched then that will outlast any honeymoon period for sure.
 
bl0at3r said:
To those that keep saying just pay the minimum deposit - I don't understand? All the finance calculator examples I have seen - if the deposit is £1000 then the monthly payments are say £379, if the deposit is £5000 then the monthly payments are around £240. Either way the end amount I will have paid after the finance term is the same?! Me no comprede :(
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Ok I'll try and break it down. If you buy a car today on pcp and the deal is Deposit 5000 Monthly 240 GFV 4000 At the end of the term to have the same deposit and keep the payments the same you would need the car to be worth 9000. Anything less and you either have to accept the higher payments or find cash. Alternately if you went this route Deposit 1000 Monthly 360 Gfv 4000 At the end of the term you would need the car to be worth 5000 to have the same deposit again, which is more realistic. Alternately you still have the 4000 (+interest) left to pay the gfv or subsidise the next deposit if needed. I would strongly advise against the higher deposit unless you know you can save the same over the term of the agreement, and even then if you can do this, you afford the higher monthly and spend the 4k on a shiny canon 5diii and maybe even add a 70-200 L is ii (or whatever the Nokin equivalent) :-)

Edit: for those who focus on total amount payable, don't read your mortgage paperwork :-)
 
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