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Scrappage vs. Buying 2nd hand, which is better?

Hi everyone, I would most appreciate your advice / opinions on the following:

I have an old Peugeot 106. I have put it in for an MOT and it will cost £600 + to get it through. Most of the repairs are to do with worn parts (notably brake pads). However, there was rust noted. It easily qualifies for scrappage (assuming I get it through the MOT).

The garage is of the opinion it is still a good car (good engine, low mileage for age, 85, 000 N Reg, bought from new by myself)

He says should keep it - but of course he may be biased! (As might end up a regular)

Car has never broken down on me so in this sense has been a good car, but am I correct, once you get rust, it only gets worse, right? So I would be best getting myself another car, correct?

If so, is it better to go for scrappage or a 3-4 year old car (due to depreciation)

I have in mind the Hyundai i10 (has good reviews, 55 mpg and low tax bracket plus 5 year warranty- with scrappage list price is £5,100 (entry level model £4,995). I might be able to haggle this down to £4800 and probably could put down half this and take the rest out of my mortgage which i overpaid, would then pay off in 10 months or so.

\what I like is that it would take the worry out of MOT and service that i would still have with an older car

Also, I know 0 about cars, so scared I might get ripped off if I buy 2nd hand.

Do you agree therefore for someone in my situation this is the bst option?

The reason I ask is I read something about experts saying that scrappage is not a good deal as the £2000 is eaten up by deprciation : But surely new is still better than older due to less likely to need repairs and less likely to buy a pile of junk if buyer has no knowledge of cars?

THANKS IN ADVANCE , superb list ..keep saving..

PS Of course I probably shot myself in the foot by not considering this BEFORE my MOT was due, but fasir enough, my fault for reading carefully ToC that valid MOT needed! Still £600 maybe still worth it to get the scrappage

(previously posted this as a reply but re-posted as new thread as it is a slightly different topic to last scappage thread -hope I get more replies this way :T)
..but maybe not at 1.00 AM :eek:
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Comments

  • Hintza
    Hintza Posts: 19,420 Forumite
    10,000 Posts Combo Breaker
    All you can do is work out the sums.

    You have 2 or 4 variables

    1. Keep car
    2. Buy 2-3 year old car
    3. Buy under scrappage

    Option 1 will be the cheapest but at some stage you will have to replace with similar at around £1k but hopefully that will be deferred for at least 12 months after your MOT.

    Option 2 should still work out cheaper BUT if you get a lemon it could cost you money. You still have the expense of MOT's and it is out of warranty.

    Option 3 (probably quite a long wait for delivery) should really be the most expensive option but it might be worth it for peace of mind.

    From reading your post again you seem to know the pros and cons so it really depends on the desire. The most sensible option is to keep sticking money into your mortgage and run the banger but not much fun in that.

    One thing if you choose one of the more popular scrappage cars I very much doubt you will get any more discount.

    Edit:-

    There is one other option buy a pre-reg or nearly new but they seem overpriced in comparison to scrappage cars but keep it in mind in case you see a good deal.
  • theres plenty of life left in that pug, its on a N plate and has never let you down, i would keep

    They are very good with rust, look at a 5 year old KA, this will have more rust than your 95/96 Pug

    Brakes will wear on anything, goto a second garage for a quote explaining what the situ is, besides if you have to have an mot to put it through the scrappage scheme you would be foolish to spend the money out and then scrap it

    I would at least keep it running until you NEED to get rid
  • AdrianHi
    AdrianHi Posts: 2,228 Forumite
    An i10 1.1 Classic can be traded in for about £4000 may be £200 more when it is 1 year old. So about £700 to £1000 depreciation in year 1, average depreciation over 3 years per year realistically £800.

    And your spending £600 to repair the Pug.
    ... and £55 for an MOT
    ... and £100 for breakdown cover
    ... and ? for other maintenance a brand new car will not have (brake pads that will last years)
    ... and £125 road tax vs. £35 on the new i10

    So do you want to pay £845 in maintenance, MOT, higher tax disk costs etc. on an N reg. 106
    or
    about £800 a year in depreciation + £100 finance charges (mortgage interest charge of £5000?) on a new i10 (or similar) that will not have anything of that £845 expense the old Peugeout has?

    Yes the £2000 scrappage bonus will be eaten by depreciation over 3 years, but the alternative appears to be about the same amount eaten up in higher maintenance and running costs on the old car.
    Hindsight is a wonderfull thing, would have been better to get rid of the Pug before MOT time IMO.
  • Inactive
    Inactive Posts: 14,509 Forumite
    AdrianHi wrote: »


    Hindsight is a wonderfull thing, would have been better to get rid of the Pug before MOT time IMO.

    As well as before the greedy car manufacturers / retailers starting milking the system with radical price increases.
  • AdrianHi wrote: »
    So do you want to pay £845 in maintenance, MOT, higher tax disk costs etc. on an N reg. 106
    or
    about £800 a year in depreciation + £100 finance charges (mortgage interest charge of £5000?) + the £650 to get the old car through the MOT + the increased insurance cost (I presume you have 3rd party F&T but would switch to comp on new car?) on a new i10 (or similar) that will not have anything of that £845 expense the old Peugeout has?

    I have a 1991 Peugeot 205 - rust has never been anything to worry about.

    I am also thinking about possibly getting a newer car at some point and think it is better to get a 2-5 yr old car (top spec) for 2k to 3k rather than getting the entry level junk that I could afford with the scrappage deal.
  • AdrianHi
    AdrianHi Posts: 2,228 Forumite
    edited 29 September 2009 at 10:34AM
    I have a 1991 Peugeot 205 - rust has never been anything to worry about.

    I am also thinking about possibly getting a newer car at some point and think it is better to get a 2-5 yr old car (top spec) for 2k to 3k rather than getting the entry level junk that I could afford with the scrappage deal.

    I understand the OP cannot avoid the bill to get the Pug through the MOT this time around, I'm suggesting that if around £600+ a year is what it's costing to keep the old car going it is barely/not worth it.
    The OP was also going to put the car purchase on the mortgage and then overpay the mortgage (best way short of paying cash or getting 0% finance) so they had no problems meeting the purchase price.
    My point of view is the purchase price is not the real cost, depreciation, the cost of funding the purchase price (interest charges) and other running expenses is the real cost.
    If funding a car younger than the 2 to 5 year old your considering is too much of a strain on cash flow it's understandable you don't want to go for a younger one (I certainly wouldn't in those circumstances).
    The point I make is the 2 to 5 year old car is going to cost about the same in depreciaiton + other running costs as the 1 year old / nearly new or new car with big (possibly scrappage) discount.

    I would not assume insurance on the new car is going to be more expensive, it might be cheaper. The value of the car only makes a difference if it is over £30,000 for most insurers and the difference between TPFT and Comprehensive is negligable and some people even find comprehensive cheaper - unless you are a young and inexperienced driver.
    3.5 years ago I traded in a car for £1500 and bought a new one (I know, never buy new ;)) for about £27,500 and the insurance went down by £20 a year, similar type of car, same power output.
  • bryanb
    bryanb Posts: 5,025 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Another alternative, sell the PUG as is, Buy the Hyundai new without scrappage after beating down the price.
    This is an open forum, anyone can post and I just did !
  • Hintza
    Hintza Posts: 19,420 Forumite
    10,000 Posts Combo Breaker
    bryanb wrote: »
    Another alternative, sell the PUG as is, Buy the Hyundai new without scrappage after beating down the price.


    You might get a tiny bit off the RRP but they are selling these faster than they can build them so no incentive for dealer to lower the price.
  • One other thing not mentioned is that the OP stated that a lot of the cost of the MOT is worn parts. Therfore he could easily have a big cost this time but then sail through the next one (or two) at not much cost. That is what happened to me - had a £600 MOT on my 8 year old Clio but then nothing at all on the next one.

    I like Adrian's posts (not just in this thread) and think they are very informative but on this one the depreciation v's maintainance might not add up.
  • But if they dont go scrappage they have a far better choice of cheap cars.

    For example I'd imagine a 6-12 month old style ka or fiest could easily be achieved for 4-5k with a good warranty and spec etc.
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