Outright car ownership: Is it still viable?

albionrovers

EdGasket wrote: »

I paid £1,000 for my car 7 years ago. It's just passed it's MoT again so good for another year. It's a Hyundai Lantra; absolutely bullet proof; excellent car. The tax and insurance costs more per year than the depreciation by a long way.
If you lease a car you have to fix any scrapes and scratches before returning it otherwise you get charged a huge wedge. Read the terms and conditions carefully.

While this is undoubtably true, it is all sales driven. I got 3 of my 4 return charges waivered very easily after I refused to pay them. I think the companies try it on initially.

Mr_Mink

Wh05apk wrote: »

But presumably after 3 years you would own the car? also you would not need to factor in depreciation, as this is not another up front cost, which you only realise when you sell the car, so possibly in your example, you may have paid £7,000 for the car, but could then sell for say £4,000 in 3 years time, effectively reducing the annual cost to ~ £3,000, also what is £800pa? surely not a service plan for an UP, even at VW rates that seems ridiculously high?

The other £800 was in reference to it costing about £800 a year more compared to the second option (lease car). The service plan on the Up was a cracking value £99 for 3 years. Regarding ownership, there's a 4k ballon payment if I wanted to buy the car at the end of the term (that's what I get for ticking the options list a load ). So far after 19 months there has been the freefall of depreciation which is a rather eye watering 5k (ish) but that's leveled out over the past couple of months.

Cornucopia

Interesting... looks like you can PCP/Lease used cars.

e.g.

Vauxhall Insignia 2.0 Cdti Sri [160] Auto 2010

18k miles


£890 deposit
36 x £163
£4045 balloon payment

Mr_Mink

My understanding is you can PCP a car that is under 3 years old or has done less than 60,000 miles. At least that was the case when I bought a Mazda on PCP (provided by Santander) about 4 years ago.

Iceweasel

I look at it this way - the actual amount of depreciation doesn't bother me in itself - I look at the cost to replace with another similar or better vehicle.

After many nights of calculations spread over about 4 months checking prices and trends I concluded that the best way forward, for me at least, and my circumstances was:

Buy a car at around 2 years old, which on average seems to be at 50% of it's original cost.

Sell it at 5 years old and then start again, with another 2 year old.

I reckon on needing around £3000 to make the change - so if you like that's depreciation of £1000 a year.

I take out a 2 year service deal - £410 - a one off payment.

A £35 monthly paid warranty and breakdown policy - only needed for years 2 and 3 - total £840

Tyre Insurance for 3 years - paid monthly - total £429

I can handle these costs easily.

I always have a car between 2 to 5 years old.

Buying a new car every 3 or even 5 years with the horrendous depreciation it would suffer would be financial suicide for me.

Herzlos

There's definitely still value in buying outright, though it makes more sense the older the car is.

For example, I bought a 5 year old car for £5500 and sold it 6 years later for £500, giving depreciation of £67/month, and have now bought a 6 year old car for £4000 and if I keep it for another 4 years even if worth nothing I've only spent £1000/year.

If I was going for a brand new car (out of my budget anyway), I'd consider PCP's, but I tend to hold onto cars for a long time so I'd probably want to keep the car at the end of the deal (it's got a known history and been looked after), so financing it to own outright would probably make more sense.

motorguy

Cornucopia wrote: »

Interesting... looks like you can PCP/Lease used cars.

e.g.

Vauxhall Insignia 2.0 Cdti Sri [160] Auto 2010

18k miles


£890 deposit
36 x £163
£4045 balloon payment

A PCP plan is different than a lease plan. There is no balloon payment option at the end of a lease.

motorguy

Herzlos wrote: »

There's definitely still value in buying outright, though it makes more sense the older the car is.

For example, I bought a 5 year old car for £5500 and sold it 6 years later for £500, giving depreciation of £67/month, and have now bought a 6 year old car for £4000 and if I keep it for another 4 years even if worth nothing I've only spent £1000/year.

If I was going for a brand new car (out of my budget anyway), I'd consider PCP's, but I tend to hold onto cars for a long time so I'd probably want to keep the car at the end of the deal (it's got a known history and been looked after), so financing it to own outright would probably make more sense.

Yes, buying new, and it can make sense to lease or PCP. For example my wifes z4 was £36,000 list price. It makes sense for her just to pay a monthly payment

The older the car is, the less viable a PCP or lease becomes.

londonTiger

Ebe_Scrooge wrote: »

But at least buying outright, you own the car, albeit it depreciates. If you lease, you still have (similar ??) payments each month but own nothing.

Not forgetting that at the end of your lease they'll probably fleece you with wear and tear charges. Things that you weren't even responsible for like other users swinging their door on you as they open the door.

UncleZen

Weird_Nev wrote: »

BMW 328i - Bought for £700 with 160,000 miles on it, sold after 2 years and 18,000 mles for £700!

So, you "clocked" it then?