New Yaris on finance good idea?

emmajt81

Hi all


I have read through a lot of posts on finance and PCP but wanted an opinion on my situation.


I currently have an 03 plate Clio. It's my first car and I've had it for nearly 4 years. I've had a few problems with it, had to fork out a lot for a new sun roof as it was leaking (I think £600 inc labour and parts), had some starter engine problems and had to pay out for a few repairs on my last MOT which were a few hundred. I paid £3400 3-4 years ago for it and it's likely worth about £1500 now. Although I had the sun roof fixed it's still leaking inside, could be the door seals, but with it being worth what it's worth there is no point me spending more sorting it out. Other than that its got low mileage (33000) for an older car and is fairly reliable. Still gets the odd starter problem now and then.


My tax is up in April which is £190 a year (a lot) and my MOT and service is due in May so I am looking to replace it before I have to fork out for that too. I always wanted a Yaris and have been to a Toyota dealer. The model I'm looking at is £14665 all in (extras included). They are trying to push PCP at me, which I didn't understand fully til now. My Dad keeps saying it's not a good idea because you don't own the car, even if you do HP you don't own it til the end of the term.


I would be trading in my old car and putting £1000 cash down. I have a couple of credit cards (a couple of thousand on them nothing much) and a mortgage so not sure if I would get a bank loan for the difference. Obviously I don't think it's wise at the end of the PCP term to give the car back because the thousands you've spend are just gone with nothing to show for it, I would pay the balloon amount at the end and own it and have something to show for my payments.


Obviously I would have no MOTs for 3 years (saving say £150), free insurance for a year (circa £500 on my current car a year) and it will be under warranty so hopefully no repairs to pay for.


I have asked a few people if they think PCP, HP or a bank loan is the best route to go down (I don't have cash to buy it outright) but everyone gives me a different answer. Any advice/tips would be appreciated!

I don't know very much about cars or finance and am quite new to all this!

TeamPlum

Hi,

It's all about personal preference. Personally, I would never go near finance - but you might be happy to. If my advice is worth anything -make sure you can afford it. Be aware they will probably add some restrictions to the car (can only do so many miles a year, have to have it serviced and so on).

Also, be aware that should (god forbid) you crash, and the car was to get written off - you will still have to pay the finance off.

My personal preference would be to save up for it, if possible, as then it will be all yours, and no hassle.

My own personal belief about all finance deals, and bank loans and things of that nature is: They are businesses. They arn't in it to make you money/happy.

Just go in with your eyes open.

daveyjp

Almost £15k for a new Yaris, are they really that much? Borrowing a load of cash in an attempt to save money when running a car is a false economy.

As all Toyotas now come with a five year warranty find a two year old Yaris, you will save yourself thousands and can use the savings for the running costs.

Netwizard

As above really. If your buying because you fancy a change of car, then fine

BUT if your buying on the assumption you will save money, forget it.

You might be saving a few quid on the tax, the odd few hundred quid in repairs and servicing (which won't be free, it will just be included in the price of the car), but your spending a shed load in monthly payments.

Keep the clio, service it, fix it when it breaks, and save your money

emmajt81

thanks guys.


Question on PCP now you've said that above. Say I took this out, for 36 months and after 20 months the car was stolen and I had to do an insurance claim. As I understand it the insurance company would pay the money to Toyota Finance. Now, if in those 20 months I'd paid off £7000 and only owed Toyota £8000, and the market value was say £8000 and it fully paid off the finance deal - great. But a) what happens to the £7000 I've already paid in my monthly payments and original deposit I put down? do I get that back? and b) if the market value was £10,000 and I only owed Toyota £8000 do I get that £2000 shortfall myself?


That worries me a bit!

F1F93

What happens with insurance depends on the policy itself. Some will pay off the finance directly, and give you any extra. Some will pay you the whole lot, but you've still then got the finance to pay for.

Also consider getting RTI GAP insurance. In the event of a claim, the GAP insurance will pay the difference between what your insurance pays and what you paid. For example, if your insurance gave you £7000, GAP insurance will pay you £7665. Buying a new car, you will probably be in negative equity for a few years, and GAP insurance protects this.



TBH, as said, you will likely not save money by buying a new car, but the main advantage being that you will know exactly what you have to pay when. You may end up paying a bit more, but at least you have a nice new car.
Alternatively, consider a nearly new (ex-demo) model. This will still give you all the positives of a new car (reliability, no MOT, warranty etc) but the bulk of the depreciation is already done.

How about this?
http://usedcars.toyota.co.uk/used/Yaris/1.33-VVT-i-Trend/Inchcape-Toyota-Oxford/Kidlington/3433221-604176476-1323197.aspx?srcmdc=se_na_re_

Barely any miles, a top of the range model and four years warranty left, and also 6 grand less than yours.

With a £15K "Trend" model, with your car and £1000 as a deposit, your monthly payments would be £180 for 4 years, with a £5000 final payment. For the one year old model above, it cost £9000, but its still worth £5000 after three years, meaning a net price of £110 a month. Obviously you need the money upfront, though.


Hope this helps!

emmajt81

thanks for all the replies. I am looking into pre registered cars and possibly year old cars as well as new. just not sure on this PCP thing but obviously if I bought a new car it's 0% on a PCP loan right now with Toyota so you'd save there. need to have a think some more but thanks for thoughts.x

gilbert_and_sullivan

Factor the strong possibility of increased mortgage interest rates, and any other rates that are variable when you do your sums.

By the way, as for the problem with your sunroof on the Clio, get some clear silicone sealant and run it round the gap, no leaks again.

Depreciation and interest paid on a depreciating asset on the new car will make the savings on VED, repairs, fuel saved etc pale into insignificance.

forgotmyname

http://www.autotrader.co.uk/classified/advert/201310309540369/sort/default/usedcars/make/toyota/radius/1501/onesearchad/used%2Cnearlynew%2Cnew/model/yaris/postcode/ng147da/maximum-age/up_to_1_year_old/page/1/advert-type/standard-listing?logcode=ucbnp


Few around at less than £9000. With neglible mileage. Want a top spec one add 10,000 miles and your not far off.

They they are either discounted a fair bit or lose a lot of money quickly?

roddydogs

Be aware that even the 1.3 with stop start/£25 RT is so de-tuned in order to get the tax down, it cant pull the skin of a rice pudding.

skivenov

The 100hp 1.33litre Petrol is quite a nippy thing if there's only one or two of you in the car, and certainly as quick as it needs to be. 3+ adults in, it runs out of steam.

forgotmyname wrote: »

http://www.autotrader.co.uk/classified/advert/201310309540369/sort/default/usedcars/make/toyota/radius/1501/onesearchad/used%2Cnearlynew%2Cnew/model/yaris/postcode/ng147da/maximum-age/up_to_1_year_old/page/1/advert-type/standard-listing?logcode=ucbnp


Few around at less than £9000. With neglible mileage. Want a top spec one add 10,000 miles and your not far off.

They they are either discounted a fair bit or lose a lot of money quickly?

Enterprise Rent a Car had a lot of Yariseseses before Christmas. I'm not saying they're all ex-hire cars, but the signs are there.