New or car, lease vs loan vs PCP?

bigadaj

TheCyclingProgrammer wrote: »

You've got to draw a line somewhere. I have no desire to continue sinking money into an 11 year old car I'm afraid.

Doesn't need to be continual repair or a nearly new car, particularly as your mileage is very low.

Why not buy a higher mileage older car, if it's been looked after and serviced then it's relatively low risk, your low mileage will then pull it back towards average mileage over time.

If you work out what a nearly new car would cost you per mile, including loan costs, then that could be a shock, particularly as you still have maintenance and servicing costs and still a low risk of major repairs on a newish car after a year or two when the manufacturers warranty expires.

TheCyclingProgrammer

bigadaj wrote: »

Why not buy a higher mileage older car, if it's been looked after and serviced then it's relatively low risk, your low mileage will then pull it back towards average mileage over time.

If you work out what a nearly new car would cost you per mile, including loan costs, then that could be a shock, particularly as you still have maintenance and servicing costs and still a low risk of major repairs on a newish car after a year or two when the manufacturers warranty expires.

I'd feel more confident with a car with lower mileage; our own low mileage will only help with residual value over time although given the length of time I intend to keep the car, residual value isn't high on my list of priorities.

It's not too difficult to calculate the rough cost of what the car will be.

For example, we're now swinging heavily in favour towards the Hyundai i30 and I can get a 1 year old i30 with about 10-15k miles on the clock from MotorPoint for £9999, representing a £1k saving over the Focus we were looking at. We could even go for the entry level trim and save another £1100 if we wanted.

We have access to a £2k deposit leaving us to find at most, £8k. On a personal loan, we're looking at about 4.5 to 4.9% over 3 years which will cost us about £500-600 in interest. There's also a good chance that we'll be able to make some overpayments and end the term early.

The i30 has a 5 year manufacturers warranty from new, including 5 years RAC roadside assistance, and we'll get the balance of that if we buy the 1 year old car. 4 years warranty not to be sniffed at and double the warranty on the Focus!

Unfortunately we've missed the chance to get a fixed service plan from Hyundai as the car would have had it's first service already but Hyundai's are supposed to be reasonably cheap to service and repair. Insurance is a bit cheaper vs the Focus OTOH the Focus only has £20 VED versus £125 for the i30. The Hyundai should be more reliable in the long term.

So lots of pros/cons, but the important thing is we can afford the monthly loan repayments (it only eats away about 25% of our monthly disposable income).

TheCyclingProgrammer

Thanks for the input so far; in short, we've at least managed to rule out PCH lease and buying a brand new car.

The cost of a nearly new car is still not cheap and in an ideal world I'd rather be spending half the amount on a car but there is a degree of comfort in having a nearly brand new car with some mod cons and low mileage.

So I guess I've answered my question - by far the cheapest way for us to fund the purchase is deposit + personal loan. PCP is too expensive unless you intend to hand the car back at the end or part-ex for a new one. We'd rather pay for the car outright over 3 years and then keep it for as long as it lasts - having a new car on a regular basis isn't important to us. If we can keep the car for a minimum of 5 years, but ideally 8-10 years, then I'll be quite happy. If we get even £1k for the car at the end of this period, it will be a bonus.

It's worth noting I completely agree that cash is by far the best way of buying a car and we really had intended to buy a new car in a few years time after saving up. Given we have a wedding to pay for and are planning to buy our first house later this year, buying a new car was *not* on the list of priorities, but the bad timing of my car dying has forced our hand a bit.