Best way to own a car, financially?

rp.

I have not owned a car for the last two years. I am now considering purchasing a car. I would most likely only need a car for the next 12-18 months.

I would want to buy a relatively new car. A car in the £20k region would be nice.

I am considering what might be the best way to fund a car purchase. As far as I can see it, there would appear to be three main methods:

1. Purchase outright in cash. By cash, I mean by debit card, not a duffle bag of sequential notes! In terms of cash, I would be restricted to perhaps £1k. So not a particularly feasible option.

2. Purchase using a temporary loan. Borrow £20k, unsecured. Set the payment term to be as long as possible. Make the monthly payments. The long-term view being to sell the car and repay the loan in full using the depreciated vehicle value. That value would be offset by the payments already made against the loan. My question on this option, is whether it would be a cost effective method?

3. Acquire the desired vehicle on a short/mid-term leasing arrangement. Pay the monthly amounts. End the contract when I no longer require the car.

Does anyone else think about financing a car in these ways? What is the view on the most cost effective way of owning a vehicle? Is one of the above three methods a good idea? Or is there a better idea which I've not covered?

I look forward to hearing all thoughts and comments.

Conor_3

Forget spending £20k. Buy something around the £4-£5k mark and sell it on.

Why does it have to be newish if you're only going to have it a year?

epz_2

there are 3 main components to the cost of car ownership.

1) tax and servicing, obviously a big v8 is going to cost more in spark plugs than a wee 1liter but if you aint using main dealers there isnt really that much difference in price. by that i mean premium brand parts might cost a bit more but also last a lot longer.

2) fuel economy, obviously this is down to your personal circumstances. in my situation i have a works vehical so drive a very short distance and mostly for fun, in my situation it is perfectly reasonable for me to be looking at cars with 5liter engines but if you plan on doing mega milage you need to chose the car with care. most people i know do say 4k miles which isnt that much to really bother about fuel consumption.

3) depreciation, now obviously the newer the car you buy the worse the depreciation will be so you need to read up on the resale value is likely to be and how desirable it is going to be ie avoid noname brands that drop like a stone.


you didnt mention what you were after but frankly 20k is a serious chunk of change to blow on a car you will be getting rid of in 18 months, £5k will get you a 5 year old bmw 5 series, one of the best cars in the world, they last for ever and you can resell them at the drop of a hat.

if it were me(1) i would get a 0% overdraft and get a 10 year old bmw 740, they go for £1800-3000 and have everything modern cars are starting to get, last forever, could drive through the side of a house, it would mean no interest on the loan, negligable depreciation and the savings would vastly outweigh the extra petrol you use but it depends on you mileage, tasts and ablity to handle such a powerfull big brute.


(1) in that position, frankly im getting a merc w126 sec, w140 cl or s next and thats it.

fox2319

If you only need a car for that sort of time, how about leasing it?

Not sure of the best companies to look at though.

rp.

epz wrote: »

...if it were me(1) i would get a 0% overdraft and get a 10 year old bmw 740...

Almost two years on, this is still some of the best advice I have ever read on any forum!

Thank you, Sir!

harveybobbles

epz wrote: »

if it were me(1) i would get a 0% overdraft and get a 10 year old bmw 740, they go for £1800-3000 and have everything modern cars are starting to get, last forever, could drive through the side of a house, it would mean no interest on the loan, negligable depreciation and the savings would vastly outweigh the extra petrol you use but it depends on you mileage, tasts and ablity to handle such a powerfull big brute.

You can get S reg 7's for about 1000. They look like a lemon, but are one of the best cars out there. Apart from the 5 (96-2003 MY)

whitewing

This is great, I love it when threads get updated. (Even if they are about cars)

AdrianHi

rp. wrote: »

Almost two years on, this is still some of the best advice I have ever read on any forum!

Thank you, Sir!

So you have had a 740i or similar for the last 2 years I take it?

Dave101t

get a company car, mine works out at 160 quid/month in extra tax deductions but i can use all the diesel i want for free!

Ukuser

perhaps a lexus ls430?

cheap as chips these days
reliable
powerful
smoth
quite
less depreciation

£10-12K will buy a mint 54 plater with 70k miles!