To trade up or to not trade up

dcouponzzzz

Hey all,
So I'm concerned that my car's a money pit, and was wondering if trading up would actually save me money... Could anyone provide advice based on the below info? My finance with Tesco bank has an option to increase my loan at 3.6% , although that was what I applied for when I was given 7.8%...
I'm not sure if a golf or clio would end up costing less per month..

64 mile (return) motorway commute (weekdays)
Current car:
Renault Megane 2011 1.6 petrol
2nd May 2014 Purchase date
£7500 finance @ 7.8% over 5 years
£157 Monthly payment
£7094 Remaining debt
£5995 Current car value
45 months remaining

35mpg Average
£55-60 paid at pump weekly
£180 p/a road tax
Approx. £400 per month total spend before insurance (£1250 paid lump sum @ April - 26 male 2nd year of license, didn't accumulate no claims last year)
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Desired Car
VW Golf 1.6 Bluemotion
£10995 cost
75mpg average (if HJ is as honest as he says, 60mpg with £35p/w diesel)
£28 paid at pump weekly
£20 Road tax
______________________
Backup car
Renault Clio 1.5 DCi
£9500 Cost
70mpg average (HJ's 64.4)
£30 paid at pump weekly (£32 according to Honest John)
£0 Road tax

worried_jim

VW Golf 1.6 Bluemotion

real world likely mpg-58mpg.

http://www.honestjohn.co.uk/realmpg/volkswagen/golf-vii-2013/16-tdi-bluemotion

Recalculate your spend using this figure.

dcouponzzzz

Cheers Jim, I live less than a mile from the m62 and it's a straight line into manchester, I don't believe I would benefit from averages including city drivers! On the rare occasion I do city driving my current car only hits 20-25mpg I'll definitely look into it with your link though, thanks

AdrianC

First off, revisit those average fuel consumption figures. No way on this earth will you get a REAL 70/75mpg. A quick look at Fuelly shows 60 (Golf)/57 (Clio) as longer term real-world averages.

Your fuel cost currently is about 40% of your total spend. Diesel is more expensive than petrol per litre. Reducing your fuel spend and VED will save you, say, 15% on your total. Now add in the extra finance cost and, probably, insurance. You're currently a fair way down the depreciation curve - almost at the peak (nadir?) of negative equity, probably - and you're trying to jump back up it a notch or two.

You don't mention maintenance costs at all - but the Megane will be a considerably simpler car than the others. 15k/yr isn't a massive mileage, but 30+ mile m'way runs should reduce the risk of DPF problems.

dcouponzzzz

Thanks Adrian, I looked into it and the real world mpg for the clio is at 64mpg which isn't so bad. Regarding maintenance, my Megane hasn't hiccupped even once and I've only had a minor body repair of £150 for my own mistake very early on.
So would the conclusion be that I'm locked into this situation until my remaining finance and car value hit roughly the same amount?

AdrianC

dcouponzzzz wrote: »

Regarding maintenance, my Megane hasn't hiccupped even once

Umm, I meant maintenance... You know - servicing, tyres, brakes, that sort of routine maintenance that every car needs every x months/y,000 miles...?

So would the conclusion be that I'm locked into this situation until my remaining finance and car value hit roughly the same amount?

That depends on what your aim is. If your aim is to reduce your costs, then re-work your numbers. If you got an APR of twice the headline last time, get a definite quote this time.
If you're looking for justification for wanting to change car, just decide that's what you want to do, and don't try to dress it up. But remember a Clio is smaller than your Megane, if you're spending a couple of hours a day in it...

dcouponzzzz

Well maintenance would be the same cost regardless of the car, that would be a set £200-300 p/a and anything above that wouldn't fall under annual recurring cost. In fact I could get a 2014 Clio for 9500 which would be excluded from MOT's for 2 more years and have no upcoming mileage service requirements.

I am aiming to reduce the monthly outgoings yes, I'm young and naive and completely clueless about finance but I'm trying to change that now. Is it even a possibility to make an 11k payment on a credit card with 0% finance and juggle that about until it's paid off through direct debits?

I love my current car and would begrudge selling it, I'm not doing this because I need justification for a new car but because I believe I c0cked up buying it in the first place. I can spend up to 4-5 hours in the car daily depending on traffic etc so of course I'd prefer the Megane.

dcouponzzzz

Update* I contacted my loans company and to increase to 11k I would pay £209 p/m and receive 4.4k cash towards the new car. Including trade in value of my car this could be 9.5-10.5k budget, meaning I could afford the Clio at least. With the petrol costs reduced to 31.50 a week from 50-60 I could save up to £100 by paying an extra 52 for the loan. so net saving £48 a month before the reduced road tax

dannyrst

If you want to save on your monthly costs, why not buy a cheaper car?

If you like the Megane more than the Clio yet you are still willing to get rid, surely you aren't too bothered about what car you actually drive (the cheaper the better).

So going and spending £9k-10k on a Clio that will be worth £6-7k a year later seems like a waste of money to me?

dcouponzzzz

Cheers Danny, I definitely do like the megane more but I still need to enjoy the car I'm driving for a good portion of my day. To get the cheapest insurance/tax/running price then eco-cars from the past 3-4 years seem the best option.

You make a good point on the Clio's depreciation, which is why I include the Golf. I'd prefer the Clio for what it is (and the higher mpg), but the golf will depreciate much slower.

To add, I'm not in such a situation where I'm living beyond my means, but I'm right on the line. I'm considering this alongside many other money saving ideas to be able to open a savings account which isn't currently possible. All money saved on this won't be touched.

dannyrst

A quick look on AutoTrader suggests a Clio 1.5 Diesel 07 Plate with around 60,000 miles is £3,500 along with full service history, 12 month MOT etc etc.

If you have money that you can spend on a car, you get one you like. There's no point spending more than you absolutely have to on a car if you can't have one that you really like.