Buying a Car - How Do You Do Yours?

anotheruser

I'm a little confused when it comes to buying cars.

I've always bought mine outright but I see a lot of people these days paying a set amount each month. Is this just a finance deal?

Can someone explain hire purchase and if you can still get that these days?
Are there any other ways?

I sort of thought of a model for car "renting" where you'd pay, say £200 a month, then at the end of the term have the option to buy, or receive a new model and pay around the same per month.
If this sort of thing exists, is maintenance paid by the company or the current user?

wongataa

anotheruser wrote: »

I'm a little confused when it comes to buying cars.

I've always bought mine outright but I see a lot of people these days paying a set amount each month. Is this just a finance deal?

Yes

anotheruser wrote: »

Can someone explain hire purchase and if you can still get that these days?
Are there any other ways?

You can still get hire purchase finance.

anotheruser wrote: »

I sort of thought of a model for car "renting" where you'd pay, say £200 a month, then at the end of the term have the option to buy, or receive a new model and pay around the same per month.
If this sort of thing exists, is maintenance paid by the company or the current user?

It exists - it is PCP finance. Maintenance is paid for by the user of the vehicle.

Ebe_Scrooge

I think what you're referring to is a PCP. There are loads of places that offer this. You pay a deposit, then a fixed monthly fee, at the end of the deal ( say, 2 or 3 years or whatever ) you hand the car back and walk away. Or you can take a new car and carry on.


A lot of people like this because it allows them to drive a brand new car, and any repairs are covered by warranty. Personally, it doesn't appeal to me for several reasons :


1. You never actually own the car.
2. I'd never buy a new car anyway, it's an expensive way of doing things.
3. There's a limit on the number of miles you can do, with pretty hefty penalties if you go over the agreed limit.
4. They'll charge you for any damage, little dings or scratches or whatever.


This is just my personal opinion - I'd prefer to buy a decent used car outright, accept that I have to pay for any repairs, but at least I own it. But as I say, a lot of people do like the PCP approach.

bengalknights

I tend to go to local mannheim/BCA auction for three year olds however my family members prefer to get a pcp deal through the local dealerships.

Every one to there own for this really

They both have there advantages/disadvantages

gilbert_and_sullivan

The PCP style renting or buying of new cars, especially if those actually bought have good warranties (so exclude German makers and others), are a fair bet for those with little mechanical knowledge interest or capability for one reason or another, buy a Kia at 2 years old it will still have 2 more years makers warranty than any car with a 3 year warranty, so good sensible savings can be made.

For those who can service and repair most things themselves, then it might make more sense for them to buy older well chosen vehicles, the simpler the better.

As said, each to their own, some people like new cars, some people have no interest in modern cars at all and prefer older designs for many reasons not just cheapness.

giraffe69

When I last bought a new car (early 2015) I could have paid cash. I didn't want a PCP deal but there was a 0% hire Purchase deal which seemed to fit the bill so after the deposit it is being paid off over 3 years.

Bigphil1474

If you work, it might be worth seeing if your employer does a car salary sacrifice scheme (and whether that scheme is any good). My employer has just started one where you get everything included and you just pay for fuel, but it's too expensive for me. You basically pay a monthly fee for the car from your wage before tax is deducted (so you save the tax on that part of your wage). I prefer to buy outright, but my brother is a mechanic and sources decent cars for me based on my budget, so I'm lucky. I usually buy cars for under £1k, run them a few years then scrap them. Splashed out last year (£4.5k), but still prefer to own outright.

motorguy

Ebe_Scrooge wrote: »

1. You never actually own the car.
2. I'd never buy a new car anyway, it's an expensive way of doing things.
3. There's a limit on the number of miles you can do, with pretty hefty penalties if you go over the agreed limit.
4. They'll charge you for any damage, little dings or scratches or whatever.

1. True, unless you pay the final balloon payment. This is also true of HP - you dont own the car until the final payment is made. It suits a lot of people to use PCP as it wraps up depreciation, warranty (if its a new car), service (if they chose a service pack) and usually breakdown cover into one monthly payment.
2. If you've the money and want to, why not? I'm quite pleased that someone had the money and wanted to buy a new 370Z GT, put 9000 miles on it in 2 years, that enabled us to buy it for £20,000! Likewise my £3,500 197. Not sure i'd want to have paid the price of it new, but pleased someone did! :beer: Also, a lot of PCP deals can work out quite cheap compared to even buying a 2 or 3 year old car, over a set timeframe.
3. Theres only penalties if you hand the car back. If you make the final payment or trade the car in then no penalties apply. And also, set it to a realistic miles - if you do 12,000 miles a year, set it to 15,000 so you've a bit of head room. Then theres no issue at all.
4. Again, only if you hand it back at the end of term. And likewise, if you damage "any" car you "own", then you're going to have to pay to have it repaired?

motorguy

bengalknights wrote: »

I tend to go to local mannheim/BCA auction for three year olds however my family members prefer to get a pcp deal through the local dealerships.

Every one to there own for this really

They both have there advantages/disadvantages

+1

We've one of our cars on HP finance and two outright purchases with cash. 5 years ago, we'd two cars on PCP.

Just depends on what you want and what suits you best at the time.

bigjl

gilbert_and_sullivan wrote: »

The PCP style renting or buying of new cars, especially if those actually bought have good warranties (so exclude German makers and others), are a fair bet for those with little mechanical knowledge interest or capability for one reason or another, buy a Kia at 2 years old it will still have 2 more years makers warranty than any car with a 3 year warranty, so good sensible savings can be made.

For those who can service and repair most things themselves, then it might make more sense for them to buy older well chosen vehicles, the simpler the better.

As said, each to their own, some people like new cars, some people have no interest in modern cars at all and prefer older designs for many reasons not just cheapness.

Kia's have a 7 Year Warranty. Hyundai has a 5 Year Warranty, Toyota also have a 5 Year Warranty.

Those are the only ones that I off the top of my head don't charge extra for a Warranty longer than the standard 3 Years.

motorguy

bigjl wrote: »

Kia's have a 7 Year Warranty. Hyundai has a 5 Year Warranty, Toyota also have a 5 Year Warranty.

Those are the only ones that I off the top of my head don't charge extra for a Warranty longer than the standard 3 Years.

Interesting

I would say that PCP deals are less popular with Kia and Hyundai as people know they can run their cars longer, hassle free.