Electric car for more debt vs ICE car with more outgoings

Angus_mcfisher

Hi all,

I’m in a bit of a pickle at the minute. I'm earning around £27,000 and have a car on PCP which has become uneconomical both in terms of monthly payments and fuel because I'm now doing around 70 miles a day commute. So I'm looking at changing, but I'd have around £2000 negative equity.

I've been considering getting an Electric Ioniq and have found one for £20,000 which works out at £450 a month over 5 years on a personal loan. At work there's a couple of free chargers (£29 a year GMEV scheme) so I essentially wouldn't have any other outgoings.

On the other hand, I could get a much lesser car say around £4000, plus the £2000 negative equity, plus interest, plus the cost of fuel which I've worked out would be around £2300 a year. In the same 5 year time frame, that adds up to £18,000 and I've had the horrible experience of being in a rubbish car over that period too. That's not to factor in that I'd have the intention of keeping the electric car for more than 5 years either.

The dilemma I'm having is if I go for the electric, whether having that much debt against my name, even though the monthly outgoings would only be £450 because I won't be posting for fuel, whether that would be viewed negatively when applying for a mortgage in the next year or so.

Can anyone offer some insight please?

Many thanks

ginashamz

You mean a hybrid car, not an electric car.
Why don't you buy a car under £2k and run it to the ground. You'll save a lot more in the longer term.

Apodemus

As far as I am aware from my limited use of an Ioniq, if you are commuting 70 miles, it is unlikely that you will be travelling the whole time in electric mode - it will go to ICE mode above about 30mph or if you are not very careful under acceleration from rest. So you will need to continue to factor petrol costs into your calculations.

Scrapit

Are you sure it's the plug in hybrid for 20k? Also 20k for 450 per month for 5 years is dear, I've got more than that on HP for a shorter term for a bit less.

Angus_mcfisher

Hi all,

Many thanks for your replies! It's the full electric Ioniq that I was looking at.

Also, in terms of the loan being expensive, that's because the £2000 negative equity from my current car has been added.

Many thanks for your time

Lee

ginashamz

The full electric one isn’t £20k. Try £28k

rhysadams

I'm a big fan of electric cars and I know someone who uses one every single day for commutes, etc. He does plan his day around charging, but works out well for him.


With regards to your negative equity, might be worth looking at the contracts. There is sometimes a clause where you can hand the car back after paying £x - Might be a good way out. I had to do this with an Audi A6 a few year ago.

Herzlos

On £27k you're not going to get a bank loan for £20k, so that's a busted flush. Even if you could, it's a terrible idea if you're looking to get a mortgage during the loan term because you've knocked £450/month off your affordability.



What you could do, is look for a used Leaf/Zoe , both of which will be able to do your commute easily if you're charging at both ends. You can get Leafs from about £6k now.

DrEskimo

I don't think theres much chance that members of MSE are going to be recommending that someone borrow over 80% of their gross annual income to buy a car....

I'm an advocate of EVs. Bought a used Zoe last month in fact. But I paid cash and it's less than a third of my income!

You could look at the cheaper Leafs and smaller battery Zoe's, but they will be on battery leased, and with your mileage (in fact I argue at any mileage) the battery lease model makes no financial sense.

I think the sensible thing is to buy a cheaper car and save that £450 per month for a year or so and then upgrade when you need to, using cash.

scaredofdebt

I'd consider leasing an electric car, your costs are fixed and it's going to be around £400-£500 for a full electric EV with no "hidden" costs.

If you go for a cheaper ICE then as it ages your costs will go up, repairs, MOTs, etc.

You can get insurance fairly cheaply on a lease so if you lose your job you can hand the car back at no cost.

TheMoonandBack

£450/month is £5400 a year. You can buy outright for cash, insure, tax, fuel and maintain a decent car for that amount of money.
Don’t buy the electric car, you can’t afford it.
I do 70 miles a day commute as well, I would love an electric car but the sums just don’t add up.