Cheap car advice

Chucky1234

Hi all,

I'm in a bit of a dilemma with regards to my car situation. The situation is as follows;

Just under three years ago I purchased a new Fiesta on PCP. I pay £220 per month and my balloon payment is due in June. The balloon payment is around £6,000.

My car was involved in an accident last month and the car is going to be written off as per the garage, just awaiting on confirmation from the insurance. When the insurance pay out, after deductions, I should be left with around £1k - £1.5k, after paying off the finance company.

Obviously, this is going to leave me without a car so I will need to get one.

My personal situation impacting my car choice is this; I drive around 12k miles a year. My job involves visiting clients so I need a respectable looking car.

My financial situation is that I currently owe around £6k in debt, which is being managed now and will be paid off in approximately 3 years. I am in the early part of my career and I have just signed a training agreement with my company where my salary will increase by £3k per year for the next two years, subject to me passing my exams, so it is possible this could be paid off quicker.

I will list out the options which I find most viable below, along with the pros and cons I can see.

1. Purchase a used car for around £2-3k, by using the £1-1.5k as a deposit and paying the balance at £220 per month. The cars I really like in this price range are BMW 3 Series, BMW 1 Series, Golf, or Ford Focus. I am leaning towards the BMW options as I feel like they look better at this price range, and it looks like you get a lot of car for your money.
   
   The pros to this is that I will have a reasonable car which should last me a few years at least. Also this is a relatively cheap option and would mean once I have paid off the car (which should be in around 6 months), I can then put the £220 towards paying my debt off early, which would drastically reduce the payback period.
   
   The main con to this option is that I don't know what the reliability of the car will be like at this age. I can mitigate as much as possible by ensuring service history etc, but ultimately, I may end up spending a lot in repairs shortly down the line. Obviously increased further if it is a BMW. I have a family friend who is a cheap mechanic however.
   
   
   
2. The second option is to just purchase a car with the cash I end up with, so around £1k, with no finance.
   
   Pros to this is obviously no monthly payment, so I could pay off my debt quicker.
   
   The cons to this is I cannot find too many cars I like for this price range. Also there is a much higher risk of things going wrong on the car, and it is obviously a huge down grade from having a brand new Fiesta. Also as I visit clients as part of my work, I didn't want to turn up in a 15 year old car.
   
   
   
3. The third option is to buy a nearly new car, still under manufacturers warranty. I could get a finance paying around £200pm over a 3/4 years.
   
   The pros to this is obviously I am way less likely to have to fork out on repair costs. It would be similar (or better) than my Fiesta. Also when the finance is paid off, I would still be able to keep the car for much longer, whereas with the other two options, I may need to change my car again anyway.
   
   Obviously, the biggest con with this is that I would be taking on more debt, which seems silly to me when I still have debt.
   
   
   
4. The fourth option, and a bit of a curveball, is to buy the car back as salvage and repair it myself, although it will have a write off marker on it. My dad is involved in the motor trade industry so knows mechanics, and he has got a quote for me of £1,500 if I get the parts. Probably around £2k repair bill. If I'm lucky I may be able to buy the car back for around £1,500. AFAIK, the damage to the car is on the passenger side door, rear quarter panel, under door sill.
   
   Pros to this is I am back in my own car, which I know has been looked after, for around £3k, with no finance on it. I would be happy to keep this car for at least another 3 years, but probably longer.
   
   Cons to this is I would probably have to finance around £2k of that £3k cost, so I am still going to be taking on a little debt. Also the car would have a written off marker on it, so worth less. Also, the risk of the repair not going well. This may not even be possible if there is structural damage however.
   
   

These are all the possibilities I think are most viable at the moment and I would value peoples opinions on them. If possible, I would welcome car suggestions too, along with pros and cons with the cars I was mentioned.

I appreciate everyones help and opinions.

martinthebandit

The important thing to realise is that, at the price you can afford, it is not about cars that you 'like' it's is about cars that are fit for purpose i.e. that it'll keep running for three years or so with minimal costs (and that won't be a cheap BMW, there is a reason they are cheap)

gmm30

Chucky1234 wrote: »

1. Purchase a used car for around £2-3k, by using the £1-1.5k as a deposit and paying the balance at £220 per month. The cars I really like in this price range are BMW 3 Series, BMW 1 Series, Golf, or Ford Focus. I am leaning towards the BMW options as I feel like they look better at this price range, and it looks like you get a lot of car for your money.

A £3k BMW is unlikely to give trouble-free, cheap motoring. Much better chance with a £3k Focus or similar. The last thing you need is an old 3-series presenting bills worth hundreds of pounds every couple of months for expensive repairs and maintenance. £3k should get you into a late Focus Mk2.5 (2010 or so). Avoid the 1.6 diesel and the rest of them don't give much bother. Still a tidy looking car for your clients. Mk3 shape seems to start around £4k at the moment.

parking_question_chap

I think this is one of those posts where the answer really is a Honda Civic.

Dont touch a £3k BMW, unless you like the view from the side of the road and have deep pockets.

chrisw

Are you sure you'll get £1-1.5k back?

This post seems to suggest you might or might not:-

https://forums.moneysavingexpert.com/discussion/5994465/car-stolen-help

mollycat

If your dad is "in the motor industry" then surely this is your golden ticket to getting most bang for your buck alongside the balance of looks/reliability you are looking for?

Hope you don't mind, but I had a bit of a laugh when I read the "huge downgrade....." comment. Personally, I like driving an older, cheaper car with a bit of character, but each to his own

MovingForwards

You want a 'status' car rather than something which will get you around, I understand where you are coming from but I would just buy a reliable, tidy car with whatever money is left from the pay off

Clients don't care what you drive, in the years I've been in legal practice I've rocked up in a modified 88 polo, a golf, a modified new beetle and a classic beetle, they don't care what you drive, it's the advice they are interested in.

chuffniut

Champagne taste, lemonade money.

System

£2k-£3k gets you a dog of a high miler BMW from an era where they were truly a pile of crap. If its an E36 3 series then they suffer from the underside cracking where the rear subframe bolts to it for example.

Tokk

I'd be looking to avoid further finance if at all possible, if I were you...

The £2-3k short-term option really being a halfway house between outright buy <£1k (ie: bangernomics) and buying something that's going to keep you in bills longer term.
There's some sense in this, but I'd personally be looking 10-15 years old and middling mileage at that price - and naturally service history (as noted) is potentially make or break.
I'd personally look at Volvo S40's around '05-10ish - underneath it's still a Focus (and still avoid that 1.6D ideally), but has a little more of the badge snobbery you're after, and often a more complete and preventative-maintenace minded service history (but I've quite liked my Volvo's anyway, so my mind is naturally drawn there)

sheslookinhot

You could consider a leased car.