Car Loan and Savings Advice

rw05

Hello all,
I am just after some of your advice and opinions if I may?
I am in the process of buying my next house, up sizing, with my wife and son. I am in need of a new car as my current car is now very old and I am constantly paying out for repairs.
I am going to be inheriting £10K in the coming months. I was thinking of using half of it to put towards a nearly new car and then finance the rest, around £10K (£15K in total). I would like a newer car as I really don't want to be paying for repairs all the time.
I was going to invest the other £5K of the inheritance.
I'm not sure if this will be the best way to use the £10K. I don't want to waist it. What would be the best way to do this, do you think? Would getting a new car on PCP and then invest the whole of the £10K be better? I have never brought a car on PCP before as I have always wanted to own my cars and I would be worried of going over the agreed mileage and get charged for dents etc and paying all of that interest isn't very appealing 
Also, what would be the best way to invest the inheritance? I know it isn't a massive amount but it's a starting point.
Any advice would be really appreciated.
Many thanks.

[Deleted User]

If you're in the process of buying a house, don't take out any new finance.

Buy the car and in cash and put what you would have spent on the finance into your savings.

You won't need to spend anything like 15k or even 10k to get a very reliable car.

DrEskimo

Borrowing money on a PCP and paying loads in interest in some hope of offsetting that interest in returns on an investment is not a good idea. Leveraging yourself with debt is rarely wise, but doing it with some of the highest cost finance secured against a depreciating asset is very daft...Just pay for the car in cash and go and take out a £15k bank loan..it would be far cheaper...

If you are interested in saving some then you need to buy a cheaper car. It's as simple as that. Getting finance to try and do both is just creating a false illusion you have more money than you do.

In terms of how you invest or save some of the money...well that's a very broad question and probably worth posting in the savings and investment board. It will largely depend on what your goals are, time frame, expectation and attitude to risk.

But I agree with @Deleted_User. Just buy a cheaper car and put away the rest in a Marcus or NS&I savings account, and research what you want to do with it when you have the time.

Aran76

If reliability is what you're after then why not just spend the £10k inheritance on a car. If you are looking into spending more than £10k on a car then you are going into the realms of desirability where a PCP may suit you. A PCP enables you to get a better car for a lower monthly payment, all at a cost of course. As zx81 said, getting your house purchase completed before applying for any new finance is very sound advice.

rw05

Thank you all very much for your great advice. They are certainly some good suggestions that I can act on. I am slightly hesitant on buying a cheaper car as I really don't want to be paying for repairs like I am now. I will definitely be waiting for my house purchase to go through before or even if I take out any loans.
Thank you very much again! 

MinuteNoodles

rw05 said:

 I am slightly hesitant on buying a cheaper car as I really don't want to be paying for repairs like I am now. I will definitely be waiting for my house purchase to go through before or even if I take out any loans.
Thank you very much again! 

So you don't want to pay for repairs but are happy to pay out £100s a month on finance for a car which will undoubtedly cost you more per year and if it's on a PCP deal on a car you don't own that you can only do a limited mileage per year without being charged extra?
If this is being done to save money it's a funny way of going about it.

tlc678910

My friend got a car on pay monthly (I know lots of people do). A couple of years later she was buying a banger for £500 to use as she had done too many miles in the pay monthly car. She would still have to pay the monthly fee of course.  She was also worried about handing it back or balloon payment as it had some damage by then. Just use your cash to buy a car outright.

Grumpy_chap

Get the house first and then look to get a better car.  
Any other finance before mortgage will impact mortgage offer.
Having a slightly higher deposit may help with mortgage rate if changing LTV.
You will kick yourself if dream home is lost by the price of the car.

rw05

@MinuteNoodles No, like I said in my previous posts, I am not happy to pay £100s a month on finance which is why I am asking for advice and opinions. I am hoping to pay for the car out-right once my house purchase has gone through.
Thank you all for your advice, it is much appreciated. 

foxy-stoat

Just spend £5,000 on a 8th gen Civic, private sale with low or 1 owner or something like that, save the other £5,000 in the bank and wait for the house to complete.  If you STILL feel like dropping 15+ large on a car after owning a £5K car for a few months and you still have the £5K in the bank then do so by all means.

pecuniam_hominem

I spent 10k on my car, I love it, but even now I wish I hadn't paid so much. My next car will be no more than 5k. As long as you keep your car serviced and look after it (with a full service history), I have rarely had issues with used cars.

Cars literally burn money IMO, you might as well spend as little as possible on them.