Cheapest way to have new(ish) car?

ripplyuk

I’m thinking of replacing my car soon. It’s 7yo but is becoming unreliable and I now want rid of it. I bought it from new and I really liked the peace of mind of driving a new car. I also know that most of the car’s depreciation happens in that first year, or two, so I was thinking of buying a 2yo (in cash) and swapping it at 4 or 5yo, buying another 2yo and so on. However, I’ve been told that it can often work out cheaper to buy a brand new car under finance as the dealerships often have big discounts and manufacturers contributions etc. Is this true? Would a PCP or PCH be better since I want to replace the car every few years? 

I know that the cheapest way of all is probably to buy a banger for less than £5000 and keep repairing it which would be fine for those who are knowledgeable about cars and can do their own repairs etc, but I can’t. It also stresses me out having a car that isn’t reliable and I’m willing to pay more to avoid that stress (but not a huge amount more).  My dad always said that a car will cost around £1000 a year, regardless of whether it’s new or a banger. A £1000 car will last a year and a £10,000 ten years. This was in the 90’s so a bit more now but I keep thinking that maybe he was right and it doesn’t really matter what age of car I buy. 

thegentleway

sounds like you have been told nonsense. It can work out cheaper to buy a new car if you plan to keep it long term but that's not going to work if you only keep them for 3 years. After 3 years, most cars are only worth 40-50% (imagine how many repair bills that covers...).

no offence to your dad but car costs vary widely.

If you buy a 3yo car from a reliable manufacturer, you don't have to worry about repairs. Sometimes PCP/PCH can be cheaper but you will have to work it out for the specific car you're after.

fred246

Have you really got an unreliable 7 year old car? What is it and what is going wrong?

cajef

ripplyuk said:

I’m thinking of replacing my car soon. It’s 7yo but is becoming unreliable and I now want rid of it. I bought it from new and I really liked the peace of mind of driving a new car. 

You have had it from new, what make and model is it and how is it becoming unreliable after only seven years? 

AdrianC

There is absolutely no reason for a 7yo car to be inherently unreliable. Wear and tear may mean some consumables are coming due for replacement, but that's not the same as "unreliable".

One thing's for sure - maintenance is a LOT cheaper than depreciation and finance costs.

BOWFER

If you're looking for as close to fixed cost motoring as you can get, then personal lease or PCP is the way to go.
Fixed monthly payments, then all you have to worry about is insurance, servicing and consumables (tyres/wipers etc.)
No nasty repair bills to worry about, it's under warranty.
No clue what kind of car you want, but lease/PCP can start as low as like £120 a month for a small car.

BOWFER

AdrianC said:

There is absolutely no reason for a 7yo car to be inherently unreliable. Wear and tear may mean some consumables are coming due for replacement, but that's not the same as "unreliable".

One thing's for sure - maintenance is a LOT cheaper than depreciation and finance costs.

Unreliable maybe isn't the correct term to use, but if the wear and tear repairs mean it's off road the end result is the same.

ripplyuk

It’s a Volkswagen Up. It’s having electrical problems and recently had a new BCM fitted but some of the problems remain. The scariest is that the steering wheel will ‘stick’ randomly as I’m driving (electric power steering) and no one seems able to sort this out, despite several garages trying. They’ve now told me it might be something to do with the ‘main computer’ whatever that means. I just can’t be bothered with the hassle anymore. I hate driving it. 

ripplyuk

@BOWFER I’m looking for as small as possible. Another supermini type. I don’t mind what brand. 

This car was bought under a PCP. I really wish I’d just handed it back at the end instead of making the massive payment to own it. 

DrEskimo

You need to just make sure the price you are paying for the 2/3yr old car is competitive, then it will almost certainly work out cheaper than leasing a brand new car.

The problem is that used car prices can vary dramatically. It's not uncommon for used models to have prices similar to brand new cars with discounts (including finance incentives) but these are just overpriced used cars. Take your time to research values of the car you want and ensure you are getting the used car for a lot less than what a discounted new car would cost.

Once you have a target price to purchased, you can then determine its likely value after 2/3yrs (trade or private sale which ever you would do) and then can compare that total cost of ownership with a new car on PCP or lease.

Given how strong depreciation is on new cars, I suspect if you buy a used car at a keen price, the used car bought and sold every few years will hands down be cheaper.

BOWFER

ripplyuk said:

@BOWFER I’m looking for as small as possible. Another supermini type. I don’t mind what brand. 

This car was bought under a PCP. I really wish I’d just handed it back at the end instead of making the massive payment to own it. 

If you want rid of it, check out the lies of we buy any car.
They have their critics, but I've used them a few times.
And the beauty of them is that if it has any kind of fault, they don't even drive them.
I sold the wife's Renault Captur to them when the clutch started vibrating like mad, which would have made a private sale impossible.