Car Buying

funkyfin2000

Hi Guys and Girls,

Bit of an odd question possibly - looking for some advice though and thoughts. 

Currently I get a car allowance for work - about £350 a month - which is all great and I currently lease a VW for similiar money.

Things have changed though recently, having inherited a large some of money - well fairly large three figure.... sum!

Looking at the possibility of getting a car with the value of anything between £40k - 60k.

So the question is, what's the best way to buy one? Clearly the answer should be, well just buy it with your inheritance, it's yours and off you go - the thing is the wife doesn't want to go and shell that much money on a new car.

I guess the options are...

One - Buy outright, no ongoing payments, but car depreciates over the next few years to an amount of equity stored in the car....

Two - go and get a car finance loan with a low APR - pay a deposit and finance the rest - seems crazy to be paying interest though when we have the funds available.... 

Three - lease a new car again - large deposit to bring down the monthly payments to something similar - prices have gone up crazily for leases though and for a decent car that we want, it will be expensive per month.....

Four - PCH? Deposit, residual value at the end of the 3 years, sell up and move on? Can you do PCH for a 2nd hand car? I guess you can? would it be cheaper interest rate wise to do point two though? as can drive a better APR deal?

any help welcome on thoughts!

Rich 

caprikid1

Does the company have scheme to purchase the lease car through them ? You get heavily taxed taking it out as salary.

annual miles ? 

Personally if considering electric for me its lease all the way. as too much could change in the tech or tax devaluing vehicles.

Belenus

funkyfin2000 said:

Things have changed though recently, having inherited a large some of money - well fairly large three figure.... sum!

A three figure sum is under £1000. Do you mean a four or five figure sum?

£1,000 to £9,999 or £10,000 to £99,000.

funkyfin2000

good point! 6 figure sum inheritance! My bad! £200k basically

Ibrahim5

Sensible wife.

[Deleted User]

Very nice. Get a Tesla!

funkyfin2000

Sensible wife LOL! Looks like PCH probably best with a hefty deposit!

iwb100

PCH is leasing. Do you mean PCP?

Also for leasing the outlay is the same however you structure it a bigger deposit reduces your payments but total amount is same regardless.

Herzlos

The wifes probably right, that's a lot to be looking at spending on a car (since you're only talking purchase price, not VED and maintenance).

That said, it's almost certainly better to take out a PCP initially - you'll often get a discount in the form of a dealer/manufacturer "contribution" and if you want you can clear the finance later. But it's worth looking at the rate you are paying and what you could potentially do with at £40-60k investment wise. For example, if you can get a 1.9% APR on the PCP but could make 2% from some investment, the sensible thing to do would be to take the PCP and put the money into the investment.

If it was my money I'd probably buy what was a £60k car that's ~5 years old for ~£20k, and put the rest of the money towards a house or something boring.

Bigphil1474

I'd agree with Herzlos - buy a second hand car, and be boring with the rest (depending on your company car rules).  Also, don't forget, if you buy an expensive car, it will probably come with expensive maintenance bills. If it was me, I'd keep the VW, which work are basically paying for, and you've got all the money to do something more fulfilling or long lasting with.  

funkyfin2000

Thanks all - I've steered away from buying a silly car - i think I will have to get boring at the end of the lease and look at nearly new A6 Avant or something - that means not spending as much on the car and therefore being better off for it.