Good or bad time to buy a car?

North22

I have savings in the bank earning practically nothing and current inflation will dramatically reduce its buying power. I’m considering buying an Electric Vehicle or alternatively I could carry on with my current 10 year old diesel.  Would it make financial sense to spend the £30k+  an EV would cost now rather than let the buying power of that part of my savings erode significantly?  BTW, I can afford this and it wouldn’t leave me short of savings reserves.  Any thoughts welcome.  Thanks.

Ebe_Scrooge

More details on your driving pattern would help.  But on the face of it, if your current car is giving you no problems then you're probably better off keeping it.  Unless (or maybe even if) your driving habits dictate that an EV would give you vastly reduced running costs, then it's going to be long long time before you recoup the cost of a new car.

That's looking at it from a purely financial point of view.  There may be other factors to consider - do you live in one of these places where you're not allowed to drive your car into town due its emissions, for instance?  Are you fancying a change of car anyway?  Can you install a charging point at home - how much would that cost?  But in terms of cold hard cash, you're probably better off sticking with what you've got.

Herzlos

It's a fairly good time to buy a new car if you don't mind waiting. The increased fuel prices will make an EV look more appealing and the lack of supply in the used market means you'll probably get far more for your 10 year old diesel than you expect.

It's a terrible time to buy a used car though.

MX5huggy

If it simply buying now vs buying next year then yes get an order in (you want a fixed price). 

Is buying a new EV money saving probably not compared with a 10 year old oil burner. 

North22

Guys. Thanks for your thoughts. My ponderings include. (a) one option is that buying an EV on PCP finance would cost about £4000 per year plus, say, £20k final payment in 3 years time, with the EV potentially being worth more than that as a used car at that time …(b) if I don’t buy and keep the £30k in savings  then that means its buying power would probably erode by, say, £3k per year at current inflation rate.  So, is there any validity in a logical argument like this that says that there is not much financial difference between going for the EV car vs suffering inflation on savings kept in cash?

MalMonroe

North22 said:

Guys. Thanks for your thoughts. My ponderings include. (a) one option is that buying an EV on PCP finance would cost about £4000 per year plus, say, £20k final payment in 3 years time, with the EV potentially being worth more than that as a used car at that time …(b) if I don’t buy and keep the £30k in savings  then that means its buying power would probably erode by, say, £3k per year at current inflation rate.  So, is there any validity in a logical argument like this that says that there is not much financial difference between going for the EV car vs suffering inflation on savings kept in cash?

Hi - don't cars start depreciating as soon as you buy them? So you won't get any money back or any benefit from buying one, whereas keeping money in an account will earn some interest, however minimal. 

You can get electric cars cheaper than £30k, though e.g. Skoda. I mean, unless you prefer one of the 'big brand' names. You can do a search on google.

As Ebe_Scrooge said above, more details of your driving pattern would help. If you don't go far and don't use it often, there's not much point in spending a lot of money on a car. 

If you have definitely got the money to spend on a car, it wouldn't make any sense to get one via PCP. That will appear on your credit report as long term debt. I know, I've had one for three years. Not a problem because I don't have any other debt and don't want to apply for anything financial right now but it could be if people do have other debt. It's an indication to lenders that you can't afford to buy a car outright though.

If your current car is okay and you're happy with it, then it'd make sense to stick with it for now. Just my opinion, of course.

Grumpy_chap

MalMonroe said:

You can get electric cars cheaper than £30k, though e.g. Skoda. 

I thought the cheapest Skoda EV (all-electric) was the Enyaq from £40k.

Other brands do have cars below the £30k threshold and all-electric.

North22

Thanks guys. Unfortunately the cheaper Electric cars don’t have the space or range I need for my family.  I currently do about 10000 miles a year (more if my wife started using the same car more, as she well might).

Grumpy_chap

In choosing an EV, you need to look at the use profile not just the total annual mileage.
You are correct that the cheapest EVs have a shorter range and are smaller (rather like the cheapest ICE's).
There are some "family" sized cars with decent range now coming to market and landing below the £30k threshold.

MX5huggy

Buying a car now and using it for 3 years is not going to be better financially than keeping the money in the bank ( that’s proper man maths if you prove that). £30k will become £31836 (2% per year on savings) in 3 years inflation will erode the buying power say 10% then 2 years of 5% so will have buying power of £25858 in today’s money. 

But if you buy a car today for £30k you will get it sometime in the next 12 months. If you wait 3 years you’ll have ££31836 in the bank but the car will cost £36382. 

[Deleted User]

I’d look for a car that was in stock now. You may not get the exact color you’d like and it won’t be one of these SUV things that are over priced. If you want an EV then I reckon the less desirable but still very capable Nissan Leaf or Peugeot e208 are good shouts and are well under 30k and probably won’t lose much value even after 3 years as I think this situation could go on for a long time and could get worse with inflation.