Loaning or Buying a Car for about 4 Years?

User36750

I generally still buy cars.
I usually run them for quite a few years - I owned my last car for over 10 years!

We're looking at buying a used car but one that's probably between £15000 and £20000 - the biggest purchase we've ever made (apart from our house!).

To fund this, we'll be looking at about £12,000 in a bank loan paid back over 3 or 4 years, which probably works out at the same price as some sort of PCP deal.

However, in 4-6 years, we're unlikely to want that car any more.

Advice on whether we should PCP loan a car for the 4-6 years and then buy (although we'd be in the same position needing a loan to buy one) or get a 5.2% bank loan, own the car now and then it'll be an asset which we can part exchange for a new car (and possibly not have to spend so much again).

Advice?

DrEskimo

Whichever loan agreement works out cheapest in terms of interest cost. 

You can trade/sell the car all the same after 4yrs. 

Of course more prudent would be to buy a cheaper car without any finance. Why have you decided on a higher budget with the need for finance? Better still, why not just keep the current car for 4 more years?

what’s happening in 4yrs that you need to change?

EssexExile

I usually keep my cars as long as they keep serving the purpose they were bought for. If the car you have still serves its purpose then keep it, if you need something different why so expensive?

Bigwheels1111

I’m keeping my 66 plate Peugeot 5008 until it at least 10 years old, or until it uneconomical to keep running.
only done 18.5k so far.
At 10 years old it’s due a timing belt, water pump, tensioner and belt. About £800.
The only thing that would make me change it is if euro 7 comes 2025. And the ULEZ changes from 2025-26 as I go in and out twice a week.
I’m lucky as I can get a 4 year extension for a disabled vehicle.

If you have a car I would keep it going for a couple of years if possible as car pricing is stupid at the moment.
I would not want any type of financing in this current climate.

macman

There is no suggestion that Euro 7, which won't arrive as a new car requirement until 2025, will be applied to ULEZ at any date after that. At present, the ULEZ compliance standard is Euro 4 for petrol and Euro 6 for diesels. 
If you are thinking that the zone could expand out further, that is not possible, as it would be to areas beyond TfL's remit.

Grumpy_chap

While I doubt the ULEZ exemption will go straight to EURO 7, the standard will have to tighten at some point otherwise TLF will not be able to recover the investment made in the monitoring infrastructure.

Typhoon2000

If it’s a petrol car than Euro 7 won’t matter as the NOx limit for Euro 5 is the same as 6 and the proposed Euro 7. 
The NOx for the current Euro 4 for ULEZ is a little higher, so the maximum it could be raised to is Euro 5 for petrol.
For diesel they could raise it to Euro 7 as some point to match match Euro 5 NOx for Petrol.

Grumpy_chap

AIUI, Euro 7 will not be in force for another couple of years from now.
ULEZ cannot immediately adopt Euro 7 without making all the cars that are still practically brand new non-compliant.
It is criminal enough that late-model diesels only half way through their life are being demonised through ULEZ.
Euro 4 was 2006 and Euro 5 was 2011, so a tightening of the rules for petrol could be the next step.  If that was done when the Euro7 comes in, then the affected cars will be 14 years old, so pretty much end of life.

User36750

DrEskimo said:

Whichever loan agreement works out cheapest in terms of interest cost. 

You can trade/sell the car all the same after 4yrs. 

Of course more prudent would be to buy a cheaper car without any finance. Why have you decided on a higher budget with the need for finance? Better still, why not just keep the current car for 4 more years?

what’s happening in 4yrs that you need to change?

Because those are the parameters of our situation at this moment in time...

We need a bigger car as we'll have two babies and a toddler in car seats.
Not many cars can accommodate three babies and two adults.

After 4-ish years (maybe longer), our situation may change as one child may be tall enough for a booster seat only.

I want a nice car, not a banger, so looking at our finances, a chunk of deposit and a loan seems to meet what we're looking at right now.

User36750

EssexExile said:

If the car you have still serves its purpose then keep it, if you need something different why so expensive?

A second car...

My car is fine for it's needs and thus, I will keep it for at least 10 years.
Our second car will no longer be fit for purpose in a few months, but we'll need something much bigger.
Sorry but I simply don't want a car that is older in terms of age or features than what we currently have.

This is about the best way to finance what I need, not buying a cheaper car.

People filling in gaps that aren't there springs to mind

CoastingHatbox

This probably doesn't help, but I'd suggest a used/low mileage Citroen Berlingo Multispace (or a new electric one if you can afford it and the range suits).

Not a luxury car by any means, and no credibility but more than made up for with absolute astonishing practicality that most big cars struggle to rival.