Buying a Car

User36750

Due to family circumstances, we're pretty limited to a Peugeot 5008.
We've extensively looked at other options that can fit 3 car seats (and still space for luggage) but this one has been recommended repeatedly.

We're looking to spend between £17,000 and £20,000 on the car as we want a modern one to last us a long time.

Option 1:
Get a £13,000-£14,000 loan and put the rest in credit cards / use cash in the bank.
This means we'll own the car after paying off the loan (about 4 years). But 2nd hand versions are slim pickings or high mileage already.

Option 2:
Go for some sort of PCP deal but when the time comes to renew, then get out a bank loan to pay it off and then pay the loan off.
It means we'd get a new car and free servicing and whatever for a few years. We'll also take care of it knowing it will be ours. But it means paying £300 a month or whatever for 2 years, then paying the same amount for another 4 years on top of that.
However, loan interests may have gone down a bit by then.

At the moment, we'd be paying an extra £1000-£1500 on interest with a loan at today's rate. That's not bad I don't think, so leaning towards option 1 but would welcome other thoughts on this.

We can't take money out the house / add £15,000 to our mortgage.

binao

 My bank keeps pushing "interest free", the amounts are mind boggling.

tacpot12

It's not ideal to base a decison on such a major commitment on what might happen with interest rates. I think I would go with what is certain, and what you can certainly afford - so option 1. 

Are you sure that a Peugeot 5008 is only vehicle that would work? It's not a model I'm familiar with, but surely any large people carrier, such as a Ford S-Max, Galaxy, Seat Sharan, VW Touran would work? They all allow you to get three child-seats into the back. 

Fixating on one one rare model as being suitable will guarantee that you will overpay for your next car - this is not a problem if you can afford it and will keep it for a long time, but you are spending money unnecessarily and paying interest to borrow that money.

Flight3287462

Here you go as a start

https://www.carwow.co.uk/best/cars-with-three-separate-rear-seats

jimbo6977

5008 has several sister (Citroen) models based on the same or similar platforms that would offer similar levels of practicality

Stateofart

It's almost always better to get a loan at a preferable rate and finance that way.  The PCP comes into it's own when you are trying to get into something you ordinarily can't afford, as the monthly payments are lower, but there's a balloon most people don't pay at the end.  If you want to keep getting something new after three years, the PCP (effectively a rental) is the way to go, however if you're happy to keep it it's probably an expensive way to finance.  PCP is trouble-free motoring so that's another way to think about it, but then you hand it back as you've pretty much rented in.  You can get trapped into a PCP cycle if you're not careful as you'll have no equity to buy yourself out of it of course.

sonaldo

if you can get a loan then do that. i'm looking at 20k cars with a 5k deposit and while the monthly repayments on a loan vs PCP are similar, the interest on the loan is less than 2k while on PCP it's more like 6k (then you have to find money for the settlement fee, not to mention the mileage restrictions, etc.) 

bank loan is a no-brainer if you can afford it imo

Herzlos

You're conflating 2 things here; the car and the finance.

HP/PCP are just a finance mechanism where HP you pay off the full amount over the time and own it and the end, and PCP you pay off about half over the time and then the rest at the end. HP will save you a lot of money in the long run but PCP will give you lower payments.

Then the new Vs used. The way the market is at the moment a new one might not be any or much more expensive than a young used one, by the time you factor in interest rates and any finance contributions.

Most 5/7 seat people carriers will take 3 car seats in the 2nd row. Personally I'm a fan of the Citroen Berlingo which is essentially a van with extra passenger seats, but they are all pretty similar anyway since you can often buy a Citroen, Peugeot, Vauxhall or Toyota version of the same car.

I'd just be looking for anything of that size and base it on the deal, and take your 3 car seats in to test it out before putting down a deposit.