Need to replace car, so many options not sure whats best. Buy new, used, or lease?A few questions

mickym

So, my current car is on its last legs (wheels!) and been told by my reliable garage that the Diff is on its way out very soon, and the cost and condition of the car doesnt really make the job economical repair.

We as a family really need a car, esp for school runs for 2 kids and shopping etc. I work from home so estimated annual milage is between 10 -12k. Im eagar to get a car before this one fails (which im predicting is v soon).

I know car basics, but Ill be honest that I am no petrol head and my motor vehicle knowledge is average at best, so days of dealing with bangeromics is just too stressful for me (my previous used car purchases have always been from people I know). Ive seen a fair few posts on here lately of people spending good amounts of money on used cars too, with them breaking down and having issues with the garages/websites they have purchased them from...which is worrying for me.

Are there any decent ways to buy 'used'? i.e a main dealer approved, or ive also seen cars on sale by independent garages that have an AA inspected/approved cars for sale.

New or Lease despite being expensive seems to offer the better chances of having reliable car.

Financially i have £4k saved, however I need to keep that for some essential roofing work on our property in the next few months, so if we do get a new car id be looking to buy with a PCP, a loan or a lease.

Leasing is looking appealing as it offers the security of getting a reliable car and reasonably quickly if its an 'in stock' deal.

A few questions on leasing.

• What is the benefit of upfront payment for a lease?
  Looking at new leases, and I see that there is usually an option to pay a lump sum up front (equal to 1 / 3 / 6 /9 months payment).
  This reduces the monthly cost, but the overall cost over the term seems to stay about the same. Am I missing something obvious here?
  
  
• Does anyone have tips when it comes to leasing? Things to bare in mind?
  I am already looking at restricting the contract term to 3 years to avoid MOT time, and also means the car will still be under warranty, and im also bearing in mind the saying 'pick the best lese deal rather than the car' (im not a car snob, just need something for school runs and for family transport. I work from home so dont commute).

Any help or tips would be really appreciated! Thank you

Goudy

Upfront payments are just that.
The more you pay upfront, the lower the monthly payments, as you have already noticed the total payable is roughly around the same. That is pretty much true on finance as well, the less you borrow, the less you need to payback and less interest you pay.

As for tips.
PCP deals on used cars tend to come with higher rates of interest. The monthly payments might look attractive but the total you will pay can make a used car really expensive.

New car PCP deals tend to be better on interest rates.

With a lease the contract states you much return the car in a certain condition.
Any damage or excess mileage, missed services etc will be chargeable.
The return condition is usually based on BVRLA's fair wear and tear policy, but not always.

The same can be said of a PCP deal, but only if you return the car to the finance company at the end of the deal.
If you pay off the GFV and keep it, it doesn't really matter.
If you trade it in, then obviously mileage and condition will reflect it's trade in value.

A lease is just rental but a PCP is finance.
A lot will tell you it's an expensive way of buying a car and it can be, but not everyone has the same money you use on a car and if you select the right car/deal is can work out ok.
Generally cars that depreciate slower tend to work out better value.

All deals, lease, PCP and HP can make a more expensive car tempting, particularly when stood in a dealership with nice shine metal everywhere, so it's important to work out your needs carefully and not get carried away with just monthlies but consider the overall total. 

By the sounds of your post, having a set monthly outgoing for a decent car that should give no trouble for a good few years appears the aim as long as those payments are affordable, so it's wise to check which way will better/cheaper, lease, HP or PCP.

Flight3287462

If you decide to lease look for the deal and not the car.  By that I mean you don't tend to get great deals on popular cars.  The best deals you will find tend to be run out models (ie new model on the way), unpopular models.

Start to bookmark all the lease sites you can start collating prices on cars you are interested in keep that as broad as possible so that you can then spot a good deal if it comes along.  The big trouble with that advice is of course the car market has/had a supply problem which is improving slowly so the longer you can hang fire the better.

You should also compare leasing deals with PCP so you can decide which works out better for you.

Ectophile

My thoughts on leasing are:

• They are totally inflexible.  If you need to hand the car back early as your circumstances have changed, there will be a fee to pay.
• There will be a mileage limit.  If you go over that, you will have to pay extra.
• The car will have to be handed back in good condition (most companies follow the BVRLA guidelines).  So any significant scratches, dents or scraped alloys are chargeable.
  

mickym

I had been looking at. Citeron C3 aircoss, took one for a test drive yesterday. 

I worked out a lease on a new one for 3 years is gonna cost me just under £10.

It's one of the cheaper lease deals for sub type that I am after.

At the showroom I did a test drive at there was a 2019 model (lower spec) with 16k for £11k. 

If I got a 7 year loan I'd be paying £190ish a month compared to £260ish pm for the lease.

If that a good deal?

Comes with a years warranty and breakdown.

At least I'd own the car then.

ontheroad1970

7 years is a long term for a loan, and by the time you finish paying for it, it will 11+ years old.  You will also pay a lot more interest by paying it over such a long period.  

mickym

As this is my first way of doing these things it's all new to me and discovering best options. 

What is the regular term for a car loan? Reason for choosing 7 was to keep repayments low. I could make the term a bit shorter. 

ontheroad1970

mickym said:

As this is my first way of doing these things it's all new to me and discovering best options. 

What is the regular term for a car loan? Reason for choosing 7 was to keep repayments low. I could make the term a bit shorter. 

Depends who you are borrowing from.  Generally the maximum from a dealer is 5 years, but I wouldn't generally advise getting finance from  the dealer as the rates are usually terrible.  A bank loan is the way to go, but the longer term you have, the more interest you pay over the term of the loan.

Ectophile

Bear in mind that if the loan extends beyond the warranty on the car, you're taking a risk.

If something expensive goes wrong on the car, you have to pay for the repairs and keep paying the monthly loan repayments as well. 

mickym

Isn't it common for a car loan to exceed the warranty duration? 

Grumpy_chap

Seven years is a long time for a car loan, especially on a used car.
Can you get an older and cheaper car that will still be entirely suitable for your needs, yet at a more affordable initial outlay?