Wrong car purchase/loan worries

Mildly_Miffed

If a 1.2 Pug 308 is "too expensive to run"...

Everything post 2017 is the same tax price, unless it was over £40k new and is under 5yo.

Insurance is not going to be massively more expensive than anything else of similar Astra/Focus size/age/value.

Has it actually lost a quarter of its value in a year, or is that just the spread between buying at a trader and selling to WBAC or similar?

I'd expect you to be getting about 45mpg, if not more, unless you're just sitting in urban slow-moving traffic - so £100 of fuel, at £1.35/litre, will be about 750 miles.

What's the APR on the finance? Can you refinance at a better interest rate?

Grumpy_chap

Pinkismyfavouritecolour said:

Unfortunately the car costs a fortune to run,

I just want a cheaper car to run and not increase my loan 

Pinkismyfavouritecolour said:

It’s a 2018 Peugeot 308 GT Line. 

Assuming that car has a relatively standard engine choice which most do, then it is not an outrageous car in terms of road tax (VED), fuel consumption, insurance and such like.

Before you do anything, I think it is best to start from a very basic assessment of your needs and requirements.  Do that assessment on the core needs, not with a car as the solution in mind:

• I need to commute to work occasionally as I normally WFH - twice per month, X miles each way...
• I need to go to the supermarket weekly and carry back Y carrier bags of groceries...
• I need to take my elderly parents...
• I need to visit...
• I need to go canoeing and carry all my gear including the canoe Z miles round trip, every week...
• I need to take my children to...

This type of thought process will guide you as to whether you need a car or alternative solutions are viable and cost effective.
You can then set a budget and define what type of car (if any) you need.  Key will be the total miles and type of miles that a car would do.
The work towards a solution.

If the solution still involves a car, remember that other cars that may on paper be far more fuel efficient may not deliver the efficiency expected in the real world.  If your potential car use suits a petrol, then diesel might be an unwise choice even if the on paper efficiency is great.

paul_c123

The worst thing you could do is sell this car and buy a slightly less expensive one. You'll take a massive financial hit on the process of buying a car (at retail price) then selling it (at private or trade in price).

Can you do fewer journeys if the cost of fuel is too high? Can you get a better insurance deal or a refund if you do fewer miles?

photome

you are not going to find a cheaper car to run unless you buy an older than 2016 petrol or diesel  which maybe will save you £160 a year or get an electric car

Best to keep what you have or sell and go without a car

Pinkismyfavouritecolour

Thank you all for your great advice. I think it will probably be best to keep it and just try and save money elsewhere. 

Goudy

It's not so much depreciation, yes you have suffered some, but you also paid a dealer profit.
You bought the car retail, that means there was a slice of the price that was dealer profit.
This is often around 20%.

Yes, it will have lost some money in the time you have owned it due to it being older but I presume you've checked the car buying sites for it's current price.
The prices these quote are usually close to trade price (or below).
Trade prices are usually compiled from masses of data from car auctions, before dealers mark them up with their profit.

The problem you have is you didn't pay £11k, you borrowed most or all of that and that comes with a load of interest.

You could ask the finance company for a settlement figure.
They will work what capital you still owe and add around 56 days interest.

This is obviously a lot less than the total amount of interest you'd pay if you carried on with the monthly payments but you will no doubt still owe more than what you can sell it at as the monthly payments made already will be made up of a large slice of interest and not solely capital.

I don't know what the rate was you borrowed at but I presume it might be quite high.
There are some tricks that might help, like settling the expensive finance with a cheaper loan (if one is available to you).

But writing that, I would think you might be better "tightening the belt" a bit, then work on getting the payments down.
You are free to make one off lump payments to the finance company and if you can get in the area where what you owe equals what the cars is worth I think you would feel more comfortable, plus the monthlies will drop.

This might sound like a massive task, but it can be done with a fair amount of dedication.
Just take one step at a time.

You'd need to go through all your expenditures verses your total income and see where you can save, plus you'll need to learn some money saving tricks.
The motoring section isn't probably the best place for this advise, perhaps the Debt Free Wannabe section will be better.

Then if you can afford it, pay what you saved to the finance company via a lump some every now and then.

chrisw

The depreciation won't affect you until you come to sell it, so don't worry about that for now.