Car Finance Options

SimonR22

Hello all, looking for a few opinions on what my best option for financing a new car is in terms of my situation. Have had opinions from family but unfortunately none are overly clued up on all the options so thought I’d ask here. May be a bit of a long post so will type a shorter version at the very bottom.

I currently have a 2020 VW Golf Style. Above average specced with heated seats, panoramic roof & heated steering wheel. Pretty much bang on 60k miles on the clock with full MOT history and service history, have kept it in very good condition. I now need something bigger and have been vigorously researching Mercedes A-Class Saloons & Mercedes CLA’s. I get the offer of free car charging at work along with petrol money so am thinking that a hybrid option is the best for me. From WBAC and Motorway I have been offered an initial price of £10,000 - £11,000 for my Golf. Personally, I think I can get more than that due to the extras I have in my car and am thinking more £11,500 - £12,000 maybe even more.

To purchase my golf I used a bank loan which I have £8,700 left to pay off on it. Paying £244 a month for another 3 years and my insurance is £47 per month.

Here is my issue, I do not know what is the best way to pay for a new one. I have been seeing adverts for A-Class Saloons at the £15,000 - £16,000 mark but have a PCP price of £254 per month. Now when it comes to the CLA they have a higher price of around £17,000 but a cheaper PCP price of £220 per month (assuming a £2,000 deposit for each car). Have checked insurance and is looking like £30 per month for both Mercedes models.

To be perfectly honest I do not mind what way I finance the car, PCP is not something that bothers me as I understand how it works and what to expect with it & the bank loan gives you the option of selling up if you get into bother financially. I simply can’t wrap my head around what to do so any help and opinions would be greatly appreciated. I am effectively looking to pay less per month or the same as I am just now.

SHORT VERSION:

Looking to sell VW Golf Style purchased using bank loan with £244 repayment per month and £47 insurance per month and purchase a Mercedes A-Class or Mercedes CLA for cheaper re payment per month than I am currently paying. Insurance is around £30 on both Mercedes models.

Grumpy_chap

I currently have a 2020 VW Golf Style.

I now need something bigger and have been vigorously researching Mercedes A-Class Saloons & Mercedes CLA’s.

In what way do you need a larger car? Passenger space? Boot space? Both?

It is just that the A-Class is not a great deal larger, if at all, than the Golf you presently have. The saloon variants are longer but that does not increase interior space. I assume your need for a larger car is not just to take up more space in the car park.

Alderbank

As you understand how PCP works, I'm sure you know that the monthly payments don't just depend on the price of the car but also on the size of the GFV (the balloon payment at the end).

Those cars with a smaller monthly payment will have a larger (sometimes massively larger) balloon payment.

Car_54

Don't bank on any "extras" adding much - if anything - to a car's second-hand value.

Alderbank

https://forums.moneysavingexpert.com/discussion/comment/82180650#Comment_82180650

2020 Golf Style boot size is 381 lt (seats up) and 1237 lt (seats folded).

Merc A-Class boot size is only 350 lt (seats up) and 1190 lt (seats folded).

Frozen_up_north

https://forums.moneysavingexpert.com/discussion/comment/82180665#Comment_82180665

I second that. While they are nice when new, on a second hand car they are more things to go wrong. So do not get excited about them adding much value, although it should make it more desirable.

Around now could be a good time to look for a replacement car, dealers can sometimes have stock to shift at the end of a month, especially cold dark autumn/winter months, that's to keep the manufacturers happy with their dealership. I had £4K knocked off a £32K new unregistered car in Nov 2024 and that was without haggling and for "cash". My OH once had a "buy it back for what you paid for it" offered for her 3 year old car, unfortunately it was only if she bought a higher spec model for a lot more than she wanted to pay… and she didn't go there looking to buy a car.

Dealers are good at hiding prices behind "free" extras, and useless add-ons like paint protection at an inflated price, check their arithmetic before committing to buy.

TadleyBaggie

The CLA Estate has a very poor load space, when I checked it out a couple of years ago I was unable to place a golf bag in it. Ended up buying a Qashqai.

SimonR22

I see everyone’s points about it not really being bigger however from what I have discovered when I had one for a few days they are more comfortable and personally enjoy driving it more.

Points taken though thank you.

Arunmor

So to cut to the chase you are bored with the Golf and want to find an excuse to buy a Mercedes of some sort?

If you want a bigger car buy a Superb, needless to say it isn't a Mercedes!

SimonR22

https://forums.moneysavingexpert.com/discussion/comment/82180847#Comment_82180847

Unsure why you’re getting cheeky but I’ll reply anyway. The reasoning why I am getting a new car was never the question, I was asking the best way to do it.

I wasn’t looking for someone to get wide and snide.

SimonR22

Am looking for someone clever to find a way for the payments to be cheaper than what I am on. On initial looks the cheapest I could use each way (that I am aware of) for a new car is as follows. All is assumed without any haggling.

Bank loan for 17k CLA, £4000 cash with £13000 loan, £251 per month with £30 insurance.

Bank loan for 16k A-Class, £4000 cash with £12000 loan, £232 per month with £30 insurance.

PCP for 17k CLA, £2500 deposit with £223 per month, final payment of roughly 10k & same insurance

PCP for 16k A-Class, £2500 deposit with £248 per month, final payment of roughly 8k & same insurance

Don’t overly want to use the full cash amount from selling the golf on a PCP deposit but am okay with using it for a bank loan.

If any clever person has another way of financing that I haven’t yet thought of or has any suggestions that’d be greatly appreciated.