Thinking of buying new Clio on 0% - good deal?

Stu666

First of all, pardon my ignorance as I am a complete newbie at buying things on credit, and the mere thought worries me. But circumstances have made me look into it.

Anyway, I need a brand new car for a new business venture. It needs to be small and black in colour, due to the planned livery. I have narrowed my choices down to either a Renault Clio or Ford Fiesta. The new Clio is out now, but the new Fiesta is not out for 6 months, and I got bad vibes from the local dealership who wanted me to do some PCP deal.

My local Renault dealer is offering 0% interest over five years until the end of this month. We have been quoted £9600 for a brand new Clio Expression (1.2 16v, metallic black, alloys, air con) over five years, with £1000 deposit (this includes £500 in part exchange for our old 1997 Astra), giving a total price of £10,600.

What I really want to know is, since I'm a complete newbie, is this a good deal or should I walk away? The repayments of £160 per month are perfectly managable, but I still don't want to be ripped off. Would really appreciate any feedback before I take the plunge.

chuckles1066

Stu666 wrote: »

First of all, pardon my ignorance as I am a complete newbie at buying things on credit, and the mere thought worries me. But circumstances have made me look into it.

Anyway, I need a brand new car for a new business venture. It needs to be small and black in colour, due to the planned livery. I have narrowed my choices down to either a Renault Clio or Ford Fiesta. The new Clio is out now, but the new Fiesta is not out for 6 months, and I got bad vibes from the local dealership who wanted me to do some PCP deal.

My local Renault dealer is offering 0% interest over five years until the end of this month. We have been quoted £9600 for a brand new Clio Expression (1.2 16v, metallic black, alloys, air con) over five years, with £1000 deposit (this includes £500 in part exchange for our old 1997 Astra), giving a total price of £10,600.

What I really want to know is, since I'm a complete newbie, is this a good deal or should I walk away? The repayments of £160 per month are perfectly managable, but I still don't want to be ripped off. Would really appreciate any feedback before I take the plunge.

You can pick them up new from a site like AutoEbid for around £9k but then you won't get interest free credit. £10,600 seems high though.

fox2319

Stu666 wrote: »

First of all, pardon my ignorance as I am a complete newbie at buying things on credit, and the mere thought worries me. But circumstances have made me look into it.

Anyway, I need a brand new car for a new business venture. It needs to be small and black in colour, due to the planned livery. I have narrowed my choices down to either a Renault Clio or Ford Fiesta. The new Clio is out now, but the new Fiesta is not out for 6 months, and I got bad vibes from the local dealership who wanted me to do some PCP deal.

My local Renault dealer is offering 0% interest over five years until the end of this month. We have been quoted £9600 for a brand new Clio Expression (1.2 16v, metallic black, alloys, air con) over five years, with £1000 deposit (this includes £500 in part exchange for our old 1997 Astra), giving a total price of £10,600.

What I really want to know is, since I'm a complete newbie, is this a good deal or should I walk away? The repayments of £160 per month are perfectly managable, but I still don't want to be ripped off. Would really appreciate any feedback before I take the plunge.

Sorry, bit confused. You say the quote is for £9600 but then give a total price of £10,600?

chuckles1066

fox2319 wrote: »

Sorry, bit confused. You say the quote is for £9600 but then give a total price of £10,600?

I think the OP is saying it's £10,600 for the car, less £1,000 deposit, so £9,600 on 0% over five years.

Stu666

chuckles1066 wrote: »

I think the OP is saying it's £10,600 for the car, less £1,000 deposit, so £9,600 on 0% over five years.

Correct, sorry for any confusion.

Conor_3

chuckles1066 wrote: »

You can pick them up new from a site like AutoEbid for around £9k but then you won't get interest free credit. £10,600 seems high though.

Well lets do the maths on your figures. to work out the benefits of a 0% APR deal, you have to work out what the interest that would have earned in savings over the term of the finance.

Say typical savings interest rate of 5%. The interest you'd lose on that £9000 over 5 years would be £2486 making the cost of buying it over 5 year £11486 so it's £886 cheaper buying one at £10,600 on 0% APR than it is buying one for £9000 outright.

It would, however, be no cheaper than buying one for £9000 on finance with an APR of around 4%.

chuckles1066

Or use a credit card cheque for the one-off £9k, get hit with something like a 2% "handling fee" (£180) and then do a 5 years 0% juggling balance transfer act...

bandraoi

chuckles1066 wrote: »

Or use a credit card cheque for the one-off £9k, get hit with something like a 2% "handling fee" (£180) and then do a 5 years 0% juggling balance transfer act...

Which would effectively be a 5 years on 3%, the handling fees being what they are.
Still a better deal. If you can afford to pay it off more quickly the £9K at a higher interest rate might still be a better deal.

deltic_2

£10,600 is an absolutely ridiculous price for that car. The new Clio has bombed in the marketplace and Renault can't sell them. You should be paying no more than £8,000 on the road for a car of that spec in this market. See the Fiesta Zetec Blue post just below this - £8,200 on the road for a much better specified car !

http://www.lookers.co.uk/special-offers/FORD/FIESTA/3261/ (I know it's blue but is for illustration of deals.)

gord115

The fiesta will probably be more reliable also.Renaults aren't known for their reliability and the dealers are rubbish
.http://www.autoexpress.co.uk/news/autoexpressnews/207636/driver_power_2007.html

Bob63

gord115 wrote: »

Renaults aren't known for their reliability and the dealers are rubbish

I asked our RAC man a couple of weeks back what small car he would recommend. I mentioned that I was interested in a Fiesta because of the bargains available and my daughter is 17 in June so we are looking to buy her first car. He told me the Clio was a super car, very reliable based on his experience, and much better than the Fiesta. I remember being shocked at his opinion but have taken note as I respect the word of a professional who experiences breakdowns in all sorts of vehicles.