Inspired by the insurance thread, I'm wondering how people have bought their cars and which option might be best. We didn't own a car until a couple of years ago as we lived in Central London and used the motorbikes or TFL. Upon moving out, we bought a new 5 door Mini Cooper. We probably only do 4k miles a year as we can walk into town easily and use the motorbike a lot. I went with a PCP deal, and paid off the balance after buying it, leaving £7k outstanding at the end of the term and meaning I didn't pay interest on the loan. With that £7k earning interest in my savings account it meant it was technically less costly than buying the car outright initially. However, that £7k is due shortly and I'm not sure whether to pay that off and keep the car. My concern is if it has issues, it's now out of warranty and could end up costing a lot. A friend of mine just had a gearbox go in their Mini and it was a £2.5k bill. There's also MOT/Tax costs to factor in now too. The car is worth about £13k so if we were to trade in and start a new deal we'd have around 6k deposit on a new car. Does anyone lease? What are the pros/cons? I've not done it before. Convenience/smart financial decisions are really the only factors. I'm not a car guy at all so no interest in getting anything fancy.

@"Ernie1"#p50865 PCP makes them more money, which is why they are so keen on it…If extra money is made by companies doing PCP deals, that money is coming from you. If you buy new, you can usually get 1,500 or more off the new price depending on popularity. **If you buy 1 year old used, someone else takes the 20-30% depreciation hit.**

We've just bought a new (pre-reg) Panda 4x4 on HP over 60 months the credit charge is about £3k which is what was left of the trade in on a Ford Fiesta 2019 plate with about 13,000 miles on the clock, the balloon payment was around £5600 and would have been due in November. Normally we'd have kept the car and bought it outright (trade in was £9150) but the clutch was replaced last month @ £440 and the service and MOT were both due next month plus there was no guarantee another clutch would need replaced in another 13k miles so we got rid of it. Personally I don't think there's any point in throwing nearly £6k into a four year old car, we did buy my wife's 2016 Fiesta back in 2019 my son has that car now it was his car that we got rid of. The intention is to keep the Panda for as long as we're able to (drive) I'm 64 next month and my wife is 65 in November so both nearly retired or nearly at retirement age so hopefully we can pay the car off sooner than 60months that's the plan anyway. It's a bit of a nightmare buying a car these days, the Fiesta was on a PCP with Ford credit and the APR was only 1.2% (£450 credit charge over four years) plus Ford contributed £1000 to the deposit at the time we bought it however the APR for the Panda is 9.9% and the repayments are £264 a month vs £215 for the Fiesta the road tax for both cars are £180 a year but be aware that if you buy a brand new car then the road tax can be eye wateringly expensive, for example on a brand new Panda the RT is £650 then £180 for the next four years however some cars are as much as £3500 for the first year's RT and if the list price for the car is over £40,000 then you pay that amount for the next four years too. There's also stock issues and in our case the Panda 4x4 is now discontinued Fiat are only making what they have on their order book but once those orders are completed then they're not making any more of them in fact our car is a 2022 manufactured car and registered in April 2023, some people have waited nearly two years for one BTW. We ended up traveling to Nottingham to pick the car up from the dealer who was selling it, they actually wanted £650 to deliver the car to Glasgow and pick up the Fiesta and they added that cost onto the credit agreement which made the delivery charge £820 or another £13 a month. The dealer was terrible BTW. Tony

> @"DavecUK"#p50868 [1984FXSE](https://coffeetime.freeflarum.com/d/1943-cars-buy-lease-finance/1) PCP makes them more money, which is why they are so keen on it…If extra money is made by companies doing PCP deals, that money is coming from you. If you buy new, you can usually get 1,500 or more off the new price depending on popularity. If you buy 1 year old used, someone else takes the 20-30% depreciation hit. The new road tax rules wipe out a lot of the savings you really need to buy a pre-reg car now otherwise you will pay a fortune in road tax and even if the car is a pre-reg then you could end up paying about £3500 a year in RT after the first year depending on the list price of the car when it's registered. Electric vehicals start paying RT from next year BTW.

Interesting, thanks both. I guess leasing or finance makes sense for changing car regularly. I don’t have a real need for a new car regularly so I might hold onto mine for a while.

Looking at the figures you guys are talking about I feel a little embarassed. I have never spent more than a grand on buying a car. I always buy used Vectra's outright (they are workhorses) for my partner and I, and we usually run them for 4-5 years before we sell them and buy another 2. What we buy them for we usually make the same back when we sell them. No major issues (touch wood) over the last 15 years besides the obvious, tyre replacements, brake pads etc, but they just run and run. We do about 40 miles a day each, Monday to Friday, so not that much driving I guess. I wince when people at work tell me how much they have spent on new cars (15k plus) as it's something I would never consider. My coffee equipment is probably worth more than both our cars haha.

I did a PCP deal on a Kia Rio 10 years ago. It cost about a grand more than had I bought it outright at the time. We had an option to trade it back in after 3 years and get abotger car, but we decided to keep it. The total cost was about £13.5k and payments were £230 odd a month. It's coming up to 10 years old and has just over 20k of miles on the clock. It's never skipped a beat and I can't see the point in selling it as I expect / hope it will last me a few more years given it's condition and how little use it has had. Kia's are great cars and come with a 7 year warranty on parts as long as you get them serviced every year by a Kia garage.

> @"Beverast"#p50911 I wince when people at work tell me how much they have spent on new cars (15k plus) I looked the other day out of curiosity and couldn’t believe how much some cars you see regularly on the roads cost. I don’t exactly live in Kensington and Chelsea but there’s no shortage of Mercedes and Range Rovers round here. A Range Rover is like £1200 a month with almost 20k down… 20,000 deposit and still £1200 a month. We’re lucky enough to live comfortably but I wouldn’t even consider spending that kind of money on a car. Horses for courses I suppose. The Mini 5 door is perfect for us and we have the motorbikes for the fun.

@"Ernie1"#p50922 I’m completely with you in this. I don’t understand how the majority of people can afford to drive a car that costs that much. I don’t tend to borrow money unless I absolutely have to. It seems crazy to me to take out a loan for something as superfluous as an expensive car. Is this what people do? We bought our last car outright, a VW golf, in 2009 and it’s still running like clockwork. Is there a better way of owning a car that I don’t know about? I really don’t know anything about leasing or renting cars so would be grateful of everyone’s advice if I’m missing a trick.

@"JammyDodger"#p50929 If you’re buying a car and keeping it until it’s basically scrap then I think buying outright (either new or almost new) is probably still the most cost effective. However if you add up all the costs of longer term ownership (MOT, tax, servicing, repairs) over a period of say 1-5 years and factor in depreciation, buying new is almost always cheaper to lease or finance if you want a new car every few years. I think Warren Buffet or someone who knows about money said ‘If it appreciates (like a house), buy, if it depreciates (like a car), lease’. The other benefit is that you know exactly what your car will cost you for x number of months/years. Obviously if your car doesn’t ever have problems this isn’t an issue, but always having a car under warranty with a service plan removes the risk of expected repair bills. I heard a story once of a farmer, real old school chap who bought a brand new version of the same car every four years. The salesman tried his best to explain that he would’ve saved money by financing it, but he refused to borrow any money at all so would always pay cash, and lose a load in depreciation the minute he drove out the door. If interest rates are good, especially using tracking funds, you can invest the difference a new car would cost outright and finance it and over the term could be slightly better off. As with everything though it’s all a lot of gambling. In reality though, like with other luxuries, financing offers those who wouldn’t otherwise be able to afford something the chance to show off their purchase and look wealthy by loading themselves up with debt. Few people probably have £50k in cash to drop on a Mercedes but are happy to spend the 750 a month to finance once. I think it’s reflective of modern culture where we buy first, pay later as opposed to saving like we used to.

> @"Beverast"#p50911 have never spent more than a grand on buying a car. Most of the joe blogs these days are spending half that again on a phone each year!!

Cars - Buy / Lease / Finance?

james65477564

Ernie1 Your usage is impressively low and this definitely makes it difficult to justify the additional cost of an EV. Based on your usage is there any point changing at all, what is the actual probability of encountering a £2.5k issue in a lightly used 4 year old car? You could just keep the money and revisit the decision each year. By the time the mini is 8 years old (and likely still a good car) the EV/ICE balance will probably have reversed? Alternatively you switch car and suffer >£2.5k loss in depreciation.

We had 2x diesel Audis and spent £200-300 per month on fuel. Since getting an EV our highest monthly spend has been £25 and the remaining diesel A6 gets refilled 2x per year (still > than annual electricity!). Audi wanted as much for a replacement A6 as the EV + servicing + fuel made it prohibitively expensive. An EV also gained us access to Octopus Go so we saved £1500 on our domestic energy bill by consuming cheap off-peak electricity in the house.

Is it actually known a mini battery will typically only last 5 years? I thought EVs normally came with 8 year warranties so if this is correct BMW are going to lose a ton of money on warranty claims? The leasing companies are also going to lose because ex-lease cars will also be near 0 value having only earned 50-70% of their cost through lease payments? The only studies I know of are based on tesla and they paint a rather boring picture of cars typically incurring 10% range loss over 200k miles.

Ernie1

james65477564

Thanks for bringing it back on topic!

I think you’re right, we’ve got less than 15k miles on it I think so hopefully with regular servicing the likelihood of large repair bills is slim at this point.

I put a similar mileage on the motorbikes so collectively we’re probably closer to the annual national average but the car is mainly used for trips to see family or to the airport/station etc. After so many years car free in London I sometimes forget we even have a car!

You’re correct on the battery life. I just did a very quick Google and it looks like 8 year / 100k miles is the battery warranty.

james65477564

Ernie1 I dont know if they are worthwhile but you might also be able to get an extended warranty which would cover large items like gearboxes and therefore reduce your risk exposure further?

Ernie1

james65477564

Just checked and they do indeed. It’s about £500 a year for our car. Not unreasonable if it’s needed but a lot if it isn’t. Like any insurance I suppose.

Chriss29

I think a mix of EV and ICE is good but agree that an EV only world seems hard to fathom right now. That said batteries will get smaller and more powerful. However for 70% of people I imagine an EV will do them just fine.

I’m curious about these synthetic fuels or whatever they’re called. Apparently the Le Mans cars this year were all powered by a by product of wine.

The batteries will last way longer than 5 years. Have a look on auto trader and you can still get Nissan Leafs from 2010 with good battery life.

There’s a lot to be said for running ICE cars to death (although I understand a well maintained one could last forever) but then if we all do that, where does the investment come from for alternative fuels? Sorry this is way of topic.

Personally we do both buy and lease and they each had had their plus and minuses to the point if we need to do it again it will really depend on what deals are available at the time.

dfk41

This is all fine if you are working and wealthy. What about the poorer who rely upon old used cars that they can maintain. What about non wealthy pensioners? Oh, is this the price society charges in the race for net zero? I hope Britains non wealthy are comforted by the fact that our 1% contribution to the worlds carbon footprint is absolutely meaningless as they wait for a bus and put extra clothing on. Microwave meals rule………

Twotone2

Suspect most of the buyers of EVs are companies or employees buying a company vehicle dont know if it still applies but there was very good tax incentives for companies/employees buying EVs.

One of my neighbours bought and electric Nissan van when he retired a few years ago, he paid £18,000 for it net (£6k grant from the Scottish government) the van never moves like never moves, he used to work part time collecting glasses in a local hotel but I don’t think he does that anymore and his dog can’t walk far so the van just sits there, his wife has a big eff off BMW 4×4 diesel or petrol version that never moves either.

Cuprajake

there was a clip on lbc i think it was, were the £2000 scrappage scheme, the cheapest compliant used car was £15000

Mikeyb

Twotone2

I felt that pain. Had to invest in a euro 6 black cab so I could continue working. Both our cars are fine heading into Glasgow but the cab wasn’t. I’m off to work now.

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