car finance/insurance how does it all work?

[Zornyan]

Just wondering really what the best way to finance cars is nowdays? Just been thinking over the last few months it would be nice to get a newish car for myself / the Mrs.

I love tinkering with old cars, but it's always needing some work and there's always a compromise for performance/ comfort as it's daily used. Plus I'd rather rack up miles on a normal car as opposed to my pride and joy.

Now I've been looking at 335i's lately, think their pretty good with a remap, and my mates e9x seems a nice daily commuter.

So is it best nowadays to just save up and throw 13-15k at a car? Or personal loans with good interest better?

Or one of the many finance options around from both main dealers and private traders? They all offer their own advantages. Just wondering what some people on here have gone with.

[Mark]

So is it best nowadays to just save up and throw 13-15k at a car? Or personal loans with good interest better?

Well thats all down to how impatient you are and how long it would take to save up that amount. Obviously the cheapest way is to save up

[Zornyan]

Well I could chunk 5k down now for instance on something fairly decent, would probably take me about 8-12 months if not more to get another 10 for a decent car to keep for a while Due to us moving next month and the usual fun things in life.

Just thinking how much would it be for instance if I put 3k down and then left some as savings in the bank then just had affordable monthly payments. Plus places like bmw seem to offer free insurance and servicing for a period of time to boost the deal.

[AdamRPS13]

I would suggest a lease scheme rather than finance, the problem with finance is the repayments end up being a few grand extra on what the car cost when you bought it, and its worth half as much when you sell it. But with a lease scheme you have the car for a year, the payments are normally less, or slightly more if the deal includes insurance/warranty etc and you give it back after 12 months and get another one.

[Mark]

I would suggest a lease scheme rather than finance, the problem with finance is the repayments end up being a few grand extra on what the car cost when you bought it, and its worth half as much when you sell it. But with a lease scheme you have the car for a year, the payments are normally less, or slightly more if the deal includes insurance/warranty etc and you give it back after 12 months and get another one.

Thats what I do

I know people say its never yours and its like throwing money away but cars depreciate so quick, you get a loan for £10k, it costs you 13k and when you have paid it off the car is worth £5k and you have spent another £2k keeping it on the road.

New cars are cheaper to insure, no MoT to worry about, it breaks you hand it back and get it fixed and are generally cheaper to tax.

[Zornyan]

You lease from ford right? Obviously it helps that you work there is imagine. Never leased a car so not sure how it works. What about things like scratches and minor dings that happen in day to day life?

Servicing has to be done at main dealers? Expensive? Same for repairs?

What about specs and options? What kind of monthly costs do you roughly get?

[AdamRPS13]

Thats what I do

I know people say its never yours and its like throwing money away but cars depreciate so quick, you get a loan for £10k, it costs you 13k and when you have paid it off the car is worth £5k and you have spent another £2k keeping it on the road.

New cars are cheaper to insure, no MoT to worry about, it breaks you hand it back and get it fixed and are generally cheaper to tax.

Exactly mate. My dad has done it for years with vans. And where i work they offer a lease scheme on the new mini's and some of the lower spec bmw's with the option to buy them at the end of the scheme for a lump sum. I unfortunately don't have enough service with the company yet to be eligible for one, but as soon as i am i'll be doing it.

[Jonny Wilkinson]

Work out what you can afford then see what you can get for the money.

I chuck 5K into my car/bike fund every year which is roughly 400 a month so lets use that as a "reasonable" figure.

If you lease you will get a nice shiny car for 400 a month that will be reliable and you can change it every x number of years but, at the end of it, you have nothing to show for it. Get the right deal and it won't cost you anything much apart from the lease deal and petrol. Its safe but its important that you see it as dead money.

If you go with lease purchase or a car loan or whatever, the car is yours at the end of it. That can be good or bad. You are taking the risk that it is going to devalue faster than you can pay off the loan. It also limits your options when selling the car as most private buyers will insist that you pay off the loan before they buy the car.

As I said, I have a car fund and that is the cheapest option for the sort of cars I buy and own and the most flexible. I sell a car whenever I feel like it and dump the money back into the fund. I then buy another one from the car fund (leaving the excess in the car fund if the one I am buying is cheaper than the one I sold). If the money in the fund gets low, I chuck a bit more into the fund but consider that a bonus rather than "just the cost of cars".

This gives me maximum flexibility and, subject to funds, I can even buy another car before selling one (if I can find somewhere to park it). That means I have more time to find the right car.

In all cases I try to keep the depreciation on the cars below the 5K/year so that the fund increases over time to allow me to buy nicer cars.

I do cheat occasionally though by buying something out of budget and stealing the money from our retirement fund when Sue's not looking

[Mark]

You lease from ford right? Obviously it helps that you work there is imagine. Never leased a car so not sure how it works. What about things like scratches and minor dings that happen in day to day life?

Servicing has to be done at main dealers? Expensive? Same for repairs?

What about specs and options? What kind of monthly costs do you roughly get?

They generally have a 'wear and tear' stipulation, any excess will mean you get a lower trade in value towards your next car and therefore could push your payments for your next car. Servicing doesnt has to be done at the main dealers but you are an idiot if you dont as again they will knock you on trade in. First service cost on a Ford is £130-180 depending which dealer you use. Repairs will be done under warrenty so not a problem.

Specs and options is all down to you. Monthly cost will depend on deposit, if you go low (£500) then expect to pay around £200 for a mid spec Fiesta to around £500pm for a Focus ST or mid range Mondeo.

All the above refers to Ford Options and most manufacturers do their own version with similar rules. Leasing from a lease company is slightly different I think.

[Jonny Wilkinson]

They generally have a 'wear and tear' stipulation, any excess will mean you get a lower trade in value towards your next car and therefore could push your payments for your next car. Servicing doesnt has to be done at the main dealers but you are an idiot if you dont as again they will knock you on trade in. First service cost on a Ford is £130-180 depending which dealer you use. Repairs will be done under warrenty so not a problem.

Specs and options is all down to you. Monthly cost will depend on deposit, if you go low (£500) then expect to pay around £200 for a mid spec Fiesta to around £500pm for a Focus ST or mid range Mondeo.

All the above refers to Ford Options and most manufacturers do their own version with similar rules. Leasing from a lease company is slightly different I think.

Are you on lease purchase rather than lease hire then Mark ?

Ollie, Watch out for the "tie-in" too. Mark's not bothered as he works for them but some of them make it hard to go to another manufacturer for your next car, softly tying you into an upgrade cycle.

If you want to run a deal past me, just drop me a PM if you like. I used to work for a leasing company so know some of the things to look for.

[Mikesx13]

My brother got finance on a merc, bought for 12k, 3 years later the loans paid off and it's still worth 10k. I thought that was pretty good going really

[Zornyan]

Ideally I'm looking at approved used cars at dealers. Noticed just looking through the web a few clean low mileage 335i with decent spec for 12-14K.

So was hoping to make it near enough 10k straight on the finance with a view to own it at the end, I'm hoping with something like that, in a couple years it won't loose huge value, and it leaves me the options later down the line of adding mods (who wouldn't remap one!?)

So that's why I'm looking at 10-15k cars from dealers /traders that do decent finance packages. Either that or I just get a loan out for the sum.

[Zornyan]

What's got me tempted is originally I was looking at something like an e39, but for a tidy one I'm looking at 4kish, then with my undoubted ocd that needs to keep everything tip top, I'll easily spend another 3-4k brining it up to scratchJust because of age and wear n tear.

So I though would it make more sense to just chuck a couple grand down on something fairly new and reliable with warranty, pocket the extra cash and just spend a few hundred a month over a few years to then own a car

[Jonny Wilkinson]

Generally, you will get a better APR on a personal loan than on a finance package. The dealer will steer you towards the finance package as they get paid a whopping commission.

Also, most personal loans won't have a lien on the car itself so they won't repo the car if you find you have to miss a payment for whatever reason.

The best deal will be had by arranging the loan and going to the dealer as a cash buyer with no part ex. If you have 4K arrange a personal loan for £11K then take only what you need when you agree a price i.e. take between 6K and 11K for a 10K to 15K car.

Have a definite figure in mind for the car and try to get it for less. Once you are at your max walk away. Its surprising how often they will call you the following day and say yes to your best offer.

When I bought the Nissan back in 97 they bid me up to 10K and I said "offer is good for today only" and walked away. They called the next day and said OK. I said "Sorry, no deal" £9500 They hated me but they sold me the car.

[Jonny Wilkinson]

My brother got finance on a merc, bought for 12k, 3 years later the loans paid off and it's still worth 10k. I thought that was pretty good going really

What Merc ? Most in that price range are SLs or CLs of around 2002-2006 and make an odd ticking noise

[Zornyan]

What Merc ? Most in that price range are SLs or CLs of around 2002-2006 and make an odd ticking noise

Kind of like a time bomb?

Looking at a 10k loan with someone like tescos over 5 years it's about 185 a month, works out about 11ish total repay. So seems fairly reasonable.

[Jonny Wilkinson]

Kind of like a time bomb?

Looking at a 10k loan with someone like tescos over 5 years it's about 185 a month, works out about 11ish total repay. So seems fairly reasonable.

I'd definitely recommend you pay it off quicker than that. Nobody needs a car loan hanging over them for 5 years if they don't need it.

I'd go 3 yrs max. 2 if you can do it.

[arry]

, you get a loan for £10k, it costs you 13k

Need to finder a loan at a better interest rate. I took out a 14.6k loan last year that repays less than 16.5k.

[Zornyan]

Yeah just looking tbh 3 years only 70 quid more a month, so could be a good option.

[Zornyan]

Just as a rough work out it seems to be about 800 pounds interest on a 10k loan