Buying a new (ish) car with a loan ?

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  • Buying a new (ish) car with a loan ?
  • Offroading
    Member

    Been mulling this over for a while now, funny thing i would have never considered a loan until my GF pointed it out.

    I’m looking to buy a 2012/13 Audi A1, obviously not brand new but a year old max. Going price for the spec i want is around 18K

    I’ve never been keen on these PCP and HP car plans, cost a bomb.

    My bank with whom i’ve been with for years are offering me a 10K loan with 5% interest over 4 years. So just slightly over £11k repayable.

    I’d stump up the rest of the money of course.

    Anything im missing ? seems a better deal than paying £22k for the car on HP etc

    GJP
    Member

    Take a look at M&S car loans where you can defer a residual amount a bit like PCP etc but you own the car from the outset. You can probably do better than 5% without looking too hard, if you are a good customer with your bank see if they can do an off tariff loan Hsbc did one for me a while back.

    stumpy01
    Member

    HSBC are currently doing 4.8% loans, as are Barclays I think. My Wife has just bought a 12 plate Ibiza doing what you have suggested. Used her pile of crap 308 as a deposit and used a loan for the test. The dealer tried to get her to take the finance, but it was about £50/month more expensive!

    Premier Icon wiggles
    Subscriber

    Just be aware of what could happen with insurance claim.

    Eg. Car stolen after a year, insurance pay market value of 7k you still have 9k worth of loan to pay.

    earl_brutus
    Member

    Get an a3 the a1is tiny inside

    FunkyDunc
    Member

    Why discount new? It might not work out any more expensive. Don’t dismiss PCP either so long as you keep the deposit low ie no more than £500.

    I did a big nerdy spreadsheet comparing the running costs of buying a new car versus slight 2nd hand, and over 3 years there was not much in it, except buying slight second had more hassles with it. That was all based on getting rid of each car after 3 years ownership

    CaptainSlow
    Member

    wiggles – Member
    Just be aware of what could happen with insurance claim.

    Eg. Car stolen after a year, insurance pay market value of 7k you still have 9k worth of loan to pay.

    POSTED 6 HOURS AGO # REPORT-POST

    +1

    If you are buying a new ish car, take out Gap insurance too.

    Never take it from a dealer, google it and arrange your own policy. If you are buying on tick, you really should get Gap insurance as it is not expensive and covers any shortfall between purchase price/outstanding finance and what the car insurance will pay.

    b r
    Member

    The cheapest option is to just spend the money you’ve already got, and £7k will buy you a decent 3-4 y/o low miles car.

    iolo
    Member
    alanf
    Member

    Check out the dealer finance rate first.
    The last 2 have been way better than any loan rates (better than your 5%).

    Premier Icon jam bo
    Subscriber

    Just be aware of what could happen with insurance claim.
    Eg. Car stolen after a year, insurance pay market value of 7k you still have 9k worth of loan to pay.

    Or don’t buy a rapidly depreciating asset with money you don’t have…

    edward2000
    Member

    Br + 1, the Audi you are looking at has a lot more depreciation to do yet.

    mrmo
    Member

    I would think why do you want an 18k Audi, it is your money, well it isn’t it is the banks…

    How long do you intend to keep it for a start, work out the residual value, will buying it outright and selling on make more sense than a PCP and handing the car back at the end of the contract.

    Look at dealer incentives, it isn’t unusual for a new car to be no worse than a 1 year old car.

    Finally do you really need an 18k tin box for moving you around? Being blunt, an A1 is an expensive Polo/Ibiza/Fabia.

    Pieface
    Member

    If I was spending 18k on a new car I wouldn’t be spending it on an A1. Its a tiny car, proper hairdresser, but each to their own.

    A3 is far better bet all round IMO.

    Premier Icon tonyg2003
    Subscriber

    Wanting a car like a new A1, I’d check out leasing deals. You can pick one up for less than £200 per month. I’d imagine that even a 1yr old £18K A1 will depreciate more than that over 3 years?

    hammyuk
    Member

    £8.5k will get you a one owner A3 S-Line Sportback 170 DSG 😉

    mrmonkfinger
    Member

    obviously not brand new but a year old max

    To me, it doesn’t make a lot of sense to aim at the “1 year old” mark. 3 years makes better sense, a big chunk of the depreciation is done, and a 3 year old car is still a reliable machine. IMO and all that.

    tonyd
    Member

    I’d go for a 3 year old car also for the same reasons as above. You’ll get much more car for your money. I also wouldn’t bother with an A1.

    That said it’s up to! I can’t see any problem with using a bank loan over something PCP. I did it myself once in my yoof and have never taken finance from a car dealer. I’d definitely be shopping around for rates though, first hit on Google was 4.6% so you can almost certainly do better than that.

    clubber
    Member

    I’d go for 2 year old as it goes – most of the really bad depreciation is gone and you at least have a year under warranty to get to know if it’s a friday afternoon special so you can sell it on before you have to pay for repairs.

    But +1 on the not borrowing for a rapidly depreciating asset on finance. In the past, I’ve paid for part of a car with interest free credit but only when I’ve had the same amount in the bank (so I could pay off the loan at any time)

    Premier Icon Flaperon
    Subscriber

    What actually happens with GAP insurance is that they say, “We think your car was worth (ex.) £15,000 at the time of write off, but your insurance company has only given you £12,000. We think they should have given you more, so we’ll only give the difference between purchase price and £15,000.”

    Offroading
    Member

    Sorry for the slow reply, was away with work.

    A few fine points above. The 3 year mark would make better sense.

    To outline a few things:

    I am a mechanic and thus will take care of the car myself, i plan on buying something 3 years old max and keep it for years. Probably 5 ish years so yes i want to own the car. I’ve no interest in getting something new every 3 years.

    I like the A1, i sat in the A1 and A3 and once the seat was adjusted the space for me was the same, the rear space was only about an inch better on the A3. Add to that the A3 is fugly 😆 My liking for the A1 is due to parking, sadly its a priority for me as spaces round here are rare at best.

    djglover
    Member

    You can get a credit card from virgin that will let you transfer the money into your account for a flat fee of 4%, interest free after that for 26 months. was cheaper than any loan I could find.

    Premier Icon tthew
    Subscriber

    The gap insurance recommendations sound daft to me if you have £8k worth of depreciating to do before it’s needed.

    Premier Icon teethgrinder
    Subscriber

    If parking is sparse, is it likely to get bumped a lot?

Viewing 24 posts - 1 through 24 (of 24 total)

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