Should I buy or hire purchase my next car?

I've always bought cars with 70,000+ on the clock, VW Golf TDI, BMW 320 d sport etc. So I can get a nicer (but older) car for my money (around £7, 000). However I'm now thinking of getting a more recent car, 3 years or younger, SUV type (for a growing family).
What is best for you're money. Buy a 2 to 3yr old and sell in a few years at a loss, or do hire purchase (or whatever it's called). How much would I loose? Is the peace of mind with HP worth it?
Looking at Quashqui, Sportage or similar.
Thanks

19 Comments

Lease would be my choice. Get a new model every few years. Plenty deals on these now.

Don't buy a 3 year old car they're just at the point imho when things start breaking & not old enough that they'll have already been done. I found tyres were low, brake pads all round, the aircon bracket snapped it cost me more to keep a 3 year old car one the road for 8 months than a 10 year old mondeo Estate that I bought for£500 going for 2 years.

I've done £10k old car, HP, PCP and Lease. Here's my feedback

£10k old car ended up spending so much on repairs etc, such a headache. Was glad when I finally got rid.

HP only go for if you intend to keep the car. You finance the whole value of the car and it can be up to 5 years. You can sell the car but you have to pay off the finance first.

PCP you can get for up to 4 years. You only pay back the depreciation of the car + interest on the large balloon payment at the end. You can either return the car, trade it in (if it's worth more) or pay the remainder and keep the car. The car is almost always worth more than the balloon payment. I've done 2 PCPs and sold privately each time as I got more for the car than the balloon payment.

Lease you pay a deposit, use the car, return it at the end. Simple... except you do get charged for every minor mark on the car or wheels. I got stung £250 last time. You can't put private plates on as you never have the v5.

Sometimes PCP works out better on a brand new car than leasing - especially if you use carwow or similar.

You don't really loose when taking out a lease if anything goes wrong you ain't paying the bill to get it fixed just look at it as paying rent on a house it's just never yours!

dafunq

You don't really loose when taking out a lease if anything goes wrong you … You don't really loose when taking out a lease if anything goes wrong you ain't paying the bill to get it fixed just look at it as paying rent on a house it's just never yours!



That's only if you take out maintenance with it which is usually £50+ more a month otherwise you do have to sort things out, services, tyres, MOT if applicable etc.

Agree and Carwow is really good!

The_IMF

I've done £10k old car, HP, PCP and Lease. Here's my feedback£10k old car … I've done £10k old car, HP, PCP and Lease. Here's my feedback£10k old car ended up spending so much on repairs etc, such a headache. Was glad when I finally got rid.HP only go for if you intend to keep the car. You finance the whole value of the car and it can be up to 5 years. You can sell the car but you have to pay off the finance first.PCP you can get for up to 4 years. You only pay back the depreciation of the car + interest on the large balloon payment at the end. You can either return the car, trade it in (if it's worth more) or pay the remainder and keep the car. The car is almost always worth more than the balloon payment. I've done 2 PCPs and sold privately each time as I got more for the car than the balloon payment.Lease you pay a deposit, use the car, return it at the end. Simple... except you do get charged for every minor mark on the car or wheels. I got stung £250 last time. You can't put private plates on as you never have the v5.Sometimes PCP works out better on a brand new car than leasing - especially if you use carwow or similar.


Growing family. VW T28 combi.....hold their money and come midlife crisis/fall out......hey presto! Surf bus

Why would you sell it in a few years, especially if you are used to buying 70K+ mile cars.
Buying a bit fresher (cars in the 2 to 4 year bracket) limits the depreciation vs new (which is nearly always also factored into lease and hp agreements). Buying fresher also limits potential clocking issues and minimises how much the car could potentially be mistreated by the previous owner so IMO if your intention is to save money going the nearly new route should save you money.
Other things you need to consider going down the lease or hp route will be gap insurance costs and the need to have well documented service history. Having a young family in a car that is subject to inspection when you hand it back may also incur a few additional charges for crayon marks on the ceiling LOL.
I've looked at family hp and lease cars but couldn't get the sums to work on proper family cars. Some very cheap supermini deals about though.
Only my opinion. Good luck either way.

The_IMF

That's only if you take out maintenance with it which is usually £50+ … That's only if you take out maintenance with it which is usually £50+ more a month otherwise you do have to sort things out, services, tyres, MOT if applicable etc.



​Never had any issues getting repairs done on lease vehicle all covered by manufacturer warranty since they are new cars had a few deals including free services so imo cheaper to run then a 70,000+ 3yr+ used car but that's just in my experience yours may be different

thepharmacist

Agree and Carwow is really good!



Last one I used was carfile. Got me a brand new car with dent/interior/alloy protection, gap insurance through carfile for 20% less than retail!

dafunq

​Never had any issues getting repairs done on lease vehicle all covered b … ​Never had any issues getting repairs done on lease vehicle all covered by manufacturer warranty since they are new cars had a few deals including free services so imo cheaper to run then a 70,000+ 3yr+ used car but that's just in my experience yours may be different



I've never had free services included and I've leased 1 personal and 3 business cars. Only ever get free services with PCP deals mainly.

I lease all time. Shop around some fab deals...

You need to sit down and work out what would be best for you.
Drivers that do above average miles - more than 10k per year are better buying (to avoid excess mileage charges)
Also with leasing you will always be paying money for the car (e.g at the end of the 4 years, you hand the car back and begin a new contract - whereas if you bought on finance the car is yours to own and keep at the end of the 4 years)

Buying a 5+ year old car will have massive savings on a new price but will have a question mark on reliability (though you can reduce the risks by properly inspecting the car beforehand and walk away from any that have been abused. Common sense really) It means you wont have to fork out on paying for a car every month other than maintenance and Tax/MOT as and when it needs it.

On the other hand leasing is ideal for those who do low mileage, have a solid income and want a new car every 3/4 years. It means your maintenance is included and no MOT. But beware that if it gets cosmetically damaged, your lease car will need to be repaired before it is returned else you'll be billed. (something one might not bother with on an older car)

Pros and Cons to both.
Edited by: "118luke" 20th Dec 2016

Original Poster

Thanks for the replies, an Xmas of research.
Lease is looking good.

2 more questions
1) Is there really a best time of month/year to get a deal (i.e. the old end of month desperate to hit targets
2) We are looking at potentially 2 cars would be get economies of scale? (i.e has anyone done 2 at the same time and it's worked better than 2 separate deals)

Thanks

Some absolute nonsense in this thread, the only 2 sensible replies I can see are from The_IMF and 118luke.

How can anyone outright say that any method is best? You need to look at the merits of each way of financing the car, the % of the car you will be paying for during the lease period and how much you are likely to lose in depreciation if you were to buy (plus the hassle of selling at some point). There are too many variables to say "leasing is best".

Quite often dealer sponsored ways of financing the car will work out more favorable as they are including a dealer contribution to help meet sales targets. My last 2 cars have been leased because they were fantastic deals relative to how much I estimate I would lose by buying the car outright and selling it in 2/3 years.

Mada06 largely hits the nail on the head.
I'd only add that lifestyle is a factor, so, I do a once a week 500 mile round trip commute at odd hours of the day, and if I don't appear at work because I'm broken down, its going to be a big problem. So, I balance the expense of running a new car with (hopefully) better reliability with the peace of mind that gives me.
I lease, and regard it as an operating cost of my job, just the same as a rail ticket would be. I don't even think about what the car will be worth in three years time as I start with the knowledge that the depreciation costs are being paid for monthly and the final value of the car is the lease companies problem, not mine.

WRT to OP's two additional questions, for PCP deals at a local dealership, get a killer internet quote for the car of your choice then ask the local dealer to price match it. I recently did this in the run up to the last registration change for two cars at an adjacent BMW/Mini dealership who are notoriously tight. I got a modest discount on the Mini and then a killer discount that undercut the best online deal on the BMW.

The_IMF

I've done £10k old car, HP, PCP and Lease. Here's my feedback£10k old car … I've done £10k old car, HP, PCP and Lease. Here's my feedback£10k old car ended up spending so much on repairs etc, such a headache. Was glad when I finally got rid.



But was it a car like he's considering or something much older?

There's a world of difference in reliability between a 2013 Quashqai and a 2006 Range Rover despite both costing £10k.

EndlessWaves

But was it a car like he's considering or something much older?There's a … But was it a car like he's considering or something much older?There's a world of difference in reliability between a 2013 Quashqai and a 2006 Range Rover despite both costing £10k.



It was an older BMW like he had done previously. I was just reassuring him that he's probably looking at this the right way.

I would opt for the 3 year old qashqai.
The major amount of depreciation has gone so if you choose wisely you can still get a good (newish) car with low mileage. If you want to sell after a couple of years you wont lose much or have spent much.

Leasing can obviously also be good if you want/need a new car every 2 years with no maintenence to worry about and the older cars can go wrong, i do get it, but for me it seems like a too larger premium to pay.

Again this is lifestyle/prersonal choice as nobody needs a new car every 2 years and also just because a car is 3+ years old doesnt mean its going to start breaking down and need major money spending on it like many leasers like to think.
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