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How is buying a new car ever more cost effective than buying a new one? Watch

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    I am still considering getting a new car (brand new or second hand, not yet decided).

    I found a nice brand new car that I quite like. I can get it on finance for less than £200 per month. However. If I bought this car, it would cost me about £10,000 over three years inc deposit and fees and then I would have to return it, so after 3 years I have paid £10k and will be left without a car unless I fork out another £7k or refinance it.

    Now if I bought a £10k second hand car, say 3 years old, it would blow my savings, but I would own it- therefore after three years I could sell it for say £6k and it would have only cost me £4k- substantially less than £10k for a new one.

    Am I missing anything?
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    Why don't you take out a low interest loan (4.3%), and then buy a second hand car? That way you still keep savings, own car, and could sell at any point.
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    (Original post by Friggerpants)
    Why don't you take out a low interest loan (4.3%), and then buy a second hand car? That way you still keep savings, own car, and could sell at any point.
    Where can a 19 year old get a low interest loan? (That's not being sarcastic btw, just a question!)
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    Unless you are buying a car that is worth more used than a new one, it is very unlikely without some kind of tax incentive that it is cheaper to buy a new car than it is to buy new.
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    This is my dilemma as well :pinch:
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    (Original post by Alfissti)
    Unless you are buying a car that is worth more used than a new one, it is very unlikely without some kind of tax incentive that it is cheaper to buy a new car than it is to buy new.
    What are you talking about lol?

    Anyone else confused about the title?

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    If you buy from a established dealer then they may give you a finance plan which suits you

    I'm not sure though, I've owned quite a few cars but I inherit them after my dad/brother get brand new ones
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    (Original post by Runninground)
    Where can a 19 year old get a low interest loan? (That's not being sarcastic btw, just a question!)
    If you got a good credit rating, anywhere.

    Last one I had was with Clydesdale bank. You'll never know unless you apply!

    (sainburys offered me 8% on a loan, while Clydes was 4.3%, everyone has different lending criteria)
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    (Original post by Runninground)
    Where can a 19 year old get a low interest loan? (That's not being sarcastic btw, just a question!)
    I think that depends on who you're working for? I mean we can get 25% off all new Vauxhall cars, and because of the benefits package, Id imagine we're deemed good enough for the 0% finance

    That being said, I wouldn't get a Vauxhall. Most of the company cars are VW bluemotion golf's... though that's going on a slight tangent
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    (Original post by de_monies)
    I think that depends on who you're working for? I mean we can get 25% off all new Vauxhall cars, and because of the benefits package, Id imagine we're deemed good enough for the 0% finance

    That being said, I wouldn't get a Vauxhall. Most of the company cars are VW bluemotion golf's... though that's going on a slight tangent
    I'm employed by big local accountancy firm... and I'm on a 4 year training contract so it's pretty safe to say I have a secure job for the next 4 years. What do you mean you can get 25% off Vauxhall cars? As part of your employment? I can't get a company car though (boohoo )
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    Sometimes, garages offer 0% finance on some cars. Thats worth looking out for.
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    (Original post by Runninground)
    I'm employed by big local accountancy firm... and I'm on a 4 year training contract so it's pretty safe to say I have a secure job for the next 4 years. What do you mean you can get 25% off Vauxhall cars? As part of your employment? I can't get a company car though (boohoo )
    Yup it's a part of the package, BUT the company is a large company so...

    I can't get a company car either, and I come to the end of my contract (read placement) at the end of this month any way

    Might be able to get your 0% finance if you buy direct from the manufacturer?

    Tbh, I'd get a 2010 car if I were you, that's done around 40K on the clock, because they don't tend to depreciate as fast, after 4 years.. The first 4 years of cars (Well cars I've looked at), you'll see the value go to half of what it cost when bought brand new

    And tbh, in 4 years, you'll have like one owner, most likely...
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    (Original post by Friggerpants)
    If you got a good credit rating, anywhere.

    Last one I had was with Clydesdale bank. You'll never know unless you apply!

    (sainburys offered me 8% on a loan, while Clydes was 4.3%, everyone has different lending criteria)
    Clydesdale can only offer 4.3% to existing customers under 23 year old. Nationwide (who I am currently with) can do 5.9% (per their website).

    I'm quite liking this loan idea... as then I can make the repayments from the money I would otherwise use as a deposit, which would cover the repayments for a while.
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    (Original post by Runninground)
    Where can a 19 year old get a low interest loan? (That's not being sarcastic btw, just a question!)
    That is income dependent, most manufacturers offer sub-5% offers for their cars that for as long as your credit file is good and you have steady income then you can qualify for it.

    As for 0% that one tend to be on higher value cars and usually the fine print will tell you that it is 0% only for the first 12 or 24 months and then it goes up.

    If you are looking for easy finance offers then Marmalede isn't bad especially taking into account insurance is included.
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    (Original post by de_monies)
    Yup it's a part of the package, BUT the company is a large company so...

    I can't get a company car either, and I come to the end of my contract (read placement) at the end of this month any way

    Might be able to get your 0% finance if you buy direct from the manufacturer?

    Tbh, I'd get a 2010 car if I were you, that's done around 40K on the clock, because they don't tend to depreciate as fast, after 4 years.. The first 4 years of cars (Well cars I've looked at), you'll see the value go to half of what it cost when bought brand new

    And tbh, in 4 years, you'll have like one owner, most likely...
    I looked on the manufacturers website and on new cars it's 4.9% APR but on second hand cars it's something like 7.9% (on PCP).

    Or can manufacturers organise loans at loan rates with a partner bank or something?
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    (Original post by Runninground)
    I looked on the manufacturers website and on new cars it's 4.9% APR but on second hand cars it's something like 7.9% (on PCP).

    Or can manufacturers organise loans at loan rates with a partner bank or something?
    I'm not entirely sure tbh. If you can get a 0% credit card, that might be something to look at at as well?
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    (Original post by Runninground)
    I am still considering getting a new car (brand new or second hand, not yet decided).

    I found a nice brand new car that I quite like. I can get it on finance for less than £200 per month. However. If I bought this car, it would cost me about £10,000 over three years inc deposit and fees and then I would have to return it, so after 3 years I have paid £10k and will be left without a car unless I fork out another £7k or refinance it.

    Now if I bought a £10k second hand car, say 3 years old, it would blow my savings, but I would own it- therefore after three years I could sell it for say £6k and it would have only cost me £4k- substantially less than £10k for a new one.

    Am I missing anything?
    You want HP financing rather than PCP financing

    If you have the credit rating to get PCP on a new car then you should be able to get HP on a used car
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    It's not especially hard to find new cars with 0% APR financing. Or you could go for a cheaper new car that you can buy outright. There are quite a few new car models under £10,000.

    A new car often comes with perks such as a warranty, free servicing, free insurance or breakdown cover. Because it is new, it is likely to save you costs in breakdowns and repairs, and you may not feel a need to buy breakdown cover for it.

    A new car currently does not need any MOT until it is 3 years old, and this requirement is likely to change to 5 years before it reaches that mark. Hence you could be saving 4 MOTs.

    If you want to hit the depreciation curve a little further along, you can buy a nearly new car (under 1 year old, mileage usually under 1000), which can knock 15% off the price, and often still comes with the aforementioned perks. Although it is very rare to find a decent finance plan for these, you will usually have to buy outright.
 
 
 
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