First car - financial suicide? Watch

VarunS1
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Looking to get a first car. I will be 17 soon but my parents are encouraging to me get my first job which means finance is an interesting proposition to me although I haven’t mentioned it yet to my parents.

Seat are doing a £3000 deposit contribution on a new Leon, I got a quote back for £13250 for a brand new unregistered Seat Leon 1.0 SE in any colour (metallic paint is a free option) with no options (comes with basically everything anyone could need standard)

This makes the car’s finance amount £6728 assuming I put £2700 as the deposit including SEAT’s 6.8% APR from 0-30% deposits.

Over 4 years this makes it £140pm.

Good deal or financial suicide for a 16 year old? Or take the PCP and exit within 14 days (to own the car for a reduced cash sum) then pay back the cash to my parents on 0% interest?
My parents would cover the deposit and insurance, they have already said. Insurance is c.£1300, fully comp on a new driver.


It makes a welcome change, and Leon’s are not that great to buy used as the cash difference from a new and used model is negligible at the moment.

Refuse to buy a horrid car simply because it is new and cheap. Don’t flame me, I just won’t. I’ve been looking at MK4 Golfs as an alternative, but my parents say it’s too old. They suggest the Up!/Citigo/Mii facelifted trio but they seem awfully overpriced for what they are with 2017 on Move Up models costing upwards of £6500.? The new Polos have not dropped below 10 grand either.

Shortlisted (due to their looks and cheap insurance):
2013 Honda Civic 1.4
2013 VW Golf 1.2
2017 VW Up! beats
2016 Skoda Fabia
2013 Toyota Yaris
2016 Mini One
2018 VW Polo (hoping to depreciate)
2018 Seat Ibiza SE Tech
2019 Seat Leon



Although a car enthusiast, I’m not a boy racer type so want 4/5 seats, Bluetooth/Apple carplay connectivity, a decent interior and something that is not as slow as a snail and is good on the motorway (to get to school).
I want to keep this car for a long time and get a much more fun second car (Civic Type-R FK8 cant be a bad aim by 25? lol) in the coming years. Hence why I’m leaning towards the Leon. It will be replaced soon but there are great deals on it at the moment.

I did get quoted £10995 on a brand new Seat Ibiza SE Technology but the PCP contribution is only 1500


Cheers
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User2737739292
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I think buying a new car , when you’ve only just started driving it a bit silly. One you can’t afford it on your own. Two you’d be a new driver, chances are even if you are the best driver you might smash it or ruin it. I’m not suggesting getting a old and cheap car but maybe don’t spend thousands on it... get an in the middle car. Once you become confident with driving sell the car and get a new one!
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VarunS1
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I didn’t mean for two threads to be opened , I posted this hours ago but it was pending so I assumed it didnt go through.

Could mods delete this ?
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Emma:-)
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(Original post by User2737739292)
I think buying a new car , when you’ve only just started driving it a bit silly. One you can’t afford it on your own. Two you’d be a new driver, chances are even if you are the best driver you might smash it or ruin it. I’m not suggesting getting a old and cheap car but maybe don’t spend thousands on it... get an in the middle car. Once you become confident with driving sell the car and get a new one!
Exactly.
Even an old and cheap car at your age is fine. Its your first car. You might have the odd scape. Once you have been driving a couple of years then you can get something better.
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Dunnig Kruger
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You make it sound like the cost of buying the car is the only cost you'll have over the next 5 years.
Add in insurance, road tax, fuel costs, new tyres on the front every 20,000 miles and 40,000 on the rear. Possible servicing and repair costs.

There's a high chance you'll have an accident in it. Not necessarily one that's your fault but possibly one that's the fault of someone else where you weren't sufficiently experienced to anticipate their mistake.

What sort of a job will you have? If it's a minimum wage type job, it's madness to buy a brand new car. If you'll be a Premier League footballer, go ahead and buy it.

I'd rather be in a 15 year old large diesel engineed Volvo, BMW, Merc, Audi than a 2019 Seat Leon - regardless of the cost. But then choice of cars is a highly personal thing.

Buy a banger for £200. Or a not such a banger for £200 to £2000. Don't put a financial millstone round your neck.

Are your parents car nuts? If not, ignore their advice on cars. Your first car should be about as old as you, give or take 5 years.

Bricks and mortar - using £13k as a deposit for a house - would be a far sounder investment than a brand new Seat Leon.
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TheMcSame
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Dunning is pretty spot on, although most of those costs apply to any car regardless.

Though I will say a few things:
Newer cars tend to be one of two sorts. Hell on Earth for the first few years or sound as butter until they get towards the end of their life.
Newer cars also come under the 2017 tax brackets which is a flat £145 a year.

My advice? Don't bother with a new car as your first car. There's plenty of horror stories out there of people buying a new car for their first car and crashing it the same day, or later that week. Buy an older diesel, their design makes them inherently more reliable since they're built to withstand the pressures of combusting diesel and, at least imo, a smaller diesel is just far more pleasurable to drive than a small petrol.

If you seriously insist on something newer, you'll likely find a similar model with a higher spec for less being sold as used. One registered before 2017 would also be taxed using the old tax band which, for a 1.0-1.6L engine (the sort of size you'd be looking at for a first car), you're probably talking £30 road tax at most for most cars in that range.
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Revolver72
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It depends on circumstances.

My first car was a Skoda Citigo Sport 1.0, when I was 17. I did it on PCP. It was 1000 down, 121 a month for 3 and a half years. I had a stable student job and so had no issues ensuring I could meet the payments. I never had any financial problems with it, and it got me onto the car ladder. For some people, that might not necessarily be possible, if your employment is (for example) a 0 hour contract, or hours fluctuate month on month, but for me it worked.

My girlfriend's first car was a £500 Kia Picanto. In her 3 years of ownership, she's probably paid 3 times the value of the car in parts and servicing costs. However, her hours change regularly, and so couldn't commit to a monthly payment. It's worked for her.

If you have the income to support £140pcm, plus the general costs (servicing, fuel, insurance and tax [ I know you're saying that your parents may cover the costs some of this ]), then it's certainly not financial suicide.

For what it's worth, successfully going through a PCP scheme, and making all repayments, is great for your credit rating too.

Incidentally, I am a car enthusiast, and it's so nice to see someone being sensible and pragmatic. Sure, I'd have loved my first car to be quick. But the 1.0, with some sporty body kit and stripes did the job at the time. You'll work your way up, and your goal by 25 is not unreasonable at all (although, worth remembering new things will come out in that time, so you might find something newer you prefer!)

Worth exploring the Ibiza deal too. You might find it works out cheaper, if they have a larger balloon payment at the end, despite the lower dealer contribution. PCP is literally a numbers game, and is worth exploring all options.
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Aaron702
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(Original post by Revolver72)
It depends on circumstances.

My first car was a Skoda Citigo Sport 1.0, when I was 17. I did it on PCP. It was 1000 down, 121 a month for 3 and a half years. I had a stable student job and so had no issues ensuring I could meet the payments. I never had any financial problems with it, and it got me onto the car ladder. For some people, that might not necessarily be possible, if your employment is (for example) a 0 hour contract, or hours fluctuate month on month, but for me it worked.

My girlfriend's first car was a £500 Kia Picanto. In her 3 years of ownership, she's probably paid 3 times the value of the car in parts and servicing costs. However, her hours change regularly, and so couldn't commit to a monthly payment. It's worked for her.

If you have the income to support £140pcm, plus the general costs (servicing, fuel, insurance and tax [ I know you're saying that your parents may cover the costs some of this ]), then it's certainly not financial suicide.

For what it's worth, successfully going through a PCP scheme, and making all repayments, is great for your credit rating too.

Incidentally, I am a car enthusiast, and it's so nice to see someone being sensible and pragmatic. Sure, I'd have loved my first car to be quick. But the 1.0, with some sporty body kit and stripes did the job at the time. You'll work your way up, and your goal by 25 is not unreasonable at all (although, worth remembering new things will come out in that time, so you might find something newer you prefer!)

Worth exploring the Ibiza deal too. You might find it works out cheaper, if they have a larger balloon payment at the end, despite the lower dealer contribution. PCP is literally a numbers game, and is worth exploring all options.
This. I had a cheap 2nd hand car for my first year of driving, then dropped a stupid amount of money on PCP for something I really enjoy. I have a stable income and can easily afford the payments.

Brand new cars are very rarely a money sink as all mechanical problems are covered under warranty and being brand new it's likely not going to break anytime soon.

People on here are against PCP because they can't afford it. It's no different from a phone contract and as long as you have stable income (a full time or decently paying part time job) it's no problem.

Edit: A higher trim Ibiza like an FR is likely to be better value than a poverty spec Leon
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Dunnig Kruger
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"My first car was a Skoda Citigo Sport 1.0, when I was 17. I did it on PCP. It was 1000 down, 121 a month for 3 and a half years. I had a stable student job and so had no issues ensuring I could meet the payments. I never had any financial problems with it, and it got me onto the car ladder. For some people, that might not necessarily be possible, if your employment is (for example) a 0 hour contract, or hours fluctuate month on month, but for me it worked.

My girlfriend's first car was a £500 Kia Picanto. In her 3 years of ownership, she's probably paid 3 times the value of the car in parts and servicing costs. However, her hours change regularly, and so couldn't commit to a monthly payment. It's worked for her."


Let's have a look at these 2 deals.
PCP cost for 42 months = 1000+42x121=£6082
Plus you have to have to hand it back or make a balloon payment to keep it.

Kia Picanto
Extrapolated cost for 42 months = £500+3.5x 500=£2250
Plus she could have kept it, or sold it for approx £250.
OK it's an older car, but the upside is she'd be totally flexible on how many miles she did in it. No penalty clauses for going over her estimated number of miles. And it's less stressful in terms of having an accident or parking ding in it.

I think the £4k difference over 3 and a half years is not to be sniffed at. Even if I had the money, I'd still take the £500 Picanto over the new PCP'd Citigo.
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Admit-One
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(Original post by Aaron702)
People on here are against PCP because they can't afford it.
Most people against PCP own vehicles outright. Which is initially a more expensive option.

You'd have to have an horrendous credit rating to be turned down for PCP, they're very low risk for the lender.
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nevershear
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Financing a first car is stupid, take it from someone who did it and regrets it. You also won't be able to finance a car unless you're 18, your parents could for you, but then you'll be in the awkward grey area where a lot of lenders prefer the person paying the debt to be the main driver of the car. For example on my Fiesta, only I can be named as a main driver on the insurance. The 1.0 poverty spec Leon is also terrible. Has no punch for the weight the car is and for similar money the Ibiza FR is leagues above it as a first car.
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Revolver72
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(Original post by Dunnig Kruger)
"My first car was a Skoda Citigo Sport 1.0, when I was 17. I did it on PCP. It was 1000 down, 121 a month for 3 and a half years. I had a stable student job and so had no issues ensuring I could meet the payments. I never had any financial problems with it, and it got me onto the car ladder. For some people, that might not necessarily be possible, if your employment is (for example) a 0 hour contract, or hours fluctuate month on month, but for me it worked.

My girlfriend's first car was a £500 Kia Picanto. In her 3 years of ownership, she's probably paid 3 times the value of the car in parts and servicing costs. However, her hours change regularly, and so couldn't commit to a monthly payment. It's worked for her."


Let's have a look at these 2 deals.
PCP cost for 42 months = 1000+42x121=£6082
Plus you have to have to hand it back or make a balloon payment to keep it.

Kia Picanto
Extrapolated cost for 42 months = £500+3.5x 500=£2250
Plus she could have kept it, or sold it for approx £250.
OK it's an older car, but the upside is she'd be totally flexible on how many miles she did in it. No penalty clauses for going over her estimated number of miles. And it's less stressful in terms of having an accident or parking ding in it.

I think the £4k difference over 3 and a half years is not to be sniffed at. Even if I had the money, I'd still take the £500 Picanto over the new PCP'd Citigo.
And that's unquestionably fine. That's literally the entire point I am making, it's buyer's choice and circumstantial.

For you, the £500 Picanto is fine, and you're happy to absorb large bills intermittently. This is the outlook my girlfriend has. That is your prerogative.

For me, I had a stable income wanted to save money for other things, like a deposit for my house. By paying 121, plus running costs, it enabled me to set aside the same amount per month to eventually invest my capital in something that didn't depreciate like a car, and never have to budget for a random car-related bill as I knew my car was covered by a warranty.

It would be ridiculous to assert that everyone should go for PCP, because it's unequivocally untrue, but I just don't get why people are so anti-PCP existing. 4k difference over 3 and a half years is not something to discount, but a newer car has newer technology, better economy, greater reliability. I get the same use of the car as my girlfriend gets of hers.

My usage of my car, and my girlfriend's use of her car were very comparable. Same number of miles, and some types of trips. Over 3.5 years, I paid £4k more than she would. Given that one car is £500, and one is literally 20 times that cost, I feel that's not too bad going. I get how you're trying to spin it, but it's not as linear as that, I'm afraid.

At the end of the day, it's at the discretion of the buyer to decide whether they want a newer/better car and to subsequently spread that cost, or whether they want to buy a cheaper car, and absorb the cost of unpredictable larger bills. I know what I'd prefer, and I know other's prefer the opposite.

That's the joy of having these options.

FWIW, I now use HP on my SQ2, so at the end of my 4 years, it will be mine. I have a cracking car, that will be mine, and I'm spreading the cost of depreciation, rather than losing all my capital at once. I've bought outright, I've used PCP, and now used HP. I'd advocate that at the time of purchase, you just choose what works for you.
Last edited by Revolver72; 1 month ago
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