Most of the dealers here offer upto 8k miles per year and my credit score isn't too bad,I hardly do more than 5000 miles a year anyways so 8k is like a big hop for me.I have got a car worth 3500 pounds now and am thinking of selling that so that can buy a newer one.
Look bro, If you have £3500 to put as a deposit and have good credit rating, I will suggest you go for a brand new car. I will give you advice, the approach I use, even for very expensive cars. So I am sure it would help you a little.
You know that most car dealers offer PCP deals, in which you pay deposit and pay installments over (generally) 3 years and at the end of the period you pay final (future valuation) payment to own the car outright or go for a new car once again.
The issue with this option in my opinion are;
- It may seems that you are paying a smaller payment i.e. £200 pm. Which looks affordable on the surface.
But remember to own the car outright, you still have to pay the final payment, which for argument sake say is £8000. This amount is realistic for a small/medium size car in the UK as a final payment.
- That means that you have to save another £8000 in 3 years (36 months) to own the car outright. i.e. £222 pm.
- Therefore as a matter of fact you have to keep £422 a month to own the car outright in 3 years time.
This is an expensive and not a suitable way to buy a car. Provided you have good credit rating. Get a loan from a a bank to cover the full cost of the car minus the deposit of £3500 you have. For example if the car is worth £18000-£3500=£ 14,500 loan. It probably would cost you may be £100 extra in payment rather than £200 installments.
But another advantage of this approach is that the car is yours from the first day rather than owned by the finance company until you pay off the final payment of £8000, for which you probably would need another loan anyway.
Secondly it would save you plenty of money in interest too. The finance company charge higher rate. typical rates are 6.99% APR to 10.00% APR.
I gave a simple example of me buying a Land Rover 1.5 years ago.
I decided to get a loan of £30,000 from a bank at the rate of 2.5% over 3 years, which costed me around £1500 interest. The rest of £24,000 I paid cash. The car was mine from day one, with no restrictions on use and millage.
If I didn't get the loan, the equation would have been something like this, £14,000 advance, 36 monthly installments of £499.00=£17,964 and final payment of £28000 Total payable £59,964.00 including a interest element of close to £5000. Remember you pay interest on the final payment of £28000 too when you use PCP option.
I was able to pay my loan early in less than 1.5 years and now the car is mine 100% with no payment to make.
I only paid less than £800.00 in Interest by settling the loan early.
The other good option is to chose a car, where dealer is offering 0% finance, as long as the usage annual limit is not a problem. In that case you can try to save the money for final payment and own the car outright after 3 years.
If interest is involved, financing it through bank loan is far far better option, it would save you over £1500 in interest even for a smaller and cheaper car.
I would do neither. It's burning money for 5k annual mileage.
You've got a Vauxhall, it will give you troubles.
Personally, I would buy a 2nd hand Merc S class diesel for the kind of annual mileage you are doing. These are solid cars if you get it checked thoroughly before buying. 2007 E class is also very good.
My S class is touching 190k miles and still going strong. It's serviced and maintained regularly and no big expenses so far. Done 50k miles in last 2 years alone.
So all depends on you wanting new for more money or nicer older car for less money.
I had a new S class of 2017. I gave it up and gone for Land Rover. Yes, they are very nice cars, pleasure to drive, but very expensive to run and maintain.
It costs over £100,000 in the UK to own a new S class. Not everyone's cup of tea.
