What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks
Graduate Reliable car - pembsflyer

Probably many variables to this but here goes. My son has a graduate placement starting Augusr 2018. He wil need a car but there is no company scheme. He is talking about getting finance on a car and I am thinking oh no!.

So What is the best way to finance a car? If by finance which makes are offering the best deals? He has been running a 04 plate Clio diesel, is there a scrappage opportunity? He's thinking new or nearly new, I'm thinking 3 year old. (i know some will say it's his money but.... general supporting arguments to give best advice wanted. Big subject iI know!

Graduate Reliable car - badbusdriver

Best way to finance a car is to buy it outright, that way there is no interest to pay. Does he have any savings for this purpose?. If he has to have a new, or newer car, a manufacturers leasing scheme would probably be best as there is a good chance of little or no interest. But that would be aplicable to new cars, and would involve a deposit. Doing some sort of personal lease or finance on a 2nd hand car is likely to be more expensive than getting a loan, assuming he has a good credit rating.

What is the problem with the clio?, if there isn't any, he'd be as well keeping it until it starts costing a lot to get it through it's MOT, and it is unlikely any replacement would be more economical.

Graduate Reliable car - gordonbennet

I'd agree with that, keep thats Clio going as long as possible, little cheaper to run in the real world.

Graduate Reliable car - pembsflyer

Agreed, we absolutely love the little Clio and nothing could be more economic, however it's done 150k and he's 200 miles away so was looking for something a little more refined

Graduate Reliable car - badbusdriver

Buying a newer car is not neccessarily going to be any more refined, that really depend's on what car he want's or is thinking about. I have spent some time driving a clio diesel of a similar age and had no complaints about it's refinement at a cruise. OK it, like most diesel's, can be a little noisy under acceleration, but once up to speed, it is fine. The fact that it has done 150k is also nothing to worry about, as long as it has been serviced regular and had things done when needed, there is no reason it couldn't manage at least another 50k.

Graduate Reliable car - Engineer Andy

Agreed, we absolutely love the little Clio and nothing could be more economic, however it's done 150k and he's 200 miles away so was looking for something a little more refined

If he's owned the Clio for a while, its a known quantity, including the level of maintenance he's had carried out on it. Why not save the large outlay on a much newer car and get some worn parts on the Clio replaced so it runs better. If he has scrimped on the maintenance on the existing car, he almost certainly would on the next one, given he'll have less money in the bank after paying for it.

Best to keep the Clio running witha bit of extra TLC (far cheaper than spending £8- £12k on a replacement [using a car of similar size]) for a couple of years until he gets a job, settles down in it, earns a nice bit of cash (not spending quite so much on nights out as most young blokes do), and saves up for a nice new or nearly new car as well as decent maintenance.

If an employer expects an employee to do a lot of business miles, then they should by rights give them a company car. I suspect as its only a summer job (even if more than one summer over the duration of the dgree course) they won't be requiring him to do much company mileage in it (just from home to work and back) and would normally be accompanying a more senior colleague on trips out, in their car, not his. That's what happened with me as a junior engineer nigh on 20 years ago - I 'got away' with driving my (at the time) little 1.0 petrol Micra around, no problem.

Admitedly your son's Clio has done a large amount of mileage in its life, but as a diesel-engined car built when DPFs and other three-lettered acronymn devices weren't around yet, they were still quite reliable. Unless its been going wrong a lot of late (lots of expensive parts failing due to age rather tha standard wear-and-tear items like clutch, brakes and tyres) or corrosion is bad (especially on structural load-bearing areas), then you may find, with a bit of TLC it can live for a reasonable while longer without too much problem or outlay. It would be different if he'd only owned it for a year or two and knew very little (other than via the MOT search) of its history.

Graduate Reliable car - daveyK_UK
Lease (PCP) a mid spec Dacia Sandero, will be no more than £100 a month with just over £1k deposit and will provide 3 years (or 5 if you get the extended warranty which they throw in for free on PCP deals) of trouble free hassle free motoring while being economical and cheap to insure.

I have advised this to someone else in your situation based on the recommendation of a friend who did the exact same for their child (they had to get the finance in his wife’s name) who had started a job after college and needed a vehicle.
They too have take out a lease this very weekend and they have been given a 7 week build date due to specificying a metallic colour that wasn’t in stock.
If your interested I can find out the exact deal they got? I did tell him to at the least push the dealer to throw in a space saver which are cheap anyway on the Dacia parts and options list.

Edited by daveyK_UK on 02/04/2018 at 19:19

Graduate Reliable car - SLO76
Leasing or taking on a new car via a PCP means your are required to return it afterwards in a saleable condition. Often you’ll end up with a bill for excess mileage or for body repairs even though they seem like minor scuffs and scrapes.

To me the best and cheapest way to buy a car (assuming there’s no big bank account to plunder) is to take out a low rate personal loan which can be had for less than 2.9% APR at most high street banks. Instead of a PCP over 3yrs with a large balloon payment you take the less an over 5yrs which gives you similar monthly payments then you have the choice to keep it or sell it whenever you want. After 3yrs you could sell it and settle the loan (same as a PCP but much cheaper 99% of the time) or keep it. It gives greater freedom as well as more money in your pocket.

You need to get a list of his requirements before shopping though.

How many miles roughly will it do?

Will it be mostly local stop/start driving or will there be plenty of distance use?

How much space does he need?

Is image important?

Check insurance costs by getting a few quotes. There’s no point in looking at cars only to find out the cover is prohibitive.

How much can he afford to spend? Look up loan calculators at any banks websites to see what the payments would be. Interest rates are lowest of you borrow £7,500 or more so it can work out cheaper to pay more oddly enough.