I should point out that the A & L figures are based on getting a broker discount, rather than Renault's reduced "list" price.
Also, p/x may be easier with the local dealer.
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Think another bank (Sainsbury's?) do a scheme called "Drive" which is similar to A&L, but you can also trade-in. Wonder what kind of values they give.....?
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Cheapest way to buy a car is cash. Always will be. Look at the total price paid over the term - it's usually frightening.
The keener the sales guy is to sell the finance, the more worried I get.
The other great worry is the final payment, especially if you don't own the car. In 3 years time a letter turns up saying you have to pay up, buy a new car, or say goodbye to the car you thought was yours.
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I have always paid cash, whether the car was new or secondhand.
Paying interest to own a rapidly depreciating asset is like standing under a cold shower ripping up £5 notes.
In the last couple of years I have only bought s/hand - I don't think I will buy new again. Most cars are now pretty reliable and durable, but depreciation is very high. A well driven and properly looked after 1-2 year old car can be as good as new at half the cost.
I can't imagine why a private motorist would buy a new Mondeo, for example - what must they be thinking of when you can get a 6 month old model from a supermarket at 30-40% off?
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I've never understood this buying something while thinking about how much you are going to sell it for?
We bought MrS JAB's 147 brand new because we never have any intention of selling it, of course this may change but who knows *shrug*
To say someone has lost money in depreciation is also a bit of a non statement.
The depreciation is the cost to you for using the vehicle admittedly you probably want to limit the amount of it.
Now before you all jump in and tell me off for wasting money I already know I'm unusual in this respect ;)
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PCP is ok if you know you only want to keep the car for a few years then get another new one at the end of the time. Low rate finance pcp deals might be worth doing even from a cash point of view as you can be earning interest on the money that you didn't put into a car. At some point there is a cut off between buying cash being better long term value and having a good finance deal. If you get the full discount price and can finance the car with 0% then it pays you to go for the finance rather than a cash purchase, whether it is pcp or HP.
teabelly
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Aprilia - only a 0% deal costs nothing in interest. If you use cash you are losing the interest you would get on the money by keeping it in the bank. The interest rate on my car loan is lower than the interest rate on my savings, therefore by borrowing to buy a car it costs me less.
The PCP on our smart is expensive, but it's a convenient way of buying the car and we get a new one every two years.
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Aprilia - only a 0% deal costs nothing in interest. If you use cash you are losing the interest you would get on the money by keeping it in the bank.
That wasn't my point at all.
I still stand by my original post. Apart from a 0% deal, just about every other form of car purchase/lease costs more than buying for cash.
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Thanks for the replies so far, looks as if I will need to look much more deeper. Couple of points I wold say to replies so far
1. I have seen one dealer (Reg Vardy) advertising a deal via Selections which includes a contribution from dealer / Renault of £3500 ie this comes off the list price before any finace gets worked out. On the face of it, they are paying for the initial depreciation!
2. I do not have cash to buy a new car, therefore a finance / loan deal of some sort is the only option available to me.
3. As the dealer pointed out to me, I have bought 5 cars off him, and every one of them was going to "definitely be the one I keep". However, I always trade in between 2 and 3 years later!
I will retrieve the figures from my car and try and post them later, although the comparisons really aren't valid as it was comparing conventional finace on a used car with Selections on a new car.
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Here is an example from an advert today in the paper:
Scenic Dynamique
Cssh Price 15113
Renault UK and dealer contribution £3456
Customer Deposit £199
1 month at £294.01
35 months at £199.01
Total Payable £13091.36 (APR 5.6%)
So, if I went in and offered cash it would cost me £15113. However, if I take it via Selections then overall it will cost me £13091.36? OK, I know you would get a discount from the OTR price but even still, this looks a good deal, does it not?
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So, if I went in and offered cash it would cost me £15113.
I doubt it!
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It might, actually. Of course you would be stupid to do so but, in theory, it might.
Cash buyers would be well advised to note that the Consumer Credit Act requires that all credit agreements be repayable early and that there be no excessive fees for early repayment, so sometimes it can make sense to take out a finance agreement and clear it quickly. (Only rarely though!)
And I agree that all 'offers' should be compared to ongoing broker prices, when they will usually be found wanting.
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David, so does the PCP count as a credit agreement? So, in theory, could I sign up for it, get the contribution from Renault, then a couple of months later get a settlement figure and find the cheapest loan to fund that?
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ukcarbroker.co.uk - 1.6 Dynamique quoted at £12480 against list of £15113. On the road plus 1 years RFL.
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Do these brokers not reduce the trade in dramatically to make up the shortfall?
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As far as a PCP being a credit agreement within the terms of CCA 1974 - yes, almost certainly, but the deposit contribution may form part of the monies advanced and then be 'forgiven' once the loan has reached term, thus not being a penalty as such but providing a strong disincentive to settle early. (That's the theory, I'm not sure how enforceable that would be!) The other thing is that some lenders may assess your total indebtedness in relation to your salary and not simply lend money to repay another loan at as competitive an APR you could otherwise have had.
Brokers may or may not reduce the trade in - or may not take trade ins at all. There is no harm in finding out, however. When my mother's car was traded in at a main dealer, the local dealer's best, hard negotiation price, was £9,250, with a trade in of £1,300 (it doesn't matter what the cars were). Cost to change was £7,950. 20 miles up the road we found another dealer who would do the deal for £8,995 and offered £1,800 for the old car - £800 less to change. £8,995 was actually better than a broker price and the dealers actually retailed our old car.
It's fair to say that they won't give you more than they can sell on for, and will probably still make a few hundred in profit in doing so, but you'd be highly unlikely to find the trade in allowance reduced by £3k.
Is selling privately out of the question? If no trade in is possible, you could always auction the car locally (no comebacks against you, whatsoever, then!) or eBay it to get a slightly better price, pushing the cost to change even lower. What age, spec and mileage is your current car, and how much have you been offered so far?
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Aprilia wrote: 'I still stand by my original post. Apart from a 0% deal, just about every other form of car purchase/lease costs more than buying for cash.'
Usually cash will be for a lower price than a 0% deal. (0% interest will cost money to somebody, somewhere.)
Sometimes this isn't the case. You may find that in Curry's you get a finance deal for a washing machine that works out cheaper than the cash price. This is because they have to sell a certain number of finance deals each month (in order to get the very generous incentives the finance company offer to them) and so if they are sufficiently desperate they will let you have your washing machine on finance more cheaply than for cash. I assume the same will apply to cars.
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Moral being - look at the final total figure. And, usually, make sure there's a cushion behind you.
Don't forget that with Currys you have to add the cost of the extended warranty or the value of the time saying "No, I don't want that. Really. No. No. Please stop asking me. No, I still don't want it. Can I go now please. No. ..."
And they still won't have that one in stock - will a toaster do instead of the washing machine?
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Further to previous discussion on this subject, I have been in to a dealer looking to purchase a Scenic 120dci Dynamique. I was wanting it with the extra options of climate and sunroofs.
I am trading in a 51 reg Scenic Dynamique + 105, 30000 miles on the clock. I have been offered £7000 trade in and I currently have £4500 finance outstanding, therefore "equity" is actually £2500. Parkers price is £7000 and I really don't like the idea of selling it privately.
I am currently paying £210 a month for my loan.
Option 1 with Conventional Finance
Renault to Go car with 6000 miles on the clock. £13800
13800- 2500 = 11300.
48 monthly payments of approx £275 = £13200 paying out, plus the £2500 deposit = £15700 actually leaving my pocket over the 4 years.
Option2 with the dealer's own PCP
"Brand New" car, but pre registered to their hire fleet (10 miles on the clock, so I would technically be 2nd owner)
Car - £16488 - £2500 = £13988
on a PCP with 15000 miles pa
1 payment of £328.19 and 35 payments of £233.19 = £8489.84 plus final payment of £5505 = £13994.84
add in the £2500 deposit paid = £16494.84
I realise in the above I have assumed that a cash sum would be paid for the final payment as oppose to perhaps financing it.
However, I basically have 2 options and the first option is too dear for me as a monthly payment! I normally replace my car every 2 to 3 years. For little more than I paying just now, I could be driving an 04 plate Scenic and have it under warranty for the next 3 years etc etc.
I have always refused to even talk to dealers about PCPs but this deal seems to me to be quite good. At the end of the day, it is the only way that I can financially get my hands on one.
Whats the thoughts of you out there who are not as "emotionally" involved in this deal as I am? I know its possibly dealer talk, but they only have a couple of these cars left.. When test driving the dealers car, it had 1000 miles on the clock and I asked about a price taking that one but it was a full £1200 more than the one I have been offered.
Any feedback?
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Bobby
If possible save yourself money and drop the climate, Does not work very well and is something electrical to go wrong (problem is it might be part of the sunroof pack?) stick with normal aircon if possible.
Take care in the current climate (I mean company A being taken over by company B) that your mileage may increase at some time in the future leaving you with a large "overmileage" charge to pay at end of PCP. Bear in mind that if you hand the car back it needs to be pristine (current "refurb" and overmileage charges avaerage about 600 quid in the industry.)
DCI 120 is a good choice,
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Cheers for that RF.
Re sunroof / climate, as far as I can see they are part of different option packs. However, these are the cars the dealer actually has and is doing the deal on, if you see what I mean.
In view of previous posts, I looked round the new Scenic in the showroom, saw the electric folding mirrors, the electric sunroof, the keyless card thingy and I thought, mmm, potential problems Renault + Electrics don't necessarily go! (allegedly)
Re the mileage aspect, I tend to use my wee Saxo diesel for going to and from work, I have covered 24000 miles in my current Scenic in 28 months which is just over 10000 pa so I feel that the 15000 pa gives me a wee bit lee-way (!) for unforseen journeys.
Re the actual PCP, my current loan is for 4 years, I have about 18 months to go on it and the car will be 3 years old in October. Currently I have about £2500 equity. If I swap to the PCP and pay the same monthly amount then in 3 years time at the end of the deal, anything over £5505 becomes my equity. I would hope that the car at that time may be worth about 7 to 7.5 so realistically I am not losing much but gaining having a brand new car with warranty etc, and of course, a decent engine!
I have tried my best to talk myself out of this deal and I just can't! And, it looks good in Flame Red! :)
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Have you driven one? I mean a good drive?
Compared to Scenic 1 its much quieter, handles tons better, the DCi120 will knock spots of your 105, the 6 speed box is a joy (tho the remote gearchange linkage is a bit "vague" and you dont need monkey arms to reach the handbrake.
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Drove one for about half an hour on Friday, through town and onto motorway. Was up to 87mph as SWMBO was able to tell me from the central digital display.
Engine was chalk and cheese from current 105. Sixth gear was a bit scary at first, didn't want to put it into reverse but salesman advised me reverse was lift and over.
Brakes felt poor though - a lot of brake travel before they worked but that will probably just be something to get used to.
SWMBO liked the idea of the gearstick up high and the steering wheel adjusting for reach as she sometimes struggles to get comfy in current Scenic.
On a spec basis, I would be losing multidisc cd player from my current car, but I think I can live with a single cd, usually only use multiple on long journeys which may only be a couple of times a year.
Car I drove had the central storage box thingy which looks really good with inbuilt armrests etc but the car on offer to me doesnt have it which is a shame. Dealer advises that they do an aftermarket version for about £250 but it doesn't slide which the factory fit one does.
Handbrake? I didn't use it!
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Just been looking at the preview of the new Modus, on the Renault website: www.modus.renault.co.uk
Looks very tasty. Same sort of versatility on a smaller scale, but much more cutesy than the likes of the Vauxhall Meriva or Fiat Idea.
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Re cd player, as long as it uses the "tuner list" radio plenty of cd changers available on ebay average about 120 quid.
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Oh and meant to say, had my first ever experience of "red lining".
Was accelerating in 2nd I think, it was pulling great, wasn't looking at the revs as it was away in the far side of the dashboard, engine wasn't in any way noisy or anything, and then it just stopped pulling! I realised then that I had to change up a gear!
It was just so enjoyable driving a car that pulled like that with minimal noise.
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Just want to say, (again)! When I bought a new Master van Renault uk lent me 80% of the money interest free for 3 years and that was after a HUGE discout. I kid you not. The deals vary, but worth a look IMHO. Bristol Street Motors in Exeter were 2k cheaper than the main agent in North Devon! Good luck.
Regards.
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Not going to be popular here, but I am regularly amazed at the credit culture in this country
You're looking to replace a car that you've only had for 6 months (or is 6 months old, cant quite make out which) with a brand new one that you admit you can't afford?
My personal opinion has always been to buy cars outright with cash you've saved. Sod lining some banks money with interest just to drive around in a new car
Some great deals to be had for cash in the 2nd hand market
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Nick, have had my current car for 2 years. Not sure where the 6 months bit is coming from.
However, I agree with you that in an ideal world there would not be credit and we would all live in council houses!
But I have a mortgage and can only afford the car I would like if I can take it on some sort of loan.
Yes I could work for a year, spend nothing and then be able to pay cash for it. But life would be boring!
As long as I can afford the particular finance deal, the same as I can afford the mortgage, then I don't feel there is an issue.
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mate people with brains on a pcp will trade there car in for a new one after 3 years, no mot, no problems which won't be fixed under warrenty. now unless your blind, there is a big section on the finace documents which state the final payment, the dealer will also give you your options at the end of 3 years, you have never bought a new car have you? it is not cheaper to pay cash as you stated, the dealer will not offer you an discount as there is no reason, most dealers will find it hard to accept cash, as anything accepted over £2000 in cash is money laundering. pcp are really good, maybe you should try it and find out, most people don't realise they can own a much more expensive car then first thought.
example
pirce of my megane II new £13900+options=15000
price of car less £2000 deposit 11200 total payeable 12000 4.2%apr. do the maths mate and tell me cash is cheaper
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"most people don't realise they can own a much more expensive car then first thought."
Thats just it though isnt it, you dont OWN it. The bank owns it, and you have an expensive, perpetual lease of a nice new car
Fine for some I suppose, I just think there some lovely cars you can OWN for 6-8 grand cash
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if you get caught speeding where does the ticket go???? The bank no. Who is the car regestered too? If it gets stolen who loses it? Who insures it? use your brain, who pays for it.
whats your point, why own one car when you can change every 2-3 years, the point is you don't get the hassle you don't get the problems, and it sounds like you got sour grapes. oh yeah, you best start saving for your 5 year old focus. and who owns that? see you at the garage!!!!!!!!!!!!!!!!!!! loan anyone?
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Haha, chill mate
I can assure you I dont have sour grapes, I make a nice enough living thanks very much
My personal experience is that I havent had that many expensive mechanical problems going this route, certainly none that would come out at £200 a month
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Can someone please explain how the 50% threshold business of the Consumer Credit Act.
If I borrow £10,000 for buy a car for £15,000, at what point of outstanding debt can I simply walk away?
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Espada III - well if you have a family and need a Lamborghini, what else do you drive?
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Espada - Firstly, this only applies to credit agreements and not personal loans, cash advances on credit cards, etc.
You can walk away when you have paid 50% of the total credit price, which includes the interest. So, in your example, if there is £1,500 of interest involved over a three year finance deal, then the TCP is £16,500. Your monthly payments are £319.44. The deposit is taken into account in calculating your payment towards the TCP. Therefore, you will hit 50% of the TCP after 10 and a bit payments. However, if your £15k car is worth less than £8,250 after ten months, I would suggest that you probably should have bought something else; the provision really doesn't provide that much protection.
TheBox - cash is cheaper; it gives you more flexibility as to the source of the car and you're not paying interest. Cash for an old, unreliable and overpriced car may not be cheaper than a PCP - but cash for a reliable, competitively priced car (from a broker, auction, recently deceased neighbour, etc.) will always be.
Your PCP quote seems very competitive - I assume it means there is a £2k deposit allowance from the manufacturer and if you are getting a £2k discount on top of that then yes, in this case (exceptionally - as it is a way of shifting metal, rather than making extra money on a finance deal) then it's very competitive. Most PCPs aren't nearly as benign.
Bobby - if you have £2,500 of equity in your car, then if you go down the www.motorprovider.co.uk route you have £10,750 to fund. www.smartermotoring.com comes up with £216.32 over three years with the Car Purchase Plan and £325.99 as a straight up personal loan with no balloon. The dealer PCP deal isn't too bad though, all things cosidered.
Don't forget that in three years' time with A&L you'll have £4,300 to find to pay off the loan instead of £5,500, plus you'd have saved an extra tenner a month in the meantime. The total saving is therefore nearly £1,700. In that case, it might be worth talking to the broker about trade in.
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