Auditors

[Adamski1546081335 + 791]

G'day;

I wager there's a few people on here that have been in the business of buying a new car at some point. I don't mean new to them, I mean off the factory floor. I'm considering both options at the moment, but I keep being told that "buying a new car is a waste of money" and "you'll get a much better deal for used."

To help me decide, would you share your opinions/experiences?

Ta,

Adam

[Administrative Account 7]

Personally i would buy a pre-registered car rather than brand new, as you can avoid that huge depreciation hit when you drive away from the forecourt!

[TangoDown 0]

There are advantaged to buying second hand, such as no balloon payment at the end, no hire purchase, a lot of the "new car problems" have been fixed. Disadvantages are, it being old and reliability comes into question, if previous owners thrashed it around, questionable service and repair history etc...

Advantages to having a new car, it's yours, you know you're probably going to look after it, it may come with a service deal, and the new car smell Disadvantages are, you may need car finance with a huge lump sum payment at the end, you could be lumbered with the car till you've paid it off etc...

I rarely go for used cars as I prefer new, but when I do decide to go for a used car, I normally go to a dealer such as BMW as their used cars usually have a good history. Plus, the deals you get with new cars are quite good at the moment.

[Burnie 2,084]

PCP financing deals are beginning to become a more popular way to drive brand new, or nearly new cars.

With these deals they bind you for 3 years. The car company agrees a "Guaranteed Vehicle Price" based on a variety of factors similar to insurance calculations. They then work out the difference between the new price and the GVP and THAT is what you pay in the form of a deposit + regular installments.

At the end of the three years you either return the car and end the deal (in some dealerships, if the returning car valuation is more than the GVP then they will give you back the difference), return the car and get another new car of the same model on the same agreement (without paying another deposit) or buy the car either outright or on finance.

PCP finance is one of the reasons why second hand car warehouses have so many 3 year old cars in stock.

For example. A colleague at the police station got a brand new Honda Civic Type R. He dropped a 3K deposit and pays just less than 150 per month.

However, a major pitfall to PCP is that you dont legally own the vehicle. So if you crash it and write it off then you owe the full cost of the new vehicle minus what you've already paid.

Edited February 21, 2013 by Burnie

[JamesJG + 175]

I'm using PCP finance.

In 2009 I traded in my 53 plate MG ZR, at a trade in value of £1,900 for a 59 plate Seat Ibiza 1.6 TDi which was valued at £13,000 (hooray for 15% VAT!)

I paid £203 for 36 months so had just shy of £5,000 to pay (once you include interest), and the car was worth a trade in value of £7,500 - realistically £2,500 once you subtract the remaining payment.

I now have a 62 plate Seat Ibiza 2.0 TDi which had the original value of £18,000, but with deals it went down to £15,500 (-£2,500 for trade in = £13,000), and I'm paying £260 for 36 months, so with interest factored in, the remaining payment will be around £4,500 - £5,000, but the trade in value should be higher as I don't plan on scuffing the alloys with this one.

Also you can get good deals on PCP like free servicing through the dealership (often £200-something). No MOT costs also very nice.

You do of course at the end of the three years have the choice of paying the remaining balance and keeping the car, returning the car or continuing the agreement like I did.

And there's no reason to stay with the same dealership or even manufacturing group (Volkswagen Automotive Group in my case) if you don't want. I could quite easily go get a Mitsubishi for example when this deal is up.

Edited February 21, 2013 by JamesJG

[Administrative Account 7]

G'day;

I wager there's a few people on here that have been in the business of buying a new car at some point. I don't mean new to them, I mean off the factory floor. I'm considering both options at the moment, but I keep being told that "buying a new car is a waste of money" and "you'll get a much better deal for used."

To help me decide, would you share your opinions/experiences?

Ta,

Adam

It's true that you'll lose more money if you buy a new car... However, by buying new you get access to more offers and better finance deals (if that's what you're after) and you also get to choose the exact spec you want... By buying used you save a lot of money potentially, but you do lose those other benefits. It's a trade off really as to what you're looking for. I bought a nearly 3 year old BMW with a huge spec for 14k a couple of years ago - the same would have cost me over 32k in total direct from beemer (though they did offer an exceptionally good finance package for it and free servicing...)- I own mine outright, where I'd still be 15 grand in the hole if I'd gone with the new one and mine has lost about 4 grand from it's value but the new one would have lost quite a lot more than that...

I've had 3 new cars and 2 used cars. I care more for the new cars - they're more 'mine' if that makes sense and I take better care of them. I dont know what I'll do for my next one!

[BlockMan 31]

I had to borrow money off my gran to buy my £400 car, being a student sucks!

[Reado + 270]

I have just recently got a used car from a honda dealership, so recent it has hardly been 6 hours since they took my money and its sat on my drive!

I prefer used in someways,

1. its cheaper then new
2. from a dealership most of them come checked and triple checked
3. fine you cannot ask for upgrades to the car but they are willing to get rid of used cars quick so will do most things you ask for (I noticed a scratch on my test drive so they repainted the whole car, also I am going back to get the parking sensors looked at)

However you do not get the chance to own a brand new car, but then I didn't have 17k to blow

[AlphaDelta17 639]

Bought my first car brand new. A VW polo. It was a great deal and I personally much prefer the security in buying a new car as opposed to a used car. As it is, my brother has just bought his second brand new car.

New cars give you that pride of ownership that a used car may not. Yes they are more expensive but actually pretty easy to manage. When I come to upgrading (which I will) mine will still be worth quite a bit (5k ish) as part exchange.

I think I'll always buy new now unless I buy a second 'project' car or fancy something real expensive I just can't afford new!

[oddbod 393]

I would never buy new unless someone else was paying.

My last car cost £139.

[Guest]

I would never buy new unless someone else was paying.

My last car cost £139.

It wasn't an 09 reg ex-police Astra was it? I think that's roughly what they're worth when we're done with them!

[fruitandveg + 26]

The real sticking point is what you can afford to spend and how far into the future you can accurately project your current financial situation to last. In any case, monthly payments for your car should according to various sources be no more than 20% of your income. Also, you'll want a good deposit as well, as the best deals usually need larger deposits.

Beyond that, it depends on how much you value being the first owner of a car really. I think the suggestion of nearly new is a good one as all it'll have done is some demonstrator miles, have a fairly ok spec and as it's been owned by the dealer any early problems should've been ironed out (and it's less likely to be a duff car - never goes down well if the demonstrator has problems) and you can get a big bargain for what is almost brand new. Downside is you can't state what you do/don't want - however some stuff (like cruise control) can sometimes be added by a dealer in their workshop and that you're often restricted to hire purchase agreements rather than PCP (although that is changing slowly).

[SierraLimaSierra 313]

I hate buying second hand cars but I can't afford a new one. The biggest advantage to a new car is the warranty, if it breaks they fix it - brilliant. Second hand cars just eat money.

[TangoDown 0]

.

However, a major pitfall to PCP is that you dont legally own the vehicle. So if you crash it and write it off then you owe the full cost of the new vehicle minus what you've already paid.

Moral of the story, if you get a brand new car, make sure you get GAP insurance with it. This will cover any shortfall between insurance payout, and what's left. Some dealerships automatically give you it as well, my new corsa came with Valueguard GAP Insurance. (It doesn't cost that much either!)

Edited February 22, 2013 by TangoDown

[Burnie 2,084]

Indeed, you can even get it on second hand cars bought on finance these days too. For the first 3 years of my current 5 year finance plan I'm covered by GAP insurance.