Buying a brand new car. Your thoughts

I work for Jaguar Land Rover and we get discounts on fords if we rent monthly about 50% of the car park is fords and theres at least 1,000 people in the car park so you can see its quite popular. The only difference is we can trade our cars for new ones every 9 months I've had a friend go from a 1.0 fiesta to the fiesta ST to the Focus ST and like you said this is because he got bored of the cars quickly and wanted a change. Quite a lot of my friends said they aren't going to sign up again but this is because say they pay £200 a month when they come to trade the car back if the dealer values the car at less than what they predicted the value to be (i.e they valued it would be worth £13,000 in three years time and when they come to value it in 3 years time they value it at £12,000 they try and sting you with paying some of the difference) this is just something to look out for when buying one my friend said instead his going to take out a bank loan and buy 13/14 plate car next and pay that monthly for 3 years instead the payments come out at around the same cost yet you still get to keep the car at the end


that was very long but hope it helped you a bit

2004rickyh said:

right in what I'm thinking if the value of the car is less than the dealer said at the time it's down to them and I can just hand the keys back and walk away (subject to the car is in good condition obviously and mileage) is this correct?

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Correct. And if it's valued at more than the GFV (guaranteed future value) you can use this as a deposit towards the next car

I wish some day i have money for decent new car.
Here in Finland we have to pay car price + ridiculous tax before we can register car. For example, 20.000£ car, 7000-10000£ tax added depends how much co2 emissions.
All interesting cars cost a lot..

Having a new car is a great feeling and if you can afford it and don't mind the depreciation hit that you will take then I would say go for it! However, if you do like to change your cars every year then I would be mindful that in a lot of instances once you have entered into a 3 year PCP deal there is likely to be a hefty cost if you wish you change the car. I am similar to you and have been stung by this a few times when I have got bored and fancied a change or more importantly needed to change. The PCP deal is a means of financing the car and makes the car more affordable as you are really only paying for the depreciation on the car (plus interest) over the term. The deal is worked out so that at the end of your term you have paid off the depreciation within that time (based on mileage etc.). Because new cars depreciate faster at first, you will have a period of negative equity (meaning you owe more than the car is worth). If you want to change the car within this period then you will have to pay the difference between what the car is currently worth and how much you still owe (note that you are borrowing the total amount when you do a PCP, they just split the payment so that you have a lump sum at the end). A good example of this was on the Clio 197 I bought new - I got this on a 4 year PCP deal for £16,500 (yes, I know - I overpaid!), 12 months later my circumstances changed and I needed to get rid of the car. The market value wasn't great and I could only get £10,000 for it, at that point I still owed £14,000 against the total finance (deposit and 12 months of payments taken of the total) therefore I had to pay the £4000 difference.

You are paying the depreciation however you finance a car, but just worth noting that PCP makes it more affordable but can leave you with a period of negative equity.

Hope that was helpful!

What about leasing ?

It's different now with the various financing options that are available, however when I bought a brand new car back in 2002, it was on old-fashioned finance (Ford Credit loan, on a Fiesta Zetec-S). Never, ever again. I was very naive at the time and jumped into it totally unprepared. I got hammered on interest over the years and paid a stupid amount of money in total, to then sell the car for a few thousand, which was all it was worth 4 years later.

It is nice to have a brand new car, however for me personally it just was not worth it financially. I would rather work hard, save and buy a used model that has taken the depreciation hit, pay it off, and/or take a small bank loan to cover the difference.

The newness you seek will only last a few weeks, then it will not be new...and by getting into the monthly payment trap, you will get trapped in it...and suffer if you change before the end of the 3 year term.

You also won't be able to modify it (if that's your thing).

Check out leasing too as I said above , there's some good deals to be had , but you need to compare with the finance options and make the best financial decision. With leasing everything is taken car of (maintenance etc) so less worry , plus no worry about GTV or depreciation. It's worth a look.

Plus leasing will feel like 'less' of a commitment than spending 20k in one shot.

Ive always had ex demo or mangers cars from RENAULT start miles around 3\4 on the clock plus I still have 3.5 years warranty left and saved min 4k too

I work in car sales so get to deal with this day in day out. Theres plenty of finance options available (PCP, Lease, HP, Cash) but what might suit one, won't suit another.

If you think you'll get bored easily, look for a short term lease, or have a PCP as there is an element of flexibility, but be prepared to have to put money in to change, or pay more a month due to negative equity. I wouldn't advise putting down a massive deposit on a PCP deal, put something affordable in, even though it is tempting to chase the elusive lower monthly figure. If you do put a big deposit in, be prepared to pay the same next time around if you look at changing.

If you have got a substantial deposit, look at Hire Purchase, or even a Bank Loan to buy the car outright, yes you will still make a monthly payment in theory even paying the car cash if you take into account depreciation if you change in X amount of years time.

2004rickyh said:

Well I've decided against getting a new car. Thanks for all the input/knowledge/advise guys. The majority of people on here and elsewhere seem to be against it, been looking at used late hot hatches between 2 to 3 years old and I can pick them up around £10k to £12k with little mileage. So going to save hard and buy outright. The sensible option for me because I know I'll be bored after a year lol

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Good to hear you've made your decision. It seem like the best choice for you if you're keen on changing regularly.

Plus, I personally think that we appreciate something more if we've had to work hard and save for it. You see a lot of brand new cars in a bit of a crappy state - probably because they're so easily got on finance and as such people don't appreciate them and therefore look after them as well.

Not to pigeon-hole every owner of new cars, but you know what I mean