Used car extended warranty - yes or no?

midlifecrisis

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

Bridgehouse

midlifecrisis said:

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

I disagree. Depends on what we define as cheaper. 

Cheaper per month or over life of ownership - well, actually new can be “cheaper”

Let’s say I buy a new car worth £40k. I do it on PCP and the dealer gives me a £4K discount, and the finance company a £2k contribution. I also part ex a car worth £5k

That gives us £29k to finance. The PCP deal shows a final value of £12k - so we are financing £17k over 3 years. As it’s new, the manufacturers scheme offers an APR of 3% to get me interested.

At the same time, there’s a nearly new on offer for £34k, but no discount is offered and the finance contribution is only £1k. I still have my £5k part ex, and so we have £28k to finance. 

However the final value is only £10k with this one, so I actually have to finance £18k over 3 years, and the APR is 4.9% on Used. Thus, a higher monthly payment on the nearly new compared to new, and actually I’m paying more in real terms over the 3 years. 

midlifecrisis

Bridgehouse said:

midlifecrisis said:

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

I disagree. Depends on what we define as cheaper. 

Cheaper per month or over life of ownership - well, actually new can be “cheaper”

Let’s say I buy a new car worth £40k. I do it on PCP and the dealer gives me a £4K discount, and the finance company a £2k contribution. I also part ex a car worth £5k

That gives us £29k to finance. The PCP deal shows a final value of £12k - so we are financing £17k over 3 years. As it’s new, the manufacturers scheme offers an APR of 3% to get me interested.

At the same time, there’s a nearly new on offer for £34k, but no discount is offered and the finance contribution is only £1k. I still have my £5k part ex, and so we have £28k to finance. 

However the final value is only £10k with this one, so I actually have to finance £18k over 3 years, and the APR is 4.9% on Used. Thus, a higher monthly payment on the nearly new compared to new, and actually I’m paying more in real terms over the 3 years. 

yes but you would have had to pay for your original car to part exchange that for £5k, and after 3 years youve got to start again.

hobbio

midlifecrisis said:

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

Mate, you really think I'm dishonest don't you? All I do is sell cars at a main dealer, which is also a heavily regulated environment. People want to buy them or they wouldn't come to see me. I don't need to dress anything up, and if I lied to a customer I'd be sacked. Any given customer could be a mystery shopper with a concealed camera, and any phone call or email enquiry could also be a mystery shopper. We are FCA regulated. We are scored and monitored by the brand. I, and the vast majority of my colleagues in the trade, are 100% by the book.  

Anyway, I said a cheaper payment. A huge number of people are payment-driven. They want the newest/best/flashiest/most practical/whatever floats their personal boat car for a set amount of money they are prepared to spend every month out of their earnings, with upgrades every few years. 

midlifecrisis

hobbio said:

midlifecrisis said:

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

Mate, you really think I'm dishonest don't you? All I do is sell cars at a main dealer, which is also a heavily regulated environment. People want to buy them or they wouldn't come to see me. I don't need to dress anything up, and if I lied to a customer I'd be sacked. Any given customer could be a mystery shopper with a concealed camera, and any phone call or email enquiry could also be a mystery shopper. We are FCA regulated. We are scored and monitored by the brand. I, and the vast majority of my colleagues in the trade, are 100% by the book.  

Anyway, I said a cheaper payment. A huge number of people are payment-driven. They want the newest/best/flashiest/most practical/whatever floats their personal boat car for a set amount of money they are prepared to spend every month out of their earnings, with upgrades every few years. 

No, I dont think you personally are dishonest. I accept main dealers are more honest than the 2nd hand dealers and the dodgy facebook "bedroom" traders that are proliferating now. I was disputing the fact that buying a new motor is cheaper than a used/nearly new. Sure if the nearly new is not discounted the same of course it can be. The way cars are sold today seems strange to me. Not long ago we were looking at buying a new car and it was like pulling teeth trying to get a complete price.  it was all monthly payments, initial payments, final payments.   I understand this is attractive to many people and allows people to drive a shiny new motor.   
When i was in my mid twenties all my peers were driving old bangers but could afford to buy a house. These days, young people cant affard houses but they all drive brand new cars. 

crunchman

Bridgehouse said:

midlifecrisis said:

hobbio said:

New cars generally have a cheaper payment is what the man said. Residuals are higher on new, and with deposit contributions and promotional rates a new car will be cheaper monthly on PCP against a nearly new, ex-demo or pre-reg example of the same model. PCP also works better with a 2.5 to 3.5 year change cycle. 

Overall it is NOT cheaper, no reason it should be, lets not pretend which is the point, dress it up how you will.

I disagree. Depends on what we define as cheaper. 

Cheaper per month or over life of ownership - well, actually new can be “cheaper”

Let’s say I buy a new car worth £40k. I do it on PCP and the dealer gives me a £4K discount, and the finance company a £2k contribution. I also part ex a car worth £5k

That gives us £29k to finance. The PCP deal shows a final value of £12k - so we are financing £17k over 3 years. As it’s new, the manufacturers scheme offers an APR of 3% to get me interested.

At the same time, there’s a nearly new on offer for £34k, but no discount is offered and the finance contribution is only £1k. I still have my £5k part ex, and so we have £28k to finance. 

However the final value is only £10k with this one, so I actually have to finance £18k over 3 years, and the APR is 4.9% on Used. Thus, a higher monthly payment on the nearly new compared to new, and actually I’m paying more in real terms over the 3 years. 

Most people in the real world won't buy a nearly new car.  Buy them at 3 years old when they are a lot cheaper.  We bought one 3 and half years ago for around 40% of what it would have cost new.  All we have had to do is routine servicing, MOT and some new tyres in that time.  If I'd bought the same model new then the depreciation alone would have been more than we have spent on the car in total.  At this point in time I could probably still get a couple of thousand in trade in as well.

chillidoggy

I think buying a secondhand car is OK, unless it turns out to be unreliable, or requires expensive repairs. Then it can be an albatross.

I chose leasing new, the car has a 3-year manufacturer's warranty, and I don't have to touch the thing, or MOT it. I preferred that peace of mind. Not only that, but I would never have been able to afford it had I bought it new. I really don't give a shit about the kudos of having a new car, it's the reliability issue that drove my decision, and not having to pay for repairs if it breaks.

midlifecrisis

my method at the moment is to buy 10/15 year old + cars.  pay between £300-£1000, with a long MOT. not had reliability issues either. No such thing as expensive repairs as as they eventually fail, just scrap them and start again. also never paid for servicing. For the record, I COULD afford a brand new car if i wanted but im not interested in new cars or losing money very quickly.

ronnyb

midlifecrisis said:

my method at the moment is to buy 10/15 year old + cars.  pay between £300-£1000, with a long MOT. not had reliability issues either. No such thing as expensive repairs as as they eventually fail, just scrap them and start again. also never paid for servicing. For the record, I COULD afford a brand new car if i wanted but im not interested in new cars or losing money very quickly.

That's ok provided you know what you're looking for and know a bit about cars. For someone who didn't could end up with buying heaps.

RaymondLin

I’ve always aim for cars at 3-4 years old, generally cars just had just 1 or 2 owners.  They would normally all have full dealer service history, and any faults would have been dealer repaired under warranty.  Generally the car would have depreciated 50%.  I find this to be the best middle ground for price, reliability, value, kit and modernity.

Be smart, stick £100 of the purchase on the credit card.

midlifecrisis

ronnyb said:

midlifecrisis said:

my method at the moment is to buy 10/15 year old + cars.  pay between £300-£1000, with a long MOT. not had reliability issues either. No such thing as expensive repairs as as they eventually fail, just scrap them and start again. also never paid for servicing. For the record, I COULD afford a brand new car if i wanted but im not interested in new cars or losing money very quickly.

That's ok provided you know what you're looking for and know a bit about cars. For someone who didn't could end up with buying heaps.

i dont have a clue to be honest, but if the car has a long MOT. feels , drives and looks ok, the seller seems genuine not a fly by night dealer in disguise, instincts go a long way here. If theyve had the car a while and looked after it, have the reciepts for work done. do a long test drive with them. Not saying you cant come unstuck but i look at this way. If i buy a car for £500 and after 3 weeks it falls apart.. well its still cheaper than renting a car. But nothing ive bought has lasted less than a year and has usually sailed through the MOT when they come due. I never bother servicing them either. I dont get paranoid that someone might scratch it with a trolley in the supermarket car park.
There are many cars for sale at low price. As its expensive to insure and tax them people just want to get shot of them these days.

ronnyb

midlifecrisis said:

ronnyb said:

midlifecrisis said:

my method at the moment is to buy 10/15 year old + cars.  pay between £300-£1000, with a long MOT. not had reliability issues either. No such thing as expensive repairs as as they eventually fail, just scrap them and start again. also never paid for servicing. For the record, I COULD afford a brand new car if i wanted but im not interested in new cars or losing money very quickly.

That's ok provided you know what you're looking for and know a bit about cars. For someone who didn't could end up with buying heaps.

i dont have a clue to be honest, but if the car has a long MOT. feels , drives and looks ok, the seller seems genuine not a fly by night dealer in disguise, instincts go a long way here. If theyve had the car a while and looked after it, have the reciepts for work done. do a long test drive with them. Not saying you cant come unstuck but i look at this way. If i buy a car for £500 and after 3 weeks it falls apart.. well its still cheaper than renting a car. But nothing ive bought has lasted less than a year and has usually sailed through the MOT when they come due. I never bother servicing them either. I dont get paranoid that someone might scratch it with a trolley in the supermarket car park.
There are many cars for sale at low price. As its expensive to insure and tax them people just want to get shot of them these days.

Agree with all of that, there are bargains to be had when people are fed up with their cars and just want rid. I've messed about with old cars for years and had some cheap motoring. Bought a Peugeot 205 for £300, did a bit of work on it and kept it for 7 years doing nearly 50k. It was simple to work on and not a lot to go wrong. Not sure that's the case now though i think cars are more complex. I can't really be bothered now though and small runabouts are not expensive new. I bought this October last year. It was pre registered in September at a main dealer, list price was over £11 k. Paid £8300 brand new. Probably keep it for years.

thomasross20

I just went for it. Peace of mind, especially given the previous Ecoboost engine failures. 

So far so good. Getting more like 42mpg as opposed to 50mpg+ in the Skoda. 
Nowehere near as powerful so need to be careful when I think I can overtake but can't.
Need more time to say whether it's comfier or not. It's defo quieter. 

goldtop

Glad you got into the car you wanted.

Some people want new, some people look at depreciation and wince. Like me. The 'cost-per-month' thing is a way of changing the way people buy cars to drive new car sales. Clever SMMT!

I did the new-car thing once. Never again. I'm now 4 years and 40,000 miles into an 18yo car that cost me £1650 to buy and where even a peace-of-mind cambelt, water pump and aux belt job at a main dealer was just £501. It's still worth £1650.

fandango

If you buy new with PCP the car is NEVER 'yours' until you pay the final balloon payment at the end of your 3/4/5 years. It's effectively a loan car, and you'll still have to look after it should it get a supermarket knock or something.

However, much of the maintenance won't be warranty. Case in point. I bought a new car once on PCP or whatever it was. One day some b'stard (in a Audi TT) knocked the wing mirror and never stopped to apologise. Goodbye £250. Then in some snow, I slid into a grass bank and very very slightly buckled one aluminium wheel - not visibly noticeable - which then lost pressure on an irregular basis. When I eventually got fed up with the situation, it was goodbye to another £250 for a new wheel. Then I kerbed a different wheel, costing me £65 to repair. Then did it again on the same wheel a few weeks later. Another £65. I was unlucky, partly due to my own carelessness. None of those incidents were warranty issues, but it goes to show that maintaining cars is no financial picnic.

But some good warranty news - a few weeks after buying the car I got the dealer to replace the radio head unit when the display went awol, as well as a badly squeaking/rattling centre armrest.

Alas, when I sold the car privately after about 18-20 months of ownership, I couldn't quite get enough to clear the remaining payment to the finance people.

In the days when warranties and road tax were bargaining chips, always tried taking the longer road tax - e.g 12 months tax, 6 months warranty, instead of 6 tax, 12 warranty. At least road tax was worth something. Not like the bit of paper with a million plus one exclusions.

EricTheWeary

fandango said:

If you buy new with PCP the car is NEVER 'yours' until you pay the final balloon payment at the end of your 3/4/5 years. It's effectively a loan car, and you'll still have to look after it should it get a supermarket knock or something.

However, much of the maintenance won't be warranty. Case in point. I bought a new car once on PCP or whatever it was. One day some b'stard (in a Audi TT) knocked the wing mirror and never stopped to apologise. Goodbye £250. Then in some snow, I slid into a grass bank and very very slightly buckled one aluminium wheel - not visibly noticeable - which then lost pressure on an irregular basis. When I eventually got fed up with the situation, it was goodbye to another £250 for a new wheel. Then I kerbed a different wheel, costing me £65 to repair. Then did it again on the same wheel a few weeks later. Another £65. I was unlucky, partly due to my own carelessness. None of those incidents were warranty issues, but it goes to show that maintaining cars is no financial picnic.

But some good warranty news - a few weeks after buying the car I got the dealer to replace the radio head unit when the display went awol, as well as a badly squeaking/rattling centre armrest.

Alas, when I sold the car privately after about 18-20 months of ownership, I couldn't quite get enough to clear the remaining payment to the finance people.

In the days when warranties and road tax were bargaining chips, always tried taking the longer road tax - e.g 12 months tax, 6 months warranty, instead of 6 tax, 12 warranty. At least road tax was worth something. Not like the bit of paper with a million plus one exclusions.

Our bassist has a car on PCP or similar and it has quite a few very noticeable knocks and scratches. He reckons it’s cheaper just to have the trade in value bought down at the end of the three years than to pay to have everything repaired. No idea if that’s true but in the meantime he gets to drive a two year old car that looks beaten to crap. 

Bridgehouse

Thing is, cars are very much a tool rather than an asset that could be seen to hold value in any way shape or form.

My car buying decisions are based around one simple fact: I do astronomical miles compared to most. Reliability and safety is incredibly important, and the fact is I spend a significant portion of my life in my car. If it was a 20 year old shit heap and I had to spend as much time in it as I do, I’d be depressed. 

As it is, I’ve just changed mine. I’ve gone new for maximum warranty period. I’ve also gone super safe and super comfortable. I just did the maths - I spend over 1000 hours a year in my car. If it wasn’t really comfy and a nice place to be, I’d be crippled and would have gone postal well before now. 

I guess it’s priorities.

Wazmeister

DanR said:

Sometimes I read these threads where everyone spouts of about dealers just ripping people off.

Every thread decends the same way.

Dan, I knew what the replies to this thread would be, before I even read it !

Always the same. 

I would always recommend a GOOD warranty; i.e.) an extended manufacturers.

I worked for many years at various (mainly Peugeot) dealerships; I never knew of any of our staff who would willingly rip anyone off. There are always exceptions, but GOOD dealerships are bound by many checks.

Thomas, at just over £380, the warranty is worth it as most repairs will cost this.

Like all warranties/insurances, they are worthless until you actually need them.

thomasross20

I'm fine with it, it's one less worry and not that much spread over 24 months.

goldtop

Bridgehouse said:

I spend a significant portion of my life in my car. If it was a 20 year old shit heap and I had to spend as much time in it as I do, I’d be depressed.

Not all 20yo cars are shit heaps. Mine's an incredibly over-engineered barge - 18yo LS400. 130,000m, and it's still effortless and easy driving down to the South of France and Italy.