More car advice! (no, really!) 0% deals

joneve

Anyone have any wisdom on 0% deals on new cars? 

We'd previously been looking at getting a Skoda Kodiaq. Lovely car, good spec, even for the lower models (umbrellas in the doors!), but unless we want to buy one out right (which we can), any PCP/finance deals come with horrendous APR%.

It just so happens that VAG have now released a same-sized brother through SEAT in the form of the Tarraco. It looks nicer than the Skoda, ticks every single box in terms of spec (except not having as many DSG box options) and other than that is pretty much exactly the same car. 

SEAT have just started doing 0% finance on the Tarraco if you buy a brand new one. Seems like a no brainer as rather than giving a car dealer ALL of the money we got from the sale of our house, we can simply spread the cost and not pay over the odds in terms of interest....but is it too good to be true? Or is it sometimes a case of them just wanting exposure and sales numbers to be bumped up for the car (I've yet to see one out on the road)? GFV seems *slightly* high at 11k after 4 years (on a 30k car, 12k a year) but that point is moot if we hand the car back and even if we end up keeping the car and buying it outright, we're still only paying the OTR price, rather than any additional interest. 

Any pointers gratefully received. 

celentium

Mine is on a 0% deal. The monthlies are low and it was a good offer with a dealer contribution also included.

However, if you've got the cash to buy new, you have the cash to easily buy a car that's three years old and to pocket /save /invest the difference. That's what I'd do. 

BRISTOL86

Personally I just can’t see any value whatsoever in buying a car brand new when there’s such a glut of nearly new cars at considerably lower prices. 

But if the car you really want is brand new to market then I guess that’s a different story. 

joneve

celentium said:

Mine is on a 0% deal. The monthlies are low and it was a good offer with a dealer contribution also included.

However, if you've got the cash to buy new, you have the cash to easily buy a car that's three years old and to pocket /save /invest the difference. That's what I'd do. 

Indeed, this is something we're looking at..however we want to keep as much money as possible as we are planning on renovating the house. So although we could tie up some money in a new/used/whatever car now as a lump sum, that would still take out a fair chunk (at least half) of what we have for the house. 

Whereas we could stick down a 5k deposit, keep the monthly repayments we have currently (with our current car) and not have (in theory) added cost of potential repair work outside of Manufacturers warranty (plus we get two services included). 

m_c

0% is never zero cost.
A good sales rep should be willing to run various options, and work what the real cost to you would be. Often cash buying outright won't get you the best price, as the dealer/sales reps get a bigger margin from the manufacturer for selling finance than selling outright.

My old boss's last car worked out cheaper on a 3 year PCP deal with max deposit and minimum balloon payment, than 0% or buying outright, but the sales rep priced all the options for him.
My current van worked out cheapest on hire purchase with a decent deposit, than PCP.

celentium

The new car is the most expensive way to do this (turning 30k into 11k), but in the meantime frees up enough cash for your house renovations.

The used car in cash will be far cheaper, but you'll need to build your pot back up from what would have been the monthly payment. 

So basically you're leveraging debt on a new car to subsidise your renovation cost. And it isn't really a 0% loan because of the rapid depreciation of the car.

If the used car idea will not replenish the pot quickly enough, you could look at a loan from a bank. 7k at 3% would still be cheaper than the depreciation on the new car. 

If repair work is a concern, look at cars that either have extended warranties, or have a bullet proof reputation like Toyota.

Hope this helps with some alternative ideas. Wouldn't blame you for the immediate gratification of a new car though. Its a good feeling! 

skunkwerx

I saw a 'used' car on trustford yesterday thats clocked a whopping 10 miles... 

My parents used to get a deal on bank loans at 0%. Pay the car in full then its yours, and pay off the bank loan. When intrerest creeps in, get another bank loan at 0%. 

This was when I was young so no idea if its still a thing

TimmyO

celentium said:

The new car is the most expensive way to do this (turning 30k into 11k), but in the meantime frees up enough cash for your house renovations.

The used car in cash will be far cheaper, but you'll need to build your pot back up from what would have been the monthly payment. 

So basically you're leveraging debt on a new car to subsidise your renovation cost. And it isn't really a 0% loan because of the rapid depreciation of the car.

If the used car idea will not replenish the pot quickly enough, you could look at a loan from a bank. 7k at 3% would still be cheaper than the depreciation on the new car. 

If repair work is a concern, look at cars that either have extended warranties, or have a bullet proof reputation like Toyota.

Hope this helps with some alternative ideas. Wouldn't blame you for the immediate gratification of a new car though. Its a good feeling! 

^ this man gets it 

joneve

Aye. Cheers chaps! lots of good info here as always. 

Trouble with buying used is my wife is insisting on having a big fucking car and has very particular tastes (although not *quite* as particular as Emp ), so still ends up being "expensive" in terms of cash. 

The lure of just treating it as a monthly outgoing (and getting shot of our X trail which has caused us no end of grief and which we're currently in negative equity with - but that's a different story), rather than using up our cash, is certainly tempting, but we've looked at the bank loan route too as getting a loan for a used car would still perhaps work out cheaper than the money we lose as soon as we drive off the forecourt with a new car. 

Gives us something to think about though, and fortunately, for all her faults when it comes to being picky about what she wants in a car, she's pretty nailed on when it comes to our personal finances, so she'll look at every eventuality and scenario above. 

BRISTOL86

skunkwerx said:

I saw a 'used' car on trustford yesterday thats clocked a whopping 10 miles... 

My parents used to get a deal on bank loans at 0%. Pay the car in full then its yours, and pay off the bank loan. When intrerest creeps in, get another bank loan at 0%. 

This was when I was young so no idea if its still a thing

It most definitely is not! 

boogieman

I wouldn’t buy a brand new car either. Our last two cars have been “used”.  A Jag XF with 3.5 k miles, 5 months old, £14k under the list price for a new one. An Audi Q5 with 1600 miles, 7 months old, £5k under list price. You still get the balance of the manufacturer’s warranty, free recovery etc. We got two free services with the Audi too. No point in buying new as far as I’m concerned. Go three years old and you’ll save even more. 

strtdv

"Expensive in terms of cash" is really just the actual expense of the car, you just see it up front. PCP can seem cheap but it really just makes a large cost seem smaller.

As has been said, if you're planning on using the money you defer spending on a renovation, that might be fair enough, but you'd likely be better off with a used car and a bank loan, particularly if you have a good credit rating.

joneve

strtdv said:

"Expensive in terms of cash" is really just the actual expense of the car, you just see it up front. PCP can seem cheap but it really just makes a large cost seem smaller.

As has been said, if you're planning on using the money you defer spending on a renovation, that might be fair enough, but you'd likely be better off with a used car and a bank loan, particularly if you have a good credit rating.

Oh of course, that's what I was getting at  

TimmyO

joneve said:

 but we've looked at the bank loan route too as getting a loan for a used car would still perhaps work out cheaper than the money we lose as soon as we drive off the forecourt with a new car. 

fwiw this is where my head would be at 

joneve

Cheers Tim. 

TTony

I'm reading two different questions - or answers to two different questions.

1.  Buying s/h (assuming that it's c2+ years old/depreciated), however you finance it, is going to be cheaper than buying new, however you finance it.    

2. If you want to buy new, then the 0% offers can be (read the small print) a good way of doing it.  I was reading an article in AutoExpress just yesterday that pointed out the deals (dealer/manufacturer contributions) that are available on these deals now.  Even the low APR% deals can work out cheaper than walking in with a sackful of cash.

But those deals vary by manufacturer and you have to read the small print to assure yourself that you're happy with the t&cs hidden there.

Personally, I've never liked debt, or being committed to monthly payments for x months ahead, so I've always bought outright.  But I also realise that's irrational  from other perspectives!


Also  - check out the deals that are available on sites like CarWow and DriveTheDeal.    New car, to your spec, with some amazing discounts on some models, and potentially the 0% finance deal too.

joneve

TTony said:

I'm reading two different questions - or answers to two different questions.

1.  Buying s/h (assuming that it's c2+ years old/depreciated), however you finance it, is going to be cheaper than buying new, however you finance it.    

2. If you want to buy new, then the 0% offers can be (read the small print) a good way of doing it.  I was reading an article in AutoExpress just yesterday that pointed out the deals (dealer/manufacturer contributions) that are available on these deals now.  Even the low APR% deals can work out cheaper than walking in with a sackful of cash.

But those deals vary by manufacturer and you have to read the small print to assure yourself that you're happy with the t&cs hidden there.

Personally, I've never liked debt, or being committed to monthly payments for x months ahead, so I've always bought outright.  But I also realise that's irrational  from other perspectives!


Also  - check out the deals that are available on sites like CarWow and DriveTheDeal.    New car, to your spec, with some amazing discounts on some models, and potentially the 0% finance deal too.

Cheers Tony. 

We're open to both options to be honest. I'm fortunate enough that my dad works for Listers, so any cars within their group we can get on a relatively decent 4.9% APR "friends and family" rate (as opposed to 10.9%). 

"Why don't you ask him", you're probably asking, well, I do. But at the end of the day, he's still got to make a living, so don't want to put him in an awkward position. He'll always look at quotes we're given and give impartial advice (as much as he can), but always good to get other perspectives too. 

If we didn't need a chunk of cash to renovate the house, we would just buy a car outright, no issues. But the fact we need to keep as much as possible complicates matters slightly. 

Forgot about Carwow too, will bang the numbers into there now. 

Iamnobody

I’ll just leave my usual comment for car threads.

Have you considered leasing?

tony99

joneve said:

Aye. Cheers chaps! lots of good info here as always. 

Trouble with buying used is my wife is insisting on having a big fucking car and has very particular tastes (although not *quite* as particular as Emp ), so still ends up being "expensive" in terms of cash. 

The lure of just treating it as a monthly outgoing (and getting shot of our X trail which has caused us no end of grief and which we're currently in negative equity with - but that's a different story), rather than using up our cash, is certainly tempting, but we've looked at the bank loan route too as getting a loan for a used car would still perhaps work out cheaper than the money we lose as soon as we drive off the forecourt with a new car. 

Gives us something to think about though, and fortunately, for all her faults when it comes to being picky about what she wants in a car, she's pretty nailed on when it comes to our personal finances, so she'll look at every eventuality and scenario above. 

Surprised about the X-trail, thought they were very solid choice. What probs you had with it?

joneve

Iamnobody said:

I’ll just leave my usual comment for car threads.

Have you considered leasing?

What would be the benefit of leasing? 

I'm not particularly precious about owning the car but for the same mileage and similar money down, it's the same monthly re-payment (wish) 

joneve

tony99 said:

joneve said:

Aye. Cheers chaps! lots of good info here as always. 

Trouble with buying used is my wife is insisting on having a big fucking car and has very particular tastes (although not *quite* as particular as Emp ), so still ends up being "expensive" in terms of cash. 

The lure of just treating it as a monthly outgoing (and getting shot of our X trail which has caused us no end of grief and which we're currently in negative equity with - but that's a different story), rather than using up our cash, is certainly tempting, but we've looked at the bank loan route too as getting a loan for a used car would still perhaps work out cheaper than the money we lose as soon as we drive off the forecourt with a new car. 

Gives us something to think about though, and fortunately, for all her faults when it comes to being picky about what she wants in a car, she's pretty nailed on when it comes to our personal finances, so she'll look at every eventuality and scenario above. 

Surprised about the X-trail, thought they were very solid choice. What probs you had with it?

How long do you have?  

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