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What Car? - V2

gintonic said:
i keep thinking about car colours - and keep wondering if it is worth the extra to choose a colour over and above standard spec.....which of course is white.....
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When I ordered my last VW California, they’d started to charge £300 extra for flat white because it was about the best colour for it. Standard was flat red which looks awful. Robbing gits.
 
Ginger said:
I just looked at PCP on a BMW 118. 7.9% APR. £4300 deposit and £396 a month for 4 years and a 10k mile contract. Excess miles at 9.45p.

That's £136 a month in interest. At the end of the term customer has paid c. £23k and owns nothing. Including the deposit, that's £480 a month for 10k miles p.a.

Or take a Tesco personal lan of £20k for 4 years at 5.1 %. £377 a month, add your own £2k and take a 70 reg BMW 118 with 12k miles on it and own something at the end.

Of course I accept that some people haven't got the cash to buy a car outright, but it doesn't take 2 mins to see that a PCP just ain't great for your long term finances. Hopping in to a perfectly good used car saves thousands. As if that should be news to anybody. Why am I even bothering to type this?
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This isn't really a criticism of PCP or any lease or HP agreement. It's just pointing out the difference between buying new vs. buying 2nd hand. Any form of leasing is just another way of financing a purchase, same as taking out a loan from the bank. [The latest accounting standards force businesses to treat a leased asset as if they've taken out a loan to buy that asset, recognising that the lease is just debt by another name]

You could do the same as the lease company if you borrowed £30k or so to buy that BMW 118, paid the bank £396 per month to cover interest and repay some of the principal, then sold the car at the end of year 4. Theoretically, if the lease co' has got their sums right, the value of the car should just about give you enough proceeds to repay the outstanding principal.

You could argue that the 7.9% interest rate is higher than you could borrow elsewhere, but it's not outrageous, and this is basically how the lease co' makes a profit.

The economics of leasing are very simple - your monthly payment needs to cover the interest on the new-car purchase price and also the depreciation of the asset over the 3 or 4 years of the lease. On a new car of say £35k both these amounts will be related to that new price. There's nothing inherently wrong with using a lease to fund a car purchase, but inevitably buying or leasing a new £35k car is more expensive than buying or leasing a 2nd hand £20k car.
 
philsparks said:
This isn't really a criticism of PCP or any lease or HP agreement. It's just pointing out the difference between buying new vs. buying 2nd hand. Any form of leasing is just another way of financing a purchase, same as taking out a loan from the bank. [The latest accounting standards force businesses to treat a leased asset as if they've taken out a loan to buy that asset, recognising that the lease is just debt by another name]

You could do the same as the lease company if you borrowed £30k or so to buy that BMW 118, paid the bank £396 per month to cover interest and repay some of the principal, then sold the car at the end of year 4. Theoretically, if the lease co' has got their sums right, the value of the car should just about give you enough proceeds to repay the outstanding principal.

You could argue that the 7.9% interest rate is higher than you could borrow elsewhere, but it's not outrageous, and this is basically how the lease co' makes a profit.

The economics of leasing are very simple - your monthly payment needs to cover the interest on the new-car purchase price and also the depreciation of the asset over the 3 or 4 years of the lease. On a new car of say £35k both these amounts will be related to that new price. There's nothing inherently wrong with using a lease to fund a car purchase, but inevitably buying or leasing a new £35k car is more expensive than buying or leasing a 2nd hand £20k car.
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No sh1t Sherlock. I think you’ve missed the point of the post. Which is about how people choose to spend their money, and how I perceive a pcp to be poor value.
 
Ooof. ‘Open auto loans’. In other words a snowball loan. Sounds terrifying. This is US centric but will be similar here, there’s nothing new under the sun. Time to sit on cash rather than spend more than necessary on motors me thinks. Not a time to be using expensive debt!


 
Ponty said:
Yes, first world indeed. I’d go for SE spec with BMW to give a comfy ride and to avoid big wheels given the state of many roads.
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There are no SE spec cars & they look rubbish;) The 3 series I drove with 18s was a little firmer than my current 5 but it was still pretty good.
 
Woodface said:
There are no SE spec cars & they look rubbish;) The 3 series I drove with 18s was a little firmer than my current 5 but it was still pretty good.
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Well, if you must have the bling! It’s why I like the Elegance spec Merc over an Avantgarde. You just know it’s been owned by a proper gent!
 
Woodface said:
I think it look nice on some cars but not on others. My wife’s golf GTi looks great but saloons less so.
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Mrs BB has a white BMW 128ti, it looks great when it's clean but it doesn't stay clean long. She does 30m each way for work on the motorway, so it's dirty all winter. It does stay cleaner than my black car though. My last 2 cars have been black, it's all I could get, hopefully never again.

Cheers BB
 
Brown Bottle said:
Guy across the road has just got a new 320d estate, the latest shape is really nice, although his is black, the fool, he should have asked me!

Cheers BB
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The latest 3 does look a nice motor. Quite small really when you look at the boot. And the price, my God, absolutely bonkers IMHO.
 
Ginger said:
I just looked at PCP on a BMW 118. 7.9% APR. £4300 deposit and £396 a month for 4 years and a 10k mile contract. Excess miles at 9.45p.

That's £136 a month in interest. At the end of the term customer has paid c. £23k and owns nothing. Including the deposit, that's £480 a month for 10k miles p.a.

Or take a Tesco personal lan of £20k for 4 years at 5.1 %. £377 a month, add your own £2k and take a 70 reg BMW 118 with 12k miles on it and own something at the end.

Of course I accept that some people haven't got the cash to buy a car outright, but it doesn't take 2 mins to see that a PCP just ain't great for your long term finances. Hopping in to a perfectly good used car saves thousands. As if that should be news to anybody. Why am I even bothering to type this?
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Problem is a lot of the people tooling around in flash lease cars would get laughed out of the bank for a £20k loan, which is I think the attraction of leasing for a lot of people - driving something you can't really afford.

Plus they're the same sort of people that at the end of paying back your theoretical 4 year loan would find themselves in a 6 year old car, which amongst their peer group is like having the clap or something.
 
wacko said:
True. But some cars look really good in black.
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I’ll second that
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Ponty said:
The latest 3 does look a nice motor. Quite small really when you look at the boot. And the price, my God, absolutely bonkers IMHO.
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It’s not small, same floor pan as a 5 series. A bit narrower & not as long. How big a car do you need if there are just two of you?
 
Woodface said:
It’s not small, same floor pan as a 5 series. A bit narrower & not as long. How big a car do you need if there are just two of you?
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It’s not great for a labrador or 2. An SUV or 5 is far better. Plus, I’m just not paying the price BMW want for their new cars, not worth it IMHO.
 
wacko said:
True. But some cars look really good in black.
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I have an Audi A4 Estate, it looks the business when it’s just been cleaned. It stays that way for about 3 days if I’m lucky. If there’s salt on the roads it looks like I’m making a poor attempt to camouflage it.

Cheers BB
 
Blimey the traffic lights outside our turning made the London News ! The ULEZ cameras had their cables cut ! There is a God up there !

Regards,

Martin
 
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