New cars are quite cheap at the moment. Deals are available and finance is affordable. You can get a decent diesel estate or saloon on a personal contract deal and pay £350 a month, and you'll have a shiny new motor on your drive.
As well as being brand new it will smell new, it will have the best tyres, it will have the latest infotainment and, unless it's a Nissan, digital radio and Bluetooth integration. It will return great mpg and it won't cost much to tax. It'll be big enough to fit your family and the dog and it'll be a smooth cruiser on the motorway. And your neighbour will be impressed.
But it will be a compromise. You might think you like your front wheel drive saloon, hatch or estate with it's torquey diesel engine. But, really, honestly wouldn't you rather own a sporty, rear wheel drive coupe or a proper hot hatch, or a classic, or a massive 4x4?
But any of those cost lots, aren't efficient, aren't practical and just won't be sensible for the every day man or woman on an average wage.
But if you dare to think different then you can have any of the above. I do. I own a sensible, practical estate and a classic Porsche and my cars put together are worth less than six months of finance payments on a new car.
The answer is to buy two used cars.
£350 a month equates to £4200 a year on finance payments. But also you have to put down a deposit. On a £30k car the deposit will be in the order of £5,000. Then at the end of the term you pay more if you want to keep the car.
Forgetting the final payment let's assume you don't buy the new car but instead buy two old cars for a total of £5,000.
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For £2,000 you can buy any number of sensible, practical cars to use as daily runners. I looked at that very subject here. You can buy a ten year old Audi A4 Avant, BMW 3-Series, Mercedes C-Class, Subaru Legacy or any number of normal cars that still look and run well.
Buy sensibly and it'll be reliable and economical. And will depreciate at a tiny rate. The road tax will be about £200 a year and the insurance will be cheaper than a new car's.
Now you've got your sensible car sorted you can afford a fun car. You have £3k and can buy whatever the hell you want.
How about an original hot hatch. I looked them here. A Mk1 Golf GTi or Peugeot 205 GTi can be had for under £3k. Choose wisely and it'll be good for ages until it starts to cost much.
If you fancy something sporty then you can get a BMW Z4, Mercedes SLK, Porsche 944, Audi TT, Mazda MX5, BMW 535i or whatever you fancy. You can even buy a Porsche Boxster for £3500. You just need to cut back on the sensible car, or find another £500.
Or maybe you like big, chunky off-roaders. Get a dirt cheap Land Rover Discovery or Defender or a Jeep Cherokee and jack it up and stick bull bars and rock sliders on it.
The world is your oyster.
Again, this second car will cost about £200 a year to tax and you'll need to insure it. My combined insurance on a 1998 BMW 323i SE Touring and 1987 Porsche 924S is £450.
But even with the combined costs of both car's insurance and tax you'll still be way better off than having bought a brand new car because you won't have finance payments
You won't pay any more for fuel, because you can only drive one car at a time. You won't have monthly payments. You won't have an end of term payment to put down. You will have a spare car if one goes wrong. You will have minuscule depreciation.
And you will be able to take your family and the dog to the beach one day then go for a spin in the car you always promised you'd buy yourself the next.
And, let's face it. If you have a Mk1 Golf GTi in your drive, with an Audi A4 1.9TDi Avant round the corner, you will be a far cooler person than if you've got a brand new, but boring, repmobile there.
Do the sums. You will be better off and happier. What have you got to lose?
Article by Matt Hubbard