If you don’t have the means to fund a deposit, there are plenty of manufacturers willing to help get you into a new car. Audi, for example, is currently offering a deposit allowance of £3750 when you buy a new TT coupé worth £27,700 at list price, which means that to get your hands on our top choice, the 2.0 TFSI 211 Sport, you’ll need to find only £304 to kick off the deal. Then there are 35 monthly payments of £471, before a chunky £9695 final payment.
Compare that with monthly payments of £688 to buy a used model on a typical 6.4% APR personal loan, plus all the sundry MoT, VED and warranty costs you’ll need to front up during E that time, plus a car that’s worth two grand less at the end of the loan, and the costs stack up in support of the new car, with a total saving of £1120.
If it’s sporty you’re after, the Mazda MX-5 1.8i SE is a tempting buy, especially given that you don’t need a deposit at all to enjoy Mazda’s 42-month 0% APR PCP deal, thanks to a generous deposit contribution of £2000. All in, the cost of buying the car this way is just £16,132, compared with £17,073 if you were to buy with cash at the Target Price.
Meanwhile, a one-year-old model will set you back £15,100 on a 7.5% personal loan over the same period, but you’ll also need to pay out for an extra 12 months’ MoT, warranty and road tax, while the newer car will be worth £1250 more at the end of the loan period. All in, you’re looking at a saving £787 by treating yourself to the new MX-5.
PCP finance is becoming one of the most popular ways to finance a car, and given the plethora of attractive deals on offer right now, it’s not hard to see why. However, PCP isn’t for everyone, particularly those who want to own the car at the end of the loan but aren’t sure they’ll be able to afford the final balloon payment.
Enter the Citroën C4 Picasso 1.6 e-HDi 115 Exclusive, currently available on a four-year 0% hire purchase contract that costs £345 a month after a deposit of £4134. Add to that three years’ road tax, one MoT test and a year’s extended warranty, and the total amount payable over 48 months becomes £21,324. Sell the car for its typical retained value of £8475 after four years, and you’ll have paid out £12,850. Do the sums for a one-year-old version priced at £17,295 and funded with a typical 6.4% APR personal loan, and you’ll be £586 worse off.
Similarly, the Honda CR-V 2.2 i-DTEC SE is now being offered on a three-year 0% HP deal that includes servicing, roadside assistance and warranty. After three years the CR-V is expected to be worth £13,050, meaning it will have cost you £11,532 to own over that period. A used version will end up costing you £1710 more because of the extra cost of credit, depreciation, servicing and warranty.
Our research shows that whatever your budget, a brand new car needn’t be out of reach. If you’re prepared to do your research, crunch the numbers and consider alternative ways of paying,
you could even be better off than if you’d paid cash outright.