Workmate is after a car, 4-5k

iaind

iaind

iaind

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A colleague has been talking about replacing his car for a few days so we've been talking about possible replacements.

He's currently got a PCP/lease sort of deal on a Volvo C30 D5 thats costing him £340 per month. He's at a stage where he can hand it back, and he's wanting to move out of home so is looking at buying something relatively cheap.

He wants something relatively comfortable, well equipped and reasonably interesting/different. Fuel economy has to be sensible but low 30s/high 20s wouldn't be an issue. Reliability is fairly important, he can do a lot of work himself (used to do a lot of stuff with 4x4s as a hobby) but obviously doesnt want to have it in bits constantly.

The obvious mondeo suggestion was my first one, which hes going to look at. He's also looked at an IS200 and is talking about saabs. Oddly, were finding more in the 93 camp than 95 locally with the latter.

Any other ideas?
 
I've tried to warn him off diesels at this money, which he seems to be taking on board. Any decent petrols in that range?
 
I suspect he'd be better off keeping the Volvo if he's already half way through? Surely spending £5k on an old Saab then running it, potential repairs etc etc might end up costing him a similar amount anyway. After all, you went the Saab route and had to give it up due to cost?
 
iaind said:
I've tried to warn him off diesels at this money, which he seems to be taking on board. Any decent petrols in that range?
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Yes, but you'll never see 30mpg out of a Volvo petrol.
Keeping the C30 could make sense. Is servicing, etc included in the lease?
 
Completely different personal circumstances and lifestyles though.

He wants to be moving out in the next few months and his single biggest expense ATM is the car payment - it's what he'd be paying in rent! Given he'd have a final payment in a few years should he want to keep it, it seems logical to do what he's doing.

I don't believe its a maintained lease, he mentioned what he was paying in servicing earlier
 
It's also a fixed cost entity on an in-warranty car. It gives him financial stability. He knows that if his car explodes tommorrow, it is somebody elses problem. It enables him to budget absolutely.

It sounds like £5k in cash might be more useful to him at this stage than the £340 a month.
 
also where is the 5k for the car coming from ?

Surely if he's got say 10k saved up, and is planning on blowing half of it on a new car, its going to take him something like 2 years (including the new costs incurred by the cheaper car) to get back to where he is now ?

If he's going to finance the 5k, how much extra a month is that going to save him vs the increased running costs of an older car ??

Need to look carefully at the figures imo, its not a simple case of "saving £340 a month" by getting rid of the car.
 
Appreciate that, but obviously the costs are much higher than a reasonably sound older car. The 5k would come from a small personal loan I believe.

Anyway, its not my decision so I cant really argue his case financially - its not fair for me to try and do so as i don't know the whole story. Forgetting his current car (mentioned it mainly to give context on what sort of thing he likes), what would be good for the budget and criteria?
 
iaind said:
Appreciate that, but obviously the costs are much higher than a reasonably sound older car. The 5k would come from a small personal loan I believe.
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If he's financing the 5k he needs to look carefully at the projected running costs of his choice of older car vs the savings he's making.

One big bill for a blown turbo on a turbodiesel (as an example) would wipe out all is savings for a good 6 months.
 
I don't normally like discussing other people's financial situations.. Oh wait, I totally do!

Anyway, it doesn't make sense. It'll be cheaper in the long run to just keep the C30.
Unless he gets a Mondano.
 
MrLOL said:
also where is the 5k for the car coming from ?

Surely if he's got say 10k saved up, and is planning on blowing half of it on a new car, its going to take him something like 2 years (including the new costs incurred by the cheaper car) to get back to where he is now ?

If he's going to finance the 5k, how much extra a month is that going to save him vs the increased running costs of an older car ??

Need to look carefully at the figures imo, its not a simple case of "saving £340 a month" by getting rid of the car.
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A 5k loan over 3 years would be, what, 150 quid a month? So going from 340 to 150 For the ownership of the car.

Other costs - insurance, repairs and things shouldn't change too much, but even allowing a decent contingency for repairs still gives a decent saving. Assuming insurance, tax, servicing, tyres are the same but he puts 50 quid aside for repairs, he's still 140 quid better off and 50 quid is a hell of a lot for that purpose!
 
mjt said:
I don't normally like discussing other people's financial situations.. Oh wait, I totally do!

Anyway, it doesn't make sense. It'll be cheaper in the long run to just keep the C30.
Unless he gets a Mondano.
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This was the dilemma, he's looked at the Mondeo, accord and avensis - mostly 2.0 petrols. That sort of thing would undoubtedly be cheap to run, but it's whether there was a decent middle ground.

Long run isn't the consideration here - he's moving out early next year and can't afford it with the current car
 
iaind said:
Appreciate that, but obviously the costs are much higher than a reasonably sound older car.
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Obviously? I'm not so sure it is obvious, actually. A £5k Saab might need bits here and there. It's also going to be less economical.

Let's say it'll cost him 50 quid a month more in petrol, and he'll spend a reasonably conservative £50 a month on misc expenses associated with older cars - ie the marginally higher tax, breakdowns here and there. So, thats £100 a month on additional expense over the Volvo.

The 5k would come from a small personal loan I believe.
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He borrows £5k at 10% APR over 2 years and thats £230 a month. Add this to the £100 a month of predicted additional expense and whoa....

..he's spending the same per month that he currently does on his Volvo, which is nearly new.

People seriously underestimate the costs associated with running all but the most simple and boring of older cars.

If he cannot afford to move out with £340 of Volvo per month then I'd suggest he also cannot afford to move out with a £5k Saab funded by a loan, either. Whichever way you spin it, he's hardly going to be any better off at all.

Therefore the obvious answer is to buy a £1k minter of a Mk2 Mondeo.
 
The move out of home also means moving within a few minutes of work - fuel costs will be like mine, negligible.

The loan would be 3 years not 2. Given my TOTAL expense running my 10 year old car (except fuel) is 100 a month, which leaves me with a decent surplus, I don't think the figures are unreasonable.

Anyway im happy to debate the ins and outs of decisions of my own, but this isn't my choice or my situation so i cant debate it properly as I don't know all the facts. So I'd appreciate it if we could stick to the cars as I'm really not in a position to argue his corner (nor am I really interested in doing so, he can make his own choices)
 
iaind said:
The loan would be 3 years not 2. Given my TOTAL expense running my 10 year old car (except fuel) is 100 a month, which leaves me with a decent surplus, I don't think the figures are unreasonable.
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£100 a month for a £1k Honda Accord. Not a £5k bank loan purchased turbocharged Saab.

The figures make no sense at all. If he acheives the same running costs as your Honda - which of course he wont but lets assume he does - added to his bank loan (now over 3 years so £165) he's spending out £265 a month. So moving from a brand new, no hassle, always works car to an older car is going to save him a whole £75 a month. Thats it - £75 a month.

Now if things are SO tight that £75 a month means he cannot afford to move out then perhaps he needs to stay where he is for a bit until his financial situation improves a bit more, or considers a house-share or something.

Anyway im happy to debate the ins and outs of decisions of my own, but this isn't my choice or my situation so i cant debate it properly as I don't know all the facts. So I'd appreciate it if we could stick to the cars as I'm really not in a position to argue his corner (nor am I really interested in doing so, he can make his own choices)
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To be fair this is why 'Spec somebody who you dont know and who doesnt even post here a car' threads are fail.
 
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Ok, let's spin it the other way around.

His motoring expense at the moment is, say 420 per month plus fuel. He wants to reduce that as far as possible to fund a move closer to work which will make fuel costs minimal.

How does he achieve that?
 
something that costs as little as possible. The more collateral he puts in, the more it eats into the savings he makes.

£1000 mondeo mk2 sounds a good shout.
 
MrLOL said:
something that costs as little as possible. The more collateral he puts in, the more it eats into the savings he makes.

£1000 mondeo mk2 sounds a good shout.
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I think the problem he'll have is such a big step down, from a modern highly specced car with decent grunt to an old mondeo. Wonder if a 2k MK2 Mondeo ST might work, at least the performance would offset the other downsides.

He was originally talking about 3k which is nicely in mk3 territory, but it's crept up a bit. Maybe the best thing I can do for him is convince him to bring it back down
 
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