Thinking of getting an EV

[danlightbulb]

@dlockers i was just considering the loan option again some more. Obviously the loan option (£18-19k over 5 years) would include interest as well. The interest on that loan is around £3k. So the £18k car actually costs me £21k. Obviously that's built into the payments, but if considering residual value, should I be deducting the interest paid from the figures as that is dead money as per the lease as well?

 

[danlightbulb]

You also need to consider you can easily refinance the loan if/when interest rates drop. If you are taking a 5 year loan for £18k then you'll likely be able to save a chunk after year 2 by paying it off with a cheaper rate loan. Still think you are bonkers buying the newer more expensive car when you are so hung up on cost, you could get this one for £9k, and if it died after 2 years buy another for £9k and be in the same position. Or when it doesn't die you'll have a car that has hardly lost you anything, saved you a fortune and you'll have been able to put some money to oneside for something else.

I know what you're saying but the facelift is a much nicer car internally so I think its worth it.

 

[danlightbulb]

That £15K mg5 motormiles dealer doesn't pass the sniff test half a dozen taycan's and viewing by appointment .. peculiar mix of vehicles supposedly on his stock, or selling for a friend.

hadn't realised the mg5 is only 1600Kg impressive ..however has it not had an ncap rating, but my older 3series isn't a 5.

Yeah this is another annoyance with buying off Autotrader. None of the cars around the price point im looking at are anywhere near me, so trapesing round the country again...

 

[danlightbulb]

Yeah Im also not seeing as many £18-19k cars as I thought I was yesterday, a lot seem to be more around the £21-22k mark now. Not sure what's happened.

 

[danlightbulb]

The lease is totally dead money.
The loan at least leaves you with an asset you can sell/use.

yeah completely understand that, but the closer it gets to parity the less it matters.

If Im paying 3k on interest on the loan, and the car value might be lower in 5 years if the EV market has changed and older EVs (these cars are being used as taxi's remember - could be a lot of them hitting the used market), then all things considered I might not be losing out that much compared to the lease.

We've already seen I cant get much lower than £400 a month for my motoring no matter what I run, so the lease is only a bit above that figure. it does completely derisk everything and take away any hassle other than what to do in 4 years time.

Im not disagreeing that youre right in principle, but the lease is very easy and not too far off cost wise.

 

[danlightbulb]

Question on 1 year old cars on 8k miles. Why would someone trade these in? Does it suggest an issue with the car?

 

[danlightbulb]

20 pages and 390 posts. Does Dan have a car yet…?

Its a lot of money, I think Im right to be cautious about it.

I dont have anyone else to discuss these sorts of things with really. I needed to go through a process in my mind to come to the right decision.

 

[danlightbulb]

Just pointing out that Tesla seems to be the least risky choice as he seems to be very risk adverse.

It’s a paradox isn’t it…risk adverse yet ruling out the least risky choice of it all.

I just don't think a 10 year old Tesla is the right choice really, considering everything Ive been discussing.

2.75 year old MG5, £9k, little to no chance of depreciation beyond fuel savings being made, easy to move if it is hated, no big loan around your neck (£6k, £267 per month on a 24 month loan, only £400 interest to pay at 6.5% over the term) and easy to refinance if required, less to insure as lower replacement value, still under warranty. Seems to me like a decision is being made with the heart and not the head, but all the posts are about finances and keeping the costs down, and risk etc. aren't really being considering just written and ignored by the author.

I can definitely see what you are saying and I need to think about it some more. I think the one you've picked for £9k is also at the low end though as well, they are more typically around £12-13k for the pre-facelift model. The size of the loan to buy a £20k car is certainly on my mind and that's one of the reasons Im favouring the lease still. Some reasons are pulling towards lease and some reasons are pulling toward loan.

 

[danlightbulb]

Are you at risk of job loss/change in the next 4 years? That'll end the lease if it's salsac.

Never say never but I don't think so. Ive been there 24 years.

 

[danlightbulb]

I think the point is that Teslas don't depreciate as much as you might think (autotrader or carwow did a video of the top ten depreciated evs and Tesla wasn't in there).

I get you don't want a Tesla but if fear of deprecation is a factor then you're ruling out a big player.

its not the depreciation that is stopping me, its the fact its a 10 year old Tesla. Im meant to be derisking myself, i.e something new and under warranty with no repairs needed.

 

[danlightbulb]

He wasn’t suggesting buying a 10 year old Model S.

He was pointing at a Model S basically saying how reliable they are while suggesting buying a much cheaper and simpler Model 3 which has only been on the market since 2019.

Ah ok.

£19k for a 2020 reg on 50k miles. Insurance quote £1300 a year.

 

[danlightbulb]

I've gone for the lease.

£435 a month net after salary sacrifice, £455 including expected charging costs, compared to running my current old car at £400 per month. 4 year lease. So £55 more and I drive a brand new car, delivered to me, with all insurance maintenance tyres breakdown, road tax etc all included.

I recognise the loan would have been cheaper in the long term as I'd have owned the car. But I would have to have a £20-23k loan for it, over 5 years, which is a substantial loan. And then source the car as the ones locally seemed inflated in price (more like £25-26k instead of £20-23k). I'd own the car and little dings and knocks wouldn't matter so much, but the residual value would be uncertain.

So that's it, decision made and order placed.

Only hope now is its not the 20 week lead time estimated by the lease company. I spoke to them on the phone and they seemed to think it would be quicker, but that could be lies.

Thanks for all the help.

 

[danlightbulb]

£20,880 over 4 years. Less say ~800 a year for insurance and maybe £200/year for servicing, that's ~£16780 for 4 years of motoring.

Currently spend £180-200 a month on fuel so that's nearly £10k over 4 years. Take that off as well and the car is costing me say £7k for 4 years. Take off potential for £1200 a year repair costs (£100 a month) and the switch is nearly break even.

I think its an ok decision. It might not be best value, but compared to what I currently have its a big improvement.

 

[danlightbulb]

Ive shopped around on the charger installations and no-ones really beating Octopus's own installation quote. Im going to get the Zappi as it's got the wifi and integral cable storage.

 

[danlightbulb]

It isn't "bad" but I can't see how your loan maths didn't work out much more favourably. You are paying £4.5k a year to rent a car you have to give back in 4 years?

The loan was more favourable for sure. Probably about a half to two thirds the cost over 5 years if taking account of the residual value.

And that's fine but what it doesn't recognise is the short term uplift in cost (to pay the loan repayments on quite a large loan).

I balanced the best whole life option against the option that wouldn't change my current costs too much and decided to go for the lease option on that basis.

 

[danlightbulb]

So OP, are you going to sell the old car and pop it in a 4 year fixed interest account ready to buy your next car?

I will be lucky to get £2-2.5k for it I think. But yeah, will add the money I get to premium bonds or spend it on the next job in the house which is loft boarding.