I keep reading that people are going to leave the scheme when their lease ends,and buy a used car of maybe 3 years old. How do you finance such a purchase ? PCP ? HP ? Deposit needed ? Servicing/breakdown/insurance all need accounting for. All for £250 ish per month.
It all really depends on one’s circumstances – mainly the financial circumstances.
When I left the scheme last year, I was in the fortunate position of having enough in the bank to be able to purchase a new vehicle outright as well as insure it and easily cover running costs. I appreciate not all people are in the same position.
If looking to finance a vehicle – one has to choose whether to go down the leasing/PCP or purchase route. There are swings and roundabout to both.
For leasing/PCP (mainly new vehicles) check out the leasing costs on the manufacturer’s own websites as well as independent leasing companies (for example Lex etc). They generally have an on-line ‘slider’ which changes the repayment amounts depending on the deposit you can afford and the period you wish to lease for. Also be wary of mileage limits which can often be set quite low.
For purchasing (new or used vehicles), check out the cost of loans from your bank as well as other high street banks and HP/Finance companies. Also see if the car dealer has any finance offers (but beware that car dealers often make more for selling the finance rather than selling the vehicle itself so their finance offers may not be impartial or cheapest).
Obviously, all borrowing will be subject to credit reference checks as well as affordability checks – Banks and finance companies can get into serious trouble for lending to people who cannot realistically afford to pay back the loan or instalments. One of Motability’s strong points being there are no credit or affordability checks as the payments to them are guaranteed.
If going outside the scheme then yes you also have to factor in running costs, fuel etc on top of any finance.
To be quite honest you may not get much for £250 per month (without a sizable deposit) outside of Motability – particularly in the current financial climate, with new and particularly used vehicle prices very high at the moment.