Pater wants a new car

[ThunderGuts]

So, bit of advice please. My father is looking at getting a new car - he has recently inherited some funds so is in a fortunate position where he can buy what he wants outright if he wants to. However, I feel the fast-changing nature of the car market (e.g. EVs etc.) means buying outright isn't necessarily the best option.

He's set on getting a plug-in hybrid. Most of his journeys are local, so the electric bit would work there, but he doesn't want range limitations as he does (maybe every other month) do long hauls to distant corners of the country. These are the options as I see it;

1) Buy outright. There's sod-all discount available though and while theory a PHEV is a more future-proofed vehicle, my concern is all it takes is a new tech development to render them worthless (e.g. battery tech moving forwards, which it will at some point, extending PHEV range to 100 or more miles, rather than the paltry 40-50 miles you get at most right now).

2) PCP - steeper monthly payments, but gives him the option to retain the car. The other thing is he's convinced the car (Skoda Octavia PHEV) is likely to retain 60-70% value after 4 years due to his low annual mileage. I am a bit unconvinced, but value checkers seem to confirm this. PCP could mean he'd be able to buy the car off them for a sum less than it's actually worth. Overall though, I do think this is more expensive.

3) Contract hire - can get some fairly competitive figures, biggest benefit I think is any market changes are derisked. If the value of the car plummets, it's not his problem. He doesn't have a liability to get rid of in 4 years time - he just hands it back, even if it's worthless. However, the lease companies clearly don't want to lose out either so they'll likely set the contract hire figures to take account of that risk. Indeed, they amount to a bigger chunk of depreciation than he thinks is likely.

So, in summary, I think option 3 is the better approach as it's lowest risk in what is an unsettled car market (used values are strong right now, but that may change, plus the whole technology moving on side of things). Am I missing anything though? Would it actually be better for him to just buy it and chance the used market in 3/4/5 years time and hope he can sell it for similar to what he bought it for? Or is the used market likely to get flooded with PHEVs because they've become "old-hat" and nobody wants them anymore, with values dropping accordingly?

If anyone has a crystal ball, that'd be fab, otherwise any steer/info/comments would be good. Cheers.
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TG.

[UncleFester]

Anything modern and 'lectrickery' should be treated like white goods. I'd not want to own anything that's superceded every 12 months.

OtOH buying a Cobra or 356 rep ..... absolutely.
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2017 Z1000SX

[JackButler]

At this stage I'd be checking what the delivery lead times are . . . .

There's a very good reason why 2nd hand prices have skyrocketed.
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I clean my guns with the tears of the snivelling, left wing scum.

[Easy-X]

Yeah, second-hand from a main dealer you might get a bit cheaper than new but loads are manufacturers are offering warranties as if the car were new.
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Husqvarna Vitpilen 401, Yamaha XSR700, Honda Rebel, Yamaha DT175, Suzuki SV650 (loan) Fazer 600, Keeway Superlight 125, 50cc turd scooter

[ThunderGuts]

The specific model he wants isn't available generally as nearly new. He's also not that bothered about the lead time (I did tell him we're talking probably 6 months).

I think, from my perspective at least, the contract hire route is being reinforced.
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TG.

[Diggs]

Yep, delivery times are killing things at the moment. I've had a new Skoda on order for 6 months now, and every month I get a message to say the date has been pushed back again...
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Now - Speed Triple, old ratty GS550, GSXR750M
Gone (in order of ownership) - Raleigh Runabout, AP50, KH125, GP125, KH250, CBX550, Z400, CB750FII, 250LC, GS550, ZXR750H1, Guzzi Targa, GSX750F, KH250 x2, Bimota SB6R and counting...

[JackButler]

[Polarbear]

I'm of a different view because I absolutly hate not owning the car. Probably wrongly I feel like leasing is like renting a house, money down the drain.

Now I know cars value goes down, unlike houses, but at the end of the day I own my car, however valuless it is. I've bought it, paid for it. I don't have to worry about that scratch on the alloys where where wifey curbed it or that sap stain on the paintwork from where it's sat under a tree.

Just my view on it.
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Triumph Trophy Launch Edition

[ThunderGuts]

[Diggs]

I've leased a few cars over the years, and always found it to be a cost-effective way of running a new motor. If this is what he decides to do, he must factor in the cost of a body-shop to get rid of small scratches before he gives it back. This will cost him £300 unless he is really unlucky with damage. Of course, if he buys a car outright he may do the same before he sells it...

However, even lease deals have shot up recently and bargains don't seem to about like they used to.
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Now - Speed Triple, old ratty GS550, GSXR750M
Gone (in order of ownership) - Raleigh Runabout, AP50, KH125, GP125, KH250, CBX550, Z400, CB750FII, 250LC, GS550, ZXR750H1, Guzzi Targa, GSX750F, KH250 x2, Bimota SB6R and counting...

[Keithy]

Can’t help with buying options, sorry. I’m with PolarBear in that I don’t see the point of new. PCP/lease deals are basically designed to make money for the companies selling the product.

Prior to the corona price surge new cars lost on average 50% in the first three years. So a 30k car is costing you £5k p.a. in depreciation. That’s what a lease wants to take off you. At year 4 that car is £15k and should last another 6 years (average mileage) so that’s only £2.5k a year. More than covers your servicing. Mine’s now at 12 years, so that would take it down to £1,250 p.a.

My only thought would be if you are going to spoff a shed load on a brand new motor then, for me, it would have to be a long term keeper.

[ThunderGuts]

[UncleFester]

The other option is to hire a few. Each time he needs to go somewhere, hire a different one. A grand spent over 2 months to see what he likes or doesn't like might not be bad value.

The barely 40 mile range of most PHEV would put me off. To be ysefuk for local trips I'd like a true 40+ range and that bumps the price.

If it was local buy a second hand VW Up E and something mad fun petrol like a Yaris GR.
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2017 Z1000SX

[Keithy]

..or an EV shed to use and hire something when you need to do long distances?

[ThunderGuts]

[Shaft]

[ThunderGuts]

Thanks for the advice everyone. He's decided eventually to go on a contract hire; it was substantially cheaper than the best PCP deal so the maths did work out.

Shaft; the PHEV thing does work for someone who drives very locally frequently; he'll just plug it in when he gets home. Most of his journeys are less than 5-10 mile round trips, the sort of distance where a combustion engine will barely be warm. He's keen to be as green as possible, but wants a practical family car. I for one will be interested to see how the reality of the thing plays out, but long term reviews suggest they can be effective in such circumstances.
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TG.

[Polarbear]

[A100man]

[Robby]

I've had a couple of hybrids and recently gone for a full EV. PHEV would make sense in this situation. It's just a hybrid with a bigger battery and more powerful motor. Still does all of the energy recovery/self charging stuff of a normal hybrid (or EV).

I doubt there will be much in it financially between a lease and a PCP. People who know a lot more about finance than us have worked out the numbers. At this point it isn't so much about predicting the future market as shaping it - the GFV values are used to define the market, rather than making a bet against it.

Also, while this car would become outdated sooner than a petrol car in 1995, it isn't going to be obsolete overnight. The next big thing in battery tech isn't even agreed on at the lab scale yet, so it's several years away from mass production.

[AlexArcvarden]

It's great that your father is considering a plug-in hybrid! With the evolving car market, the decision can be tricky. PCP might offer flexibility with lower upfront costs, but buying outright has its perks too. Considering his low mileage, PCP could indeed be a viable option.

[SumRit]

Well, your dad's car conundrum sounds like a real head-scratcher. It's wild how fast things change in the car world, especially with EVs shaking up the game.

[MCN]

What's the script on posting pish in a dead thread on here?

Does one just sign up and post some irrelevant shite?
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Disclaimer: The comments above may be predicted text and not necessarily the opinion of MCN.

[SumRit]

Well, your dad's car conundrum sounds like a real head-scratcher. It's wild how fast things change in the car world, especially with EVs shaking up the game.
Option 3 does seem like the safest route, given the unpredictable market. No worries about depreciation or tech becoming outdated overnight. But then again, who knows, right?

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