Hi all, hope someone can help.

Considering buying a new/used car in the next few months. Fingers crossed I will have some money to spend, up to about £7k. However, would I be best spending this on the car, taking a hit in depreciation etc or taking a personal contract hire and investing the cash (there would be approx another £10k being invested at the same time too.

Thanks for any thoughts!

Depends entirely on your personal values and whether you are any good at regular saving.

Me personally, I would never spend a big chunk of cash on a new car providing I was in a position to make monthly payments. It will depreciate faster than most things in value and in 3 or 5 years I would be asking where's my cash.

The flip side of that is you don't own the car till you have finished paying for it so if the worst should happen you would be left without a car.

The way I would look at it is; How much interest will you pay on the 7 grand over say, 4 years? How much interest can your 7 grand earn over the same period? At the end of the term you are either going to be left with a car worth 'x' and a big load of cash or (if you're crap at saving like me) just a car worth 'x'.

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

Cheers for that, I guess I need to look at how much I can earn from the savings against cost of leasing. Lease is tempting as its a nice new car with seemingly little risk (someone please correct me if wrong!)

I would not use personel contract hire, its aimed more for business users who claim vat back. You are stuck to a set mileage, have to return it in very good condition and don't own anything at the end of the day. If your circumstances change and you need a different car you can't hand it back early without paying in full for the whole contract.

Ask you dealer for a pcp, you pay a deposit then run the car for a few years at a set mileage, there is a baloon payment at the end. When you get to the end of the contract you can hand the car back with nothing to pay as long as you don't go over the set mileage, if you do its uaually 10 per mile. You could also part exchange the car for another, or re finance the baloon at the end. PCP also gives you the option to change the car at any point during the agreement. It has lower monthly payments than hire purchase as you don't finance the full amount, so you could get a nicer car for your money and change it when you want.

Hope that helps

i have hired my last 4 cars and had no problems.

Once aimed at business users its now open for everyone.

Yes you are subject to fixed mileage but i do no more than 12K a year (you may do less) and have never needed to extend it not only that the penalty is only 10p per mile so for an additional 5000 mile its £500

basically your not financing the full value of the vehicle your financing the depreciation + a small margin

you dont pay road tax either

its normally 3 payments down as deposit (this includes month 1 payment) then its 35 or 23 months and then hand it back and get a new one

Moderator - Link removed, in line with MS terms of service.

if you can get over the fact you dont own the car then its the only way to go.

NOTE: Moderator has removed a link which would give you an idea of cost but has probably been interpreted as spam. Reply to this post if you want further information and free will does not contravene any terms of service. I am not affiliated to the car hire business in any way.