One year fades as another beckons, so it is timely that you nail three things that can affect your bottom-line costs in motoring for 2023.
1. Repayment plans
If you are thinking of buying a new car next year have you fully checked out how you will most profitably go about financing it? You might think you have but there are all sorts of packages out there and, as you would expect, they vary in cost in real terms.
So many are based on PCPs (personal contract plans) and really they are so flexible that there is one for everyone in the audience. So check.
Crucially here, you need to assess the bottom line. That’s because the PCP repayments schedule can be adjusted in such a way that what you owe can be pushed back and make the lump sum or balloon payment that bit larger.
The risk is that you try to stretch too far to get a certain car which can mean the day of reckoning is put further back. There is no such thing as a free lunch in finance and what you don’t pay for today you do so tomorrow.
Don’t get me wrong, I think PCPs are great and have enabled a lot of people to avail of the many benefits of driving a new car.
It’s just that you need to be aware in these days of rising costs – especially of cars in this instance – that you could afford the repayments under less favourable conditions.
If you have any doubts, lower your expectations. Better to bite the bullet now.
With a PCP, you don’t own the car until you pay off the outstanding lump sum.
So maybe try a bank or credit union for a term
loan that makes the car yours and you can keep it for as long as you like, if you are
2. Vehicle type
Of course, before you get to all that you may have to make a tough decision on what is going to power your new car: petrol, diesel, battery electric vehicle, plug-in hybrid or conventional hybrid?
All I’d say is that you have to make sure, even with the growing pressure to go electric, that it doesn’t curtail your everyday needs.
That’s why I tell so many people that they may need to opt for a hybrid or plug-in as a stepping stone because they have a petrol engine in combination with a battery pack that means longer range.
It just is not feasible for some people to go fully electric as of now. You can charge at home, if lucky, but we are not well-enough endowed with fast public charging points. And the price of charging is going up again.
BEVs do cost more than “ordinary” cars – though
their running expenses are lower; for now anyway.
But if they don’t suit you don’t buy. Wait until there are more charge points and fewer expensive new BEV models on the market. It is only a matter of time.
3. Trading in
If you are buying secondhand… prices are racing ahead, which means you’ll get more for yours but have to pay more for your new purchase.
My advice would normally be a cautious wait-and-see, but every year that passes is widening the gap between old and newer.
By all means hold on to your car if it is in good mechanical order, but there is always the risk of something big going wrong that incurs a heavy outlay.
If you are buying newer, for goodness sake get it checked and get its history record.
If, for example, there are repayments outstanding, you could lose the car.