Car 1 - N reg Micra - Parker's guide price = £300
Car 2 - 52 Reg 330D with 140K - Glass guide price £3600
Finances willing, my wife and I want to be able to take advantage of the lower interest rate/lower car prices by extending our mortgage by about £15K (it's up for renewal).
We both feel that we need updated cars (my wife is getting to the stage where she's spending more on servicing/tax/fuel each year than the car's worth).
I'm thinking of moving to a 5 series (probably a 530D) and my wife to a Focus (or similar).
The question is, what are the best options for part exchanging? Do we look for minimum part exchange deals for my wife's car (do they even offer those deals these days?)
Obviously, my wife's Micra has reached the end of it's useable life, so if there's any incentive or cost effective way of trading it in, it would be helpful to know.
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...by extending our mortgage by about £15K...
Is that wise for a car/cars?
If you mean borrow £15k over a few years against the house, that's not so bad.
But putting this sum on the full term of a mortgage will cost you a fortune - interest rates will not always be this low.
In 10 years' time, you really don't want to be still paying for two cars that by then will be long gone.
Please excuse the intrusion into your finances, but you did mention it - in the first sentence of your post.
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Point taken. We'll be discussing this with our financial advisor, we'll need to discuss with him the impact on the repayments/interest charges.
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I know there are arguments for and against but I firmly stick to the rule of never borrowing money against something which is guaranteed to depreciate. Far better, in my view anyway, to start saving now with a view to replacing the most urgently needed one when possible with whatever cash you have available at the time.
The Micra can't depeciate more than £300. If you get another year out of it even if it does need a bit of fettling that's pretty cheap motoring !
I have a "rainy day" / "don't touch" savings account which I drip feed constantly. Not huge amounts but a monthly transfer goes in without fail. I just ignore it for two or three years and am always pleasantly surprised when I come to look.
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Agree - the Micra, if reliable, and suitable for the task, is the cheapest motoring you'll get. Not that cheap is always best, but ask yourself what you'd do with the money you'd spend (and lose in depreciation and interest) on the Focus.
You may well find that you can get a mortgage which allows you to overpay, so you could work out the cost of the cars' loan over four years, and overpay so that you clear the £15k (less their likely resale value, perhaps) in that time, or just put aside a sum each month, and in four years time pay that in to the mortgage account, to achieve the same effect.
Back to the question - you can only ask each dealer what they can do - the Micra might well be better sold in the local paper, in all truth, though it's inconvenient to sort out insurance etc when you've already got the Focus. Ask around at work/gym/club if anyone wants a cheapy - there's often someone who needs one.
Edited by oldnotbold on 09/04/2009 at 12:57
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You never know, but dear old HMG might bring in the "2 grand to trade in your old motor" scheme. It would apply to your Micra, anyway.
screwtape
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But the scrappage scheme would only apply to new cars, and it looks like the OP is going for used.
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Thanks guys. This is all worthwhile considerations that I havent fully gone into. Yes, any mortgage we change to will have to have an overpayment option on it so we will be aiming to pay back the overspend as quickly as we can.
I'm not so sure that the Micra will survive another MOT without significant work (the last one came out with a sheetful of "excessive rust on xxx" warnings. I am more hesitant than usual about sitting in the car in case Ill fall through the floor one day).
I've not looked into the HMG scheme, but I'd be willing to bet that it will only apply to new cars.
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Yes, new and up to one year old, I thought.
screwtape
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Oh dear, it does sound a bit lived in doesn't it ? Well, in that case, I might take to an auction. You might get lucky and if you don't it's no great loss.
Good hunting !
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