How did you fund yours?

[rm0rgan]

Hi everyone - a long time reader of this forum and thought It was about time I posted!!

I've always found peoples advice and thoughts helpful (well, mostly )

Historically I have always saved up and bought my cars in cash, however, I've now started a new job and with it comes a car allowance of £600 a month. Also I just blew my savings on a Discovery for my wife so don't have funds slushing about.

So my question is this...

I'm looking to buy an Exige S2 n/a so am interested in what finance options people have used to fund their pride and joy - I'm looking at finance of about £15k max.

PCP? HP? Credit cards?!

What are the finance deals like at places like Christopher Niel for example?

Cheers all :-)

[NathanE]

I would avoid PCP... it's just a lease car and unless you pay the balloon payment at the end they will take the car back and you'll be left with nothing, despite paying a few hundred quid a month for several years!!

[bogie]

prefer cash myself, close second would be personal loan or HP, with as big a deposit as poss...certainly enough to cover the VAT/margin/trade price eg. so you are not driving around in a car with so much negative equity you could never get out of it (as many people get tempted to do)

actually had my old Elise for 4 years as a company car/on lease for work (with maintenance), then bought it at the end with cash for £8K ...best deal I ever had on a car

[swannynhb]

NathanE said:

I would avoid PCP... it's just a lease car and unless you pay the balloon payment at the end they will take the car back and you'll be left with nothing, despite paying a few hundred quid a month for several years!!

a pcp is only really viable if you buy new, keep it for 3 years and get another new one. that way its just a contract hire agreement but without the hassle of getting hammered for any potential reconditioning at the end of the term.(plus having the option to own the car if you wish) And becuase residuals are strong on the elise/exige theres always some equity left in the car to cover the balloon and go towards your deposit for the new one. finance wise it really depends on your own circumstances as to what would be the best way to fund the car. most dealers will use black horse or similar as their primary lender for a used car, rates arent good for the customer(but great for the salesman lol) your bank may well lend you 15k at 8ish%apr, depends on your history. lotus will currently pcp you a new one at 5.8% apr. do you see yourself keeping the car for any length of time or getting rid in a year or two? like the op i save and buy outright but as i sell new cars for a living understand that at times its not always possible. £15k gets you a honda powered S1 with nitrons etc right??

Edited by swannynhb on Saturday 24th July 16:37

[kambites]

I saved up and paid cash.

[l4n3y1989]

15k for an exige?....yes please!!!!

[l4n3y1989]

15k for an exige?....yes please!!!!

[rm0rgan]

I wish too.....I have about £5-7k already - it's the shortfall I'm looking to 'borrow' :-)

[Grinnders]

Be careful of the so-called low APR rates quoted for the Lotus finance deals; i.e. where there's a final settlement figure. If I remember rightly they are only based against the repayment part and do not include the interest you also pay for the settlement figure. They look attractive but when you compare them to a straight loan they are actually more expensive. Think of them like a mortgage that is part repayment and part interest only where the APR rate is quoted just for one side of the equation.

... but don't let that stop you buying one under the right conditions

[S Works]

A mate of mine worked in the trade for many years for Nissan and Volvo and only recommended buying with cash or a personal loan (as that's where the best rates are generally offered). Without fail he always advised against going with car finance, especially from dealerships, generally because you can mostly find cheaper ways of borrowing elsewhere. As Grinnders notes, read the small print and make sure you know what you're signing up for. The headline rate splashed all over the windows will not necessarily tell you the full story!

[Black Sport 160]

Paying interest on a loan for a depreciating asset is financial madness in my book.

Bought my Elise outright.

My bike was bought with a loan. A 3 year interest free one. Far better to keep it stashed in guaranteed 3 year index linked bonds in the current climate.

A loan could make more sense if you're pretty sure the car will be a non or very low depreciating one, say a nice S1 Exige or possibly a S160 say.

If you are determined to get a loan, check the small print very carefully. Be good to have the facility to make overpayments / part redemption / pay off sum early without being subject to penalties.

[Redlake27]

Black Sport 160 said:

Paying interest on a loan for a depreciating asset is financial madness in my book.

Agree totally. a friend of mine has just calculated that he has spent £20,000 in interest on his last three cars in seven years.....funding a depreciation of £30,000. Madness - but I guess it is what keeps the car industry alive, whilst increasing our nation's debt.


My advice is to buy what you can afford cash. Whether that be a leggy S1 or even a non-Lotus, and put the monthly payments into a savings scheme (maybe a FTSE tracking ISA as shares seem undervalued). In three years time change cars, and start the process again.

[Black Sport 160]

Redlake27 said:

Agree totally. a friend of mine has just calculated that he has spent £20,000 in interest on his last three cars in seven years.....funding a depreciation of £30,000.

That is total and utter loony tunes.

I could keep my future black manual F355 berlinetta on the road for less.

[Black Sport 160]

Redlake27 said:

My advice is to buy what you can afford cash. Whether that be a leggy S1 or even a non-Lotus, and put the monthly payments into a savings scheme (maybe a FTSE tracking ISA as shares seem undervalued). In three years time change cars, and start the process again.

There speaks the voice of sense.

There's loads of really interesting fun driver's cars out there for a few £K's.

I'd LOVE a mint, original 205GTI for example.

[Gooby]

1) Beg
2) steal
3) borrow


4) Lie

[grumpy]

kambites said:

I saved up and paid cash.

And me

[flattotheboards]

grumpy said:

kambites said:

I saved up and paid cash.

And me

And me

[rm0rgan]

I love Gooby's suggestion but think I might save some more and credit card tart the rest (0% balance transfers) and pay it off in lumps sums....

So....by 2056 I should be there!!!

Just kidding....target is new year now unless my numbers come up next week on the lottery

Thanks for the good advice.

[bogie]

Black Sport 160 said:

Redlake27 said:

Agree totally. a friend of mine has just calculated that he has spent £20,000 in interest on his last three cars in seven years.....funding a depreciation of £30,000.

That is total and utter loony tunes.

I could keep my future black manual F355 berlinetta on the road for less.

imagine how much hes had to earn to cover that, if hes a higher rate taxpayer, getting on for £100K

but of course, if its £5K down and £500 a month for 3 years, then give it back, thats ok ...right?

PCP really is the win-win-win situation; you get to drive a better car than what you thought you could "afford", the finance company gets to make even more money out of you, the car industry sells new cars every 3 years, the dealer always has a supply of 3 year old used stock (you couldnt afford to save up for the ballon too)

its a happy merry go around....until the finance dries up ....ask GM

[wendyg]

I sold my children in a 'Buy one, get one free offer'. £20k brilliant!

As expected, the buyers were in contact after 10 days (we'd been hoping for a fortnight), asking us to take them back, and offering another 5K if we would.


Dammit