How do you finance your vehicles?
Discussion
Terminator X said:
How did you even get registered on here? All PH'ers pay for their cars with cash.
TX.
That was quick TX.
I musn't have been asked to complete the financial eligibility check upon registration! Oops! Apologies for upsetting the Hoorah Henries with this line of questioning!
My most recent car is a 2015 Audi A3 e-tron at £11500
£2500 part ex
£2500 savings
£6500 on a 5 year unsecured personal loan at £112 a month.
I plan on having the car about 3 years, then I’ll part-ex it
Edit: I earn £40k a year. My other significant outgoing is my mortgage at £635 a month.
£2500 part ex
£2500 savings
£6500 on a 5 year unsecured personal loan at £112 a month.
I plan on having the car about 3 years, then I’ll part-ex it
Edit: I earn £40k a year. My other significant outgoing is my mortgage at £635 a month.
Edited by georgeyboy12345 on Tuesday 27th July 07:27
Whatever works at the time is my answer. I’ve done PCP, lease, cash, all depends what car I’m buying, how much I want to spend and any deals around at the time.
Secured a scirocco lease 5 years ago for £1,500 down and £160/mth and didn’t cost me a penny over the 2 year term. More recently I wanted to relive my youth and purchased a Mk1 MX5 for cash, run it for a few months and decided at my age I actually do prefer more creature comforts over the ‘feel’ so sold it.
Now looking for something else but stumped as to what to buy - personally I don’t fancy splashing £50k+ on a car as I’m not fussed about a brand new car. For some it’s a must. I actually enjoy the ‘hunt’ of buying and trying to find a bargain. The market at the moment makes that more difficult of course. I have a self-imposed budget of around £250(ish) a month as there can be some lovely used cars available. I constantly flip between being sensible and getting an electric mini or similar on lease and saying feck it - only live once and buying a 15yr old Maserati/Porsche/Aston etc.
Secured a scirocco lease 5 years ago for £1,500 down and £160/mth and didn’t cost me a penny over the 2 year term. More recently I wanted to relive my youth and purchased a Mk1 MX5 for cash, run it for a few months and decided at my age I actually do prefer more creature comforts over the ‘feel’ so sold it.
Now looking for something else but stumped as to what to buy - personally I don’t fancy splashing £50k+ on a car as I’m not fussed about a brand new car. For some it’s a must. I actually enjoy the ‘hunt’ of buying and trying to find a bargain. The market at the moment makes that more difficult of course. I have a self-imposed budget of around £250(ish) a month as there can be some lovely used cars available. I constantly flip between being sensible and getting an electric mini or similar on lease and saying feck it - only live once and buying a 15yr old Maserati/Porsche/Aston etc.
My main car was purchased with a personal loan as that was the best finance option available I.e lowest amount of interest.
Having worked it out it costs me monthly about 1/7th of my basic net pay but I didnt think of it in those terms when I bought it to be honest.
I also own a R53 Mini which is road legal but mainly a track car. I paid cash for that but it was cheap.
Having worked it out it costs me monthly about 1/7th of my basic net pay but I didnt think of it in those terms when I bought it to be honest.
I also own a R53 Mini which is road legal but mainly a track car. I paid cash for that but it was cheap.
Neither of ours are brand new, both 5 year old AUC BMW's.
We live in a village, have a kid and work different times/days so having two cars is essential for us, we easily rack up 9-11k a year in both cars. Both of us work and combined income is about £85k with the Wife doing part time now.
Completely agree on spending £250+ a month on a 100bhp car, its just not for me either.
We had some equity in both previous cars so used that and did a bank loan for the rest over 5 years at 2.9% APR for both. Think it comes to about £550pm but unlike a brand new car, we are not solely paying depreciation. Even in 4-5 years time, both cars will have a decent amount of equity to roll into a new car.
Granted, we don't get the new car smell and take your chances on repairs after the first year but if you are careful with your purchase and look for something which has been looked after, servicing done on time etc then you minimize your risk somewhat.
We both like cars so neither of us would be happy driving a piddly 1.5 218i or equivalent. Each to their own however, I am sure there are people who prefer to buy £5k cars and overpay their mortgage each month so they can retire earlier but for me, life is for living and driving is something I enjoy.
We live in a village, have a kid and work different times/days so having two cars is essential for us, we easily rack up 9-11k a year in both cars. Both of us work and combined income is about £85k with the Wife doing part time now.
Completely agree on spending £250+ a month on a 100bhp car, its just not for me either.
We had some equity in both previous cars so used that and did a bank loan for the rest over 5 years at 2.9% APR for both. Think it comes to about £550pm but unlike a brand new car, we are not solely paying depreciation. Even in 4-5 years time, both cars will have a decent amount of equity to roll into a new car.
Granted, we don't get the new car smell and take your chances on repairs after the first year but if you are careful with your purchase and look for something which has been looked after, servicing done on time etc then you minimize your risk somewhat.
We both like cars so neither of us would be happy driving a piddly 1.5 218i or equivalent. Each to their own however, I am sure there are people who prefer to buy £5k cars and overpay their mortgage each month so they can retire earlier but for me, life is for living and driving is something I enjoy.
Edited by Wagonwheel555 on Tuesday 27th July 08:01
Very much depends on the circumstances and on what I’m buying.
At the moment, all the family’s cars are bought and paid for.
If it were a toy or sports/classic car-definitely cash-I wouldn’t use it enough these days to warrant the drip.
I’d have nothing against buying a new one on PCP or whatever but Even with zero percent deals you’re tied in some way or another.
Take the i3S I bought the wife this year, there were at least four methods of buying one for her at various costs. The simple fact was, even the second cheapest method over four years worked out (at today’s guaranteed future values) to be at least £5.5k more expensive than what I did-which was basically trawl the classifieds until one popped up miles away at the exact spec we wanted and drove a hard bargain on.
Yes ours was a few months old and an ex-demo but to get a brand new one was bordering on £9k more expensive and that wasn’t an S model. Not only is the finance interest expensive over those four years or whatever, you’re tied into whatever they want you to buy at what price.
So it’s horses for courses but cash can be ridiculously cheaper.
One thing I would say is see what your bank will lend you. HSBC always bang on about their 3% rates up to £15k but whenever we’ve looked we miraculously don’t qualify for that rate.
At the moment, all the family’s cars are bought and paid for.
If it were a toy or sports/classic car-definitely cash-I wouldn’t use it enough these days to warrant the drip.
I’d have nothing against buying a new one on PCP or whatever but Even with zero percent deals you’re tied in some way or another.
Take the i3S I bought the wife this year, there were at least four methods of buying one for her at various costs. The simple fact was, even the second cheapest method over four years worked out (at today’s guaranteed future values) to be at least £5.5k more expensive than what I did-which was basically trawl the classifieds until one popped up miles away at the exact spec we wanted and drove a hard bargain on.
Yes ours was a few months old and an ex-demo but to get a brand new one was bordering on £9k more expensive and that wasn’t an S model. Not only is the finance interest expensive over those four years or whatever, you’re tied into whatever they want you to buy at what price.
So it’s horses for courses but cash can be ridiculously cheaper.
One thing I would say is see what your bank will lend you. HSBC always bang on about their 3% rates up to £15k but whenever we’ve looked we miraculously don’t qualify for that rate.
Used or New, a car will depreciate at the same rate regardless of how you paid for it. The only difference is whether you are paying interest on the money you used to purchase it.
Using cash for the purchase is obviously the best option financially as you are not paying interest but if the cash is all your savings, it might not be the smartest move.
Personally, I prefer to have cash in savings for emergencies and using all of it for a car purchase is not wise. What if I lost my job and needed money until I found a new one? Granted, I could sell the car but it still makes more sense not to use all your savings buying a car.
However if you have £100k lying around then sure, £30k on a car is a better move financially than getting a loan or PCP considering even the best fixed savings accounts are going to be less than the lowest APR rate you can get on a loan.
Using cash for the purchase is obviously the best option financially as you are not paying interest but if the cash is all your savings, it might not be the smartest move.
Personally, I prefer to have cash in savings for emergencies and using all of it for a car purchase is not wise. What if I lost my job and needed money until I found a new one? Granted, I could sell the car but it still makes more sense not to use all your savings buying a car.
However if you have £100k lying around then sure, £30k on a car is a better move financially than getting a loan or PCP considering even the best fixed savings accounts are going to be less than the lowest APR rate you can get on a loan.
Jamescrs said:
My main car was purchased with a personal loan as that was the best finance option available I.e lowest amount of interest.
Having worked it out it costs me monthly about 1/7th of my basic net pay but I didnt think of it in those terms when I bought it to be honest.
I also own a R53 Mini which is road legal but mainly a track car. I paid cash for that but it was cheap.
Same model as this.Having worked it out it costs me monthly about 1/7th of my basic net pay but I didnt think of it in those terms when I bought it to be honest.
I also own a R53 Mini which is road legal but mainly a track car. I paid cash for that but it was cheap.
Main car is a 3 series, bought at 2 years old with part ex and personal loan - 2 years is a sweet spot for me as still nearly new but has washed off a ton of depreciation. Loan payment out tracks the depreciation so part ex next time will lead to a smaller loan, rinse and repeat. This is my second cycle and used car prices increasing mean I could shift it for 5k more than is outstanding on my loan.
Toy car is a z4, bought cash as was relatively cheap and won't lose silly money at the price point I bought it for, look at it as a liquid asset.
davek_964 said:
fttm said:
I detest any sort or monthly payments and have it lodged in my brain if the cash isn't in the account I can't afford it , Works for me 
Yep, works for me too. If I can't pay cash, I won't buy it.I can’t be a true PH’er, I don’t change cars often enough.
Obviously cash is king with private sales, but noticed that more and more dealers aren’t interested Or don’t accept large amounts of cash. We all know they make their money through finance, couple of friends have used the finance to get the deal and then pay off within a week or so.
As others have said, personally I would rather not drain all my savings for nominal saving on a car that will depreciate, but everyone has there own preference so there isn’t a right or wrong answer
As others have said, personally I would rather not drain all my savings for nominal saving on a car that will depreciate, but everyone has there own preference so there isn’t a right or wrong answer
mattman said:
As others have said, personally I would rather not drain all my savings for nominal saving on a car that will depreciate, but everyone has there own preference so there isn’t a right or wrong answer
The thing is, whether you can afford to pay cash for a car isn't really a binary thing. I do pay cash for my cars - however, whether I can "afford it" is a lot more complicated than whether I have the asking price in my bank account. It's whether it also leaves me enough money for unexpected financial outlay / suddenly losing my job etc. etc.Gassing Station | Car Buying | Top of Page | What's New | My Stuff