Car financing...

[DaveP]

Interested in people's thoughts on the best way to buy a car...

Audi finance etc??
Bank Loan ??
Outright ??

If you have the money to buy outright, are you better off going for a finance option and investing your dosh elsewhere ?

Opinions guys...

[PhilT]

Speak to insurance Jon!!

[daddyjohal]

If you have the money to buy outright, are you better off going for a finance option and investing your dosh elsewhere ?

If you have the cash ALWAYS buy the car outright. Putting the dosh elsewhere probably won't give you back the amount you will definitely spend on interest on your finance scheme. Regardless of whether it's contract hire, lease, finance, loan etc. it's always best to buy what you can afford without borrowing.

[Iain]

John sorted me out with a FANTASTIC finance deal. Miles better than anyone else quoted me. An MTM Stage 3 never looked so desirable!!!! So much so, I'm picking it tomorrow! Its being replaced with a lesser model, mass production, less exclusive........an SL55!!!!!! [img]images/graemlins/roflmao.gif[/img]

If I could just get those 6 numbers.......

[Neo]

This also interests me, as I am thinking of whether to save up and buy the car out right or save a lump some of money and pay the rest off per month. What do you guys normally do?

Any comments would be appreciated.

Thanks [img]images/graemlins/thumbs.gif[/img]

[Gareth]

If you have the money to buy outright, are you better off going for a finance option and investing your dosh elsewhere ?

If you have the cash ALWAYS buy the car outright. Putting the dosh elsewhere probably won't give you back the amount you will definitely spend on interest on your finance scheme. Regardless of whether it's contract hire, lease, finance, loan etc. it's always best to buy what you can afford without borrowing.

Have to disagree here.

Why would you want potentially all your capital tied up in sure fire depreciating asset i.e. the car?? [img]images/graemlins/spineyes.gif[/img] Plus if/when you need/want to get out of it you have get it done asap (and potentially for less than market value) if need the capital elsewhere [img]images/graemlins/tongue.gif[/img]

It makes more sense to secure an attractive finance arrangement that suits your own personal situation.

Just my (financed at low rate) 2p's worth.. [img]images/graemlins/nodder.gif[/img]

[DuncS3]

For what its worth I agree with Gareth, I would rather have my money in the bank than in a depreciating peice of metal. No way would I ever pay full cash for a car (unless I was seriously loaded of course!)

Dunc [img]images/graemlins/s3addict.gif[/img]

[Neo]

So Gareth do you mean use a finance package from audi? and pay for it per month. Or take out a loan from the bank?

[peterb]

No way would I ever pay full cash for a car

Oh dear - the only purchases we've ever taken out loans for were houses, and we even paid off the mortgage when the tax incentive ended.

I don't see the point of paying a higher percentage to borrow than the cash can earn in a high interest account.

[daddyjohal]

If you have the money to buy outright, are you better off going for a finance option and investing your dosh elsewhere ?

If you have the cash ALWAYS buy the car outright. Putting the dosh elsewhere probably won't give you back the amount you will definitely spend on interest on your finance scheme. Regardless of whether it's contract hire, lease, finance, loan etc. it's always best to buy what you can afford without borrowing.

Have to disagree here.

Why would you want potentially all your capital tied up in sure fire depreciating asset i.e. the car?? [img]images/graemlins/spineyes.gif[/img] Plus if/when you need/want to get out of it you have get it done asap (and potentially for less than market value) if need the capital elsewhere [img]images/graemlins/tongue.gif[/img]

It makes more sense to secure an attractive finance arrangement that suits your own personal situation.

Just my (financed at low rate) 2p's worth.. [img]images/graemlins/nodder.gif[/img]

Er, don't quite get that idea. I think you'll find whichever method you use to fund your car, it'll depreciate the same! So let's say you take out finance for your car, it's still gonna depreciate by the same amount as if you bought it cash, but now you're paying stupid amounts of interest to the bank or finance firm and you're only earning a pathetic amount of interest in the bank. Besides property, there aren't many sure fire ways of getting a decent return on money nowadays, but you are GUARANTEED to pay the interest on the car. There's no agreeing or disagreeing here, it's plain and simple maths.

Want proof? Ok. Ford make their profits by borrowing money from banks to build the cars they then sell to the public on finance, but they charge the public more than the banks charge them. Simple. They make a greater return out of you than the banks or other forms of investment would give them, so by financing your car you are paying over the odds.

[daddyjohal]

No way would I ever pay full cash for a car

Oh dear - the only purchases we've ever taken out loans for were houses, and we even paid off the mortgage when the tax incentive ended.

I don't see the point of paying a higher percentage to borrow than the cash can earn in a high interest account.

Exactly.

[Gareth]

So Gareth do you mean use a finance package from audi? and pay for it per month. Or take out a loan from the bank?

For me- and everyone's situation is different- I would take out a balanced payment plan with an APR figure of c. 5.0% over 2-4 years. I never keep a car for longer than 6 months anyway so I want a finance package where I am paying off the interest and capital from day one.

However that type of finance may not suit all so it's best to consider the options that will suit you best and push for a good deal [img]images/graemlins/smirk.gif[/img]

I use Lombard and find them to be very competitve for what it's worth.

Good luck!

[Riz_RS4]

5.0%

abit steep aint it?

Riz [img]images/graemlins/s3addict.gif[/img]

[Gareth]

If you have the cash ALWAYS buy the car outright. Putting the dosh elsewhere probably won't give you back the amount you will definitely spend on interest on your finance scheme. Regardless of whether it's contract hire, lease, finance, loan etc. it's always best to buy what you can afford without borrowing.

Have to disagree here.

Why would you want potentially all your capital tied up in sure fire depreciating asset i.e. the car?? [img]images/graemlins/spineyes.gif[/img] Plus if/when you need/want to get out of it you have get it done asap (and potentially for less than market value) if need the capital elsewhere [img]images/graemlins/tongue.gif[/img]

It makes more sense to secure an attractive finance arrangement that suits your own personal situation.

Just my (financed at low rate) 2p's worth.. [img]images/graemlins/nodder.gif[/img]

Er, don't quite get that idea. I think you'll find whichever method you use to fund your car, it'll depreciate the same! So let's say you take out finance for your car, it's still gonna depreciate by the same amount as if you bought it cash, but now you're paying stupid amounts of interest to the bank or finance firm and you're only earning a pathetic amount of interest in the bank. Besides property, there aren't many sure fire ways of getting a decent return on money nowadays, but you are GUARANTEED to pay the interest on the car. There's no agreeing or disagreeing here, it's plain and simple maths.

Want proof? Ok. Ford make their profits by borrowing money from banks to build the cars they then sell to the public on finance, but they charge the public more than the banks charge them. Simple. They make a greater return out of you than the banks or other forms of investment would give them, so by financing your car you are paying over the odds.

with respect I think you've missed my point here [img]images/graemlins/tongue.gif[/img]

1. I was not saying that if you finance a car it will depreciate any different to the rate if you had purchased it outright for cash.

2. Who said anything about "stupid amounts of interest"?? If you take a balanced payment finance package and secure a good deal you would be paying a rate similar to mortgage rate. To me that is anything but "stupid amounts"

3. Didn't say anything about putting the amount spent on car in a bank instead [img]images/graemlins/confused.gif[/img] Quite obviously the return on your investment there is pathetically low.

Overall my comments were referring to the fact that most cannot/will not pay in full with cash for a car as they don't have the funds to do. If you do, then that's great and I'm sure that's what you'll feel comfortable doing. For me as I own two properties (one here and the other in South Africa) I cannot afford to pay cash outright for cars. If I had an abundance of cash I would buy the cars outright, but I don't so I'm happy to just get a finance agreement that utilises my funds- partly augmented by a car allowance- most efficiently for my own situation...

Gareth.

[Gareth]

5.0%

abit steep aint it?

Riz [img]images/graemlins/s3addict.gif[/img]

How do you mean?

Compared to what? [img]images/graemlins/confused.gif[/img]