Pay cash or use finance to buy a car?

[ruth11]

Depends on the car - I've had cars where that would've been true (£400/m depreciation)

Car is a new model Mini Cooper S.

[BolshieBastard]

Yep there's GAP insurance and return to invoice. Two very different products.

That said, should have held off buying the car until the £2000 scrappage scheme comes in which looks very likely now!

[gingerjedi]

Yep there's GAP insurance and return to invoice. Two very different products.

That said, should have held off buying the car until the £2000 scrappage scheme comes in which looks very likely now!

They thought it would be a great idea in Germany... until they realised everyone went out and bought Honda's and Toyota's.

I don't see why the UK tax payer should subsidise a foreign car brand no mater where it's built.

[TykeMerc]

They thought it would be a great idea in Germany... until they realised everyone went out and bought Honda's and Toyota's.

I don't see why the UK tax payer should subsidise a foreign car brand no mater where it's built.

To be fair there isn't a British car manufacturer left that produces mainstream consumer cars:-

Ford and Vauxhall (GM) - Yanks
Toyota, Honda, Nissan - Japanese
Jaguar/Landrover - Indian

I can't think of any other mainstream manufacturer with a UK production facility.

[zara_backdog]

To be fair there isn't a British car manufacturer left that produces mainstream consumer cars:-

Ford and Vauxhall (GM) - Yanks
Toyota, Honda, Nissan - Japanese
Jaguar/Landrover - Indian

I can't think of any other mainstream manufacturer with a UK production facility.

Yes, but there are UK companies who supply parts to the companies who produce in the UK - surely as long as manafacturing remained in the UK it would benefit these supplies?

[NickNick]

Friends had their brand new car nicked off the driveway when it was about a month or 6 weeks old. The insurance only paid out a fraction of the cost of the car, but the loan they had on it was still (practically) for the full value. In this instance, the GAP insurance paid off the gap between what they borrowed and what the insurers paid out. IE the depreciation in that first 6 weeks.

[Sockpuppet]

Under normal circumstances I'd keep debt on the lowest APR - so use your cash on offset.

However it depends on how deep this recession goes.

Would you rather have access to your money if you need it, in which case take out a loan.

Personally I'd take out a loan just in case

This is what I did with my bike. I have a loan of £5k I took out for it. Now I easily have >£5k in the profit account for divs but I wanted all the cash I could get my mits on still in the bank.

I can pay the loan off at any time and it costs me only about £30 a month to service.

[ASB]

No, it covers the shortfall for any insurance payout and the invoice amount you paid for the car. So if in 2 years and 11 months my car gets written off, anyone's fault, I get my insurance payout of the value of the car at that point and then the Gap insurance gives me the rest up to what I paid for the car!

Means that it almost makes writing off my car deliberately a good idea!

Some insurers will do a return to invoice type value for the first 3 years - albeit at additional premium, may be cheaper than gap insurance.

[ruth11]

Thanks for all the replies. I think I'm just going to pay for it here and now.

I'm already overpaying into the Mortgage so if anything went particularly bad, there's plenty of cash available that I can get at anyway.

How bad do you guys think things will get with the cost of used cars? Do you think they have much further to fall?

[BlightyBoy]

How bad do you guys think things will get with the cost of used cars? Do you think they have much further to fall?

If the cost of houses continues to fall the way it has, then I would expect used-cars to go up in value. That being when everyone ditches their houses and move into the Morris.

You could probably get some nice IKEA furniture for the back of an A4 Combi.