Is it worth getting a car on hire purchase?

[Jubber]

Is it worth getting a car on hire purchase?

Bank Loans are pretty cheap

[BolshieBastard]

Is it worth buying a car on HP?

Depends on whether you want to keep the car beyond the hire period. HP or a bank loan will work out a little cheaper than a lease \ PCP but this is main due to you tending to put down a bigger deposit on HP \ loan than you would on a PCP or lease.

Typically with a lease or PCP, you put down 3 times the monthly payments as the 'deposit.' With a loan \ HP, you tend to put down anything from 25% to 33% of the car's total price up front. That means dipping into ready cash or savings.

PCP's \ lease are designed to encourage you to change your car every 2, 3 or 4 years while a loan \ HP, you're more inclined to keep it a few years ater you've paid it off.

[Avalonia]

Borrowing money to spend on a lump of rusting metal is for people with more money than sense.

[scooterscot]

Borrowing money to spend on a lump of rusting metal is for people with more money than sense.

But it's how you look at the school gate that matters.

[Sysman]

I have the cash but I don't like to spend a lot in one go on a car which is a long-term cost. We also won't be feeling a 100/month...

I used HP only once and it wasn't a good experience. A personal loan from the bank or a temporary overdraft would have been infinitely better.

Reasons against HP:

• Using HP opened me up to endless pestering phone calls to take out another loan
• They wouldn't give me any discount for paying the loan off early
• The bastards really wouldn't lay off on the evening phone calls until I threw a string of obscenities at them. I have always considered it a matter of pride that I don't swear over the phone but they pushed me too far.

Conclusion: Dig into your cash but if that makes you uncomfortable go for a personal bank loan or overdraft, maybe a mix of the two.

[kaiser78]

Bank Loans are pretty cheap

Generally new car PCP offers offer better rates than bank loans, or I think so anyway.

[SpontaneousOrder]

Borrowing money to spend on a lump of rusting metal is for people with more money than sense.

Or perhaps just people with different preferences than your own :roll eyes:
I'm sure there are a lot of petrol heads who'd think that spending 100 quid on a bottle of good rum is for people with more money than sense, or people who buy a 4 bed detached house when they could make do with a 3 bed semi.

[JRCT]

Borrowing money to spend on a lump of rusting metal is for people with more money than sense.

If ever anyone says to me "You must have more money than sense". I just reply "Yes, I do".

The only phrase more patronising than that is "You've got too much time on your hands".

[deanosity]

So you are basically funding the depreciation but as Buffet says :-

I thought Buffet bought hail damaged cars as they are cheaper.

[ZARDOZ]

It used to be a more straighforward issue buying a car outright. But these days hardly anyone sells or buys private. This means when it's time to get rid you are pretty much limited to taking a big hit from a dealer, who then sells it on at a premium, or having a mess around waiting for a private buyer.

To me it's a no brainer, I don't want to have 30, 40 or 50k tied up in a car, that will be worth less than half that in 3 years, when I can pay less for a lease and hand it back no hassle. In the meantime if an opportunity arises requiring cash, it's there at hand. If I must own a car it will be second hand and minus the largest chunk of depreciation. There are deals out there where the lease cost is much less than the depreciation, why would anyone buy under such circumstances?