Reply to: Buying a car: finance or not finance

[dundeedude]

Nobody appears to have mentioned inflation. Finance can be a very good idea in the case of a negative economic outlook that may return positive during the period of your finance terms.

I'd rather finance £10000 at 3% and place the cash I would have spent on the car into a mixture of savings, funds and a group of shares than hand over the cash; especially if it's just for a car.

[kingcook]

Used, tend to buy in 7-9K region 500 down and over 4 years. Hand back at 2 years.

Actually it doesn't look like such a good deal anymore to me.

You're shelling out thousands for a car, then handing it back and getting nothing in return. Any repairs you do (I guess) would be money down the drain.

Much better to buy your own used car. At least you can sell and get money for it after a while.

[Scrag Meister]

Cash if you can.

[KentPhilip]

Don't listen to these losers.
You're a contracator.
Send your butler to buy a posh new car for cash.

Sas is quite right of course. If you're a contracator you should reserve the latest Bentley for the butler. For the rest of us who can spell, a souped up Astra chavmobile is just fine..

[Gibbon]

Doesn't mileage come into it though? Or am I thinking of the plans where there's a balloon payment at the end?

Is this pure HP? Got any links for how to finance this....

I use Car People, browse for a few weeks and buy when I see the right car. Straight HP, been with Black Horse the last three times, no mileage restriction, but must keep serviced as part of reasonable care etc. Small dents etc are ok when >100k. Check the termination rights in the small print.

It does put a VT (voluntary termination) marker on your credit rating but not a downgrading of it as it's a right not a default etc.

It is only worth while if you're doing >25Kish a year though.

[Paddy]

Got a very nice Merc A class for the wife for £1700. 50K, immaculate condition.

Before you call me a tightarse - much better than the £400 matiz she used to have....

I budget to get the cam belt changed unless there is absolute proof it has been recently done. I bought a second car just to run around London . A 10 yo Diesel Fiesta for £550. I wanted it to last three months. I did nothing to it (not even a cam belt or wiper blade) and did not even bother to change the oil as I was going to scrap it. 12k and two years on it is still going, not a drop of oil added, no top-up for the rad, passed MOT. The tyres are near end of life so it is going in a few weeks.

[psychocandy]

Used, tend to buy in 7-9K region 500 down and over 4 years. Hand back at 2 years.

Doesn't mileage come into it though? Or am I thinking of the plans where there's a balloon payment at the end?

Is this pure HP? Got any links for how to finance this....

[Gibbon]

Sounds interesting. Is this for brand new cars only, or my preferred option of buying a used car?

Used, tend to buy in 7-9K region 500 down and over 4 years. Hand back at 2 years.

[kingcook]

I always finance my cars. However I always hand them back worth significantly less than I owe as I do >40K miles per year. With HP you can hand the item back once you have paid half the agreement total with no questions asked as long you have taken reasonable care of the goods. I'm on my 5th car doing this.

Sounds interesting. Is this for brand new cars only, or my preferred option of buying a used car?

[northernladuk]

This reserve isn't company money is it???

[tranceporter]

Go buy yourself a nice used car. Plenty of them in the market. No point in buying a new car because the price drops like a lead pigeon in the first 3 years. Besides, I do contracting so that I can have more fun in life, which I could not have on permie salary. I do not believe in "saving for a rainy day" all the time, because you can never predict what's gonna happen next. To put this into perspective, I have a Mazda 6 MPS as a daily runner with 86k on the clock (was 39 when I bought it 3 years ago), and a supercharged VXR8 i use on weekends. Needless to say, I will be selling the VXR8 and MPS in 5-6 months, and go for something like a turbocharged 2.8 V6, but that's only after I have had enough "fun". I work to live, not live to work.

[wikramasingha]

Got a very nice Merc A class for the wife for £1700. 50K, immaculate condition.

Before you call me a tightarse - much better than the £400 matiz she used to have....

I used to have the Chevrolet Matiz.

[psychocandy]

Not sure I'd go as low as 2k, but definately would never buy a new car. Why take the hit on the depreciation. Let another person do that and pick it up once its 3 years old. Ive got a Mondeo diesel on a 55 plate. I got it when it was about 2.5 years old for £6.5k. Its had no repairs other than normal wear stuff like tyres and the like. I got it on 39k miles and its currently on 104k. Its probably due a big repair now - it pumps out tons of black tulip as it accelerates - If (when) it comes along I'm tempted to pay it since I know my cars history, which is something I can't say for a 2k replacement

Got a very nice Merc A class for the wife for £1700. 50K, immaculate condition.

Before you call me a tightarse - much better than the £400 matiz she used to have....

[eek]

not all of us have got clients who'll let you work from home in an emergency. For some, its a case of no-show at office = no billing. Could be expensive.... thus you need a car that you can rely on at least....

[Sasmode] Clearly you're no good. All my clients let me work from home when its convenient otherwise work isn't done on time. [/Sasmode]

[psychocandy]

Don;t agree with some of you.

Dont spend whole/majority of warchest/savings on a car. Not much good having a nice car only to find out your contracts terminated and you're savings has just tied up in a car (which you might need to then sell and lose loads on).

Yes, it will cost you to get finance but rates are pretty low at the moment. I'd rather leave my warchest/savings alone, take the hit but keep the flexibility of having my warchest/savings available to me.

Example, £10000 over 3 years at 5.1% will cost you £787 interest (£21.86/month). Alternatively, whip the £10K out of your savings (assuming 2%) and you'll lose approx £480 (£600 gross) (£13.33/month).

So £8 a month for having the flexibility of having money in my account and not having it tied up in a motor with the possibility of having to flog it if you're in trouble. Of course, in a year or twos time if you're looking good you can always pay off the loan early (only costs a months interest normally).

Of course, none of this applies if you've got a huge warchest/savings anyway then fair play take it out. But for me £10K is a bit of chunk at the moment.

As for which car thing. Agree what you say about not wasting on posh cars but us contractors need reliable cars to get us to client. Only permies can blag it/take a days leave cos the motors broken down - not all of us have got clients who'll let you work from home in an emergency. For some, its a case of no-show at office = no billing. Could be expensive.... thus you need a car that you can rely on at least....