A sensible question!

[F&B]

Hi All,

What are your thoughts/views on sinking capital into a car purchase? When you bought your Clios did you cover the whole thing with a loan even though you had cash in the bank? Some people argue you should never plow cash into a depreciating asset - you should take a loan to buy the car and bank the cash with the interest on this covering the interest on the loan (well, near enough).

Or did you just go with the Renault finance because it was easy (or they pressured you into it)?

Thanks

 

[DrR]

Would never buy a car on finance as you don't own it, loans FTW, cars yours the day you buy it then.

 

[C.J]

Depends on:

1. How much the car is
2. How much you have towards the car
3. How much you earn / can afford to pay towards finance

I paid cash for my car. It really depends on the individual. I wouldn't have got a loan out for my car, knowing I had enough money to purchase it out-right.

 

[Peter16]

Hi All,

What are your thoughts/views on sinking capital into a car purchase? When you bought your Clios did you cover the whole thing with a loan even though you had cash in the bank? Some people argue you should never plow cash into a depreciating asset - you should take a loan to buy the car and bank the cash with the interest on this covering the interest on the loan (well, near enough).

Or did you just go with the Renault finance because it was easy (or they pressured you into it)?

Thanks

If you don't want to put cash into a depreciating asset then you will probably never buy a car.

I guess putting cash borrowed at a high rate of interest into a depreciating asset is even more expensive

I usually pay cash and get what I can afford unless the credit is interest free in which case I leave my money earning interest and just pay them back over the period of the loan

 

[weggy71]

Same here. Save up, have a price in mind for a maximum and haggle, haggle, haggle. If you don't get the price, leave your details and walk.
Online research and printouts to back up price always help.
When they need to hit their target, they'll ring!!

 

[jesus]

i just bought mine paid in cash as well

 

[weggy71]

It is a hard way to buy a car, but it is yours and although you lose money, you don't owe anyone if you have to sell early.

 

[TidyRach]

I paid for mine cash

Did consider a loan, but then decided against it because the interest on the loan would be more than anything I might earn in interest leaving my savings in the bank

Paid it outright & saving again now to top up the bank balance

 

[Initiale]

Got 0% but then I bought it new so...

 

[andrebailliesearle]

depends if yoou can earn more interest in a savings account than you pay back on loan, also look at finance schemes as some you pay interest on but in lieu you can get money off the vehicle, im a vauxhall dealer and we have a finance deposit allowance which is at 4.2% flat but you only have to borrow minimum of £1500 to get the money off which is upto £2750 on some cars, not sure if renault have a similar scheme? if they do then sometimes that a cheaper option to 0% as they say you dont get anything for nothing

 

[Daniel]

I paid for my M3 cash as i'll make money on it when I sell it.

But the A4 i've just ordered will be on Contract hire. It will depreciate the same as what it costs me to lease it for 24 months, and I have no grief of trying to sell it after 2 years.

 

[fUbAr]

paid for my car in cash... if you can't afford to pay up front, you can't afford it.

 

[Daniel]

paid for my car in cash... if you can't afford to pay up front, you can't afford it.

FFS! not this again.

So a guy I do business with has just bought an R8. £2,400 per month finance rentals alone. (+ ins, servicing, fuel, rfl etc)

He is worth over £5,000,000. Easily.

And your saying he can't afford it???

People have different priorities in life. Some prefer to spend a little each month, some prefer to save up and pay it outright. Because someone has finance on a vehicle does not mean they cannot afford it.

 

[fUbAr]

I have a different opinion to you, and that makes me wrong?

get over it.

 

[Daniel]

I have a different opinion to you, and that makes me wrong?

get over it.

Who crawled up your ass?!

I'm the one saying there is no right or wrong answer, you're the one saying your answer is the only one!

 

[DrR]

i just see getting loans etc as saving, but you get the thing your after now lol.

 

[theduck]

paid for my car in cash... if you can't afford to pay up front, you can't afford it.

Out of interest, do you have a mortgage?

 

[AlexS]

Im not siding with either of you but an interesting piece of info I discovered is that all the very wealthy people (I mean proper wealthy) buy their vehicles on finance.

Personally I paid cash for my car, im new in a job, the economys not great I could get made redundant at any minute last in first out etc.

 

[fUbAr]

Out of interest, do you have a mortgage?

nope, I rent.

 

[Daniel]

Im not siding with either of you but an interesting piece of info I discovered is that all the very wealthy people (I mean proper wealthy) buy their vehicles on finance.

.

All the rich folk I have ever dealt with have no money in the bank at all!!!

I (granted, i am nowhere near rich! lol) am of the opinion: Its no good in the bank, I can earn more out of it myself rather than leave it in the bank.

But we are not rich, and rich people would not buy a used 1*2. So I will climb off my high horse and let this thread continue in the direction it was intended...

 

[theduck]

but surely renting is as bad as paying interest on finance? both dead money

 

[fUbAr]

but surely renting is as bad as paying interest on finance? both dead money

you're right... but the way the property market is going, renting was the sensible option at the moment.

 

[andrebailliesearle]

Completely off the finance discussion but isnt now a house buyers market as the prices have dropped? i know they are going drop again but it cheaper now to buy than same time last year but rent stayed the same if not gone up

 

[theduck]

andre that really is a completely different discussion with more points of view then there are hairs on a gorillas back

 

[C.J]

If you can afford it (cash / monthly loan repayments) then get it.

 

[Dink]

i bought my clio and polo with bank loans

no way was i ever going to save up enough to pay for it outright (although i did save up about 4k towards it)

 

[rclio2006]

but surely renting is as bad as paying interest on finance? both dead money

paying interest on a mortgage is also 'dead money'...so whats your point...?:S

 

[riz]

paid for my car in cash... if you can't afford to pay up front, you can't afford it.

FFS! not this again.

So a guy I do business with has just bought an R8. £2,400 per month finance rentals alone. (+ ins, servicing, fuel, rfl etc)

He is worth over £5,000,000. Easily.

And your saying he can't afford it???

People have different priorities in life. Some prefer to spend a little each month, some prefer to save up and pay it outright. Because someone has finance on a vehicle does not mean they cannot afford it.

he is probablt VAT registered maybe? Alot of rich folk lease cars.
I prefere to use cash and part loan tbh i dont know why just something ive always done, if it was a 20k car i would prefer not to use all cash for it

 

[C.J]

but surely renting is as bad as paying interest on finance? both dead money

paying interest on a mortgage is also 'dead money'...so whats your point...?:S

It is, but you're always paying off the mortgage. Where as renting, is 100% dead money.

 

[The Chubby Pirate]

but surely renting is as bad as paying interest on finance? both dead money

I couldnt agree more

Renting somwhere thats never going to be your own! Sack that!

rent somwhere and it could cost you £600 or pay a mortgage and it could cost you £400 over 40 years....! ahem me

 

[MarkCup]

but surely renting is as bad as paying interest on finance? both dead money

paying interest on a mortgage is also 'dead money'...so whats your point...?:S

Capital appreciation?

That interest on the mortgage is a necessary evil that allows you to see the value of your investment go up.

No matter how you view renting...you never get capital appreciation.

 

[theduck]

My point was going to be IF he had a mortgage that he his own words, couldnt afford to buy it out right so couldnt afford it

 

[m4rkie23]

imo loans are the way to go. yes you pay interest but it is very small when you break it down to weekly figures for example.

obviously cash is a good option if you have a pot with thousands in, but most people dont, especially younger people.

as long as you can afford the monthly repayments you should be fine.
another thing to calculate is if the car will be worth more than the balance on the loan when it comes to selling up (if you dont wait until the duration of the loan to end).

i would take HP on a car if the option of 0% interest was available, i know you never own the car, but if you wanted to sell the car you could take a loan out to pay the balance on the HP, then sell the car and pay off the loan. would be a bit of hastle, but would save you cash, so worth it!

 

[cat171]

One of my mates borrowed 14k, had to pay back 17k, he sold the car he got with it for 10k. Yeah i'd like to waste 7k too (shakes head) The only advangae he had was that he had his nice car about a year before the rest of us.

Saving up hard for me, if I can't afford it I won't do it. I'd like an exige etc, but I don't have 25k & i'm sure as hell not going to borrow it just so I can have it a bit earlier.

That's my thoughts.