Is your car on finance?

[TurboTomato 90]

AVSIM being the worldwide resource it is I thought I'd see if the buying habits of those in the UK are reflected across the world or not.

 

Simple question - is any of your car (if you have one!) paid for on finance?

 

The UK has definitely seen a large shift from mainly buying cars outright to being more concerned about getting a new car and the monthly cost of that on finance.

[squerble 300]

My last two were on finance but my current one is all mine. I wouldn't hesitate to buy in finance again.

 

If you buy a car on finance, always compare the offered finance with an unsecured loan from your bank. More often the bank will have lower rates, the car is 100% yours instead of PCP/HP, and you can sell on if you need to.

[Matthew Kane 1,343]

I always pay cash for my cars and buy used. That way you don't lose value in depreciation or the cost of borrowing money. Cars are the worst investment anyone will ever make.

 

I can buy a 5 to 10 year old Honda Civic or Toyota and keep it going for another 10 years easily. That is getting value out of a vehicle in my POV

[TurboTomato 90]

Yeah I've bought cars on finance before - mostly unsecured personal loans but one I did directly linked to the car.

 

Now me and the other half have 2 cars, hers 4 years old, mine 6.5 years old (both bought within the last 3 months) both owned outright.

[Raindance 25]

I always pay cash for my cars and buy used. That way you don't lose value in depreciation or the cost of borrowing money. Cars are the worst investment anyone will ever make.

 

I can buy a 5 to 10 year old Honda Civic or Toyota and keep it going for another 10 years easily. That is getting value out of a vehicle in my POV

Sensible man. I do the same. With old cars you're at the bottom of the depreciation curve, and if you're handy with a spanner you save even more :rolleyes:

[Airbus Commander 563]

I have two cars, one a month old, the other 2 years old, both bought new with cash, no point paying interest to a bank etc when you have the cash free to pay for things yourself. When you actually calculate the amount you'll have to pay back in interest it can suddenly add a fair chunk onto the price of a car.

 

I'd avoid buying used cars, you just don't know how the previous owner was with them. My first two cars I bought used and both had bit and pieces falling off them, the gear box in tatters etc. Decided after that it was a false economy, and new cars are more comfortable too.

 

Regards,

Ró.

[RWFeldman 159]

The worst investment you can make? A new car! But we need to keep the automakers working. I'll leave that to the plutocrats. :excl:

[TurboTomato 90]

I have two cars, one a month old, the other 2 years old, both bought new with cash, no point paying interest to a bank etc when you have the cash free to pay for things yourself. When you actually calculate the amount you'll have to pay back in interest it can suddenly add a fair chunk onto the price of a car.

 

I'd avoid buying used cars, you just don't know how the previous owner was with them. My first two cars I bought used and both had bit and pieces falling off them, the gear box in tatters etc. Decided after that it was a false economy, and new cars are more comfortable too.

 

Regards,

Ró.

 

All good if you can afford it Ró :wink:

 

A Golf with a few options is the wrong side of £20,000 which is not much less than the average gross salary of someone in the UK!

[nolatron 12]

We have two cars, 2004 Mazda 3 and 2006 Toyota Corolla. Both were purchased using financing through the dealer but have been paid off for a few years now so they're all ours.

 

If the time ever comes to buy again, we'd have to finance at least 50% probably. But that's only if 1 of the current cars blows up or something.

[Airbus Commander 563]

All good if you can afford it Ró :wink:

 

A Golf with a few options is the wrong side of £20,000 which is not much less than the average gross salary of someone in the UK!

Well my new car was my little treat for myself LOL, besides someone has to buy them new to begin with right? ^_^ Besides, I wanted to get myself one of the funny new registration plates that are out for this year here in Ireland... :rolleyes:

 

Driving a nice Audi A7 now, it's my little baby, first new car I've had in 5 years... ^_^

 

Regards,

Ró.

[pinlifter 502]

I've paid cash for every car I've owned both new and used up until this last one. Bought a new Honda CRV and then 6 months later I was "pressured" into getting a Honda Fit for my oldest daughter. The wallet was still smoking from the still recent CRV purchase AND paying for college, so I grudgingly financed it. Fortunately the 0.9% finance rate made it less painful and here less than 2 years later it's nearly paid off....wooo hoooo!

[Sizel 4]

My Wife and I own both our cars. Mine is second hand and hers was bought new. Both paid for with cash. No finance for us as that means higher monthly outgoings which requires having to work more hours. No thanks : )

Plus i do my own maintenance on my car where possible. Keep the costs down and all that.

[cmpbellsjc 2,960]

The way I go about deciding whether or not to finance a car is this. If I can get a deal where the interest is low enough that I can keep all the money and make more on it by trading/investing than what the interest costs over the length of the loan then I will finance and keep the capital to put to work. For example, last year I bought a one year old BMW 335i Coupe and got 0.9% for 48 months with no early payoff penalty. The total interest on the life of the loan was only around $800 dollars or so. In this case it made sense to finance and keep the other $35k and put it to work where i can make a $1000 a month off it it. But, if the interest rate had been high enough where it would have cost me $3000+ interest over the life of the loan and I didn't have the knowledge to make money off the capital it cost to buy the car, I would have just financed as painful as it would be

 

When it comes to financing anything that's really the only way to go about it. If the rates are low enough and you can make more by keeping your cash and putting it to work, then finance. If you don't have the money to pay outright or don't know how to put money to work to make more than the interest paid by financing, then financing is really the only way to go.

 

When it comes to new or used, I know only buy used. It just makes me cringe to think of how much money is lost when you drive off the lot and put 10k miles on a car. As mentioned, cars are the worst investment you can make unless it some collectors type of car that might appreciate in value. I've been lucky that all the used vehicles I have owned have been fine, but its the luck of the draw. I know people with new cars that have had loads of problems and while they might be covered under warranty, its still a major hassell when you go to leave for work and the car wont start or something else is wrong. I just buy used cars that still have a bit of warranty left and let the prior owner live with all the money he lost from depreciation.

[Raindance 25]

"I've been lucky that all the used vehicles I have owned have been fine, but its the luck of the draw."

I've been lucky too -- mind you I'm pretty handy at spotting potential clunkers. I've had my latest given a thorough look-over and service at the local garage every six months for the last few years, and that has definitely paid off in catching problems while they're still minor.

 

It's fifteen years old now, and while it still goes well, will most likely be ready for the knacker's yard in a years time. However we'll be leaving the country in a couple of months so I'll just sell it for whatever I can get.

[Chase 303]

I always pay cash for my cars and buy used. That way you don't lose value in depreciation or the cost of borrowing money. Cars are the worst investment anyone will ever make.

 

I can buy a 5 to 10 year old Honda Civic or Toyota and keep it going for another 10 years easily. That is getting value out of a vehicle in my POV

 

That's how my next car will be. Read similar advice out of a book called Total Money Makeover by Dave Ramsey.