I look into it, with my accountant, every time we change cars; so far, it's never worked out favourably.

 

But based on what you have said Matt, even if it works out financially favourable to your benefit, you still wouldn't do it!

 

Nope, I probably wouldn't.
It means financial commitment and a form of debt; two things I hate. I like to be in full control; and polish my own cars

Old skool but our easy credit/finance culture has done is no favours. I refuse to join it.

 

Matt,
Everyone is obviously entitled to their own opinion, but I just don't see any logic in your view.

What's the difference between throwing all your money in one go, as opposed to doing it on the drip feed, potentially costing you the same regardless (and let's assume it does). Although if you throw all your money in, your tying your cash up in something that will depreciate and not earn you anything.

The above is assuming that financially it would equal the same (apart from the lost interest I'm referring to). Obviously, if it physically costs less to buy up front, then it does to finance...... that is a totally different discussion - I get you on this one.

 

Well said

 

I can sell my car at any time. You can't cut a lease/PCP short without a harsh penalty so you could argue that your cash is more tied up than mine.

Besides, I believe in saving for things. If I haven't got enough money to buy something, I can't afford it. Something many millions of people could do with realising too.

 

I suspect with Matt its more a perosonal objection to using available finance products than anything else.

The easy credit/finance culture to which Matt refers is only an issue if you can't afford it in the first place.

When we "bought" our last car I worked the numbers every which way. The total cost of ownership for a three year period worked out pretty much the same whether we a) paid cash outright; b)PCP'd or c)HP'd.

I chose b), because it kept the capital available for other uses and it was cheaper monthly than HP (obviously).

It just made sense.

Doesn't make me complicit in our easy credit culture. In fact, and Matt will appreciate this, the car is the only finance agreement I have. Or had, as as we sold it last night.

 

Bollocks Matt.

You really just make it up to suit your agenda.

Sold a PCP'd car last night half way through its term. Not only were there no penalties, I got a substantial interest rebate.

 

Matt,
You're assuming I or anyone else hasn't got the money to buy outright, whilst that may not be the case for all, the opposite is also possible - that it is the case.

My cash is certainly not tied up in my car. I have zero penalties. I can pay the whole remainder of the agreement (which is interest free) today, tomorrow or whenever within the term I have - I can sell my car whenever I wish. Obviously my deal is TOTALLY different to a normal lease scheme. It is, in my opinion, the perfect way to purchase my car, but we're digressing here in respect of this conversation about lease - however, you do keep referring to me (so my situation), so just wanted to make my situation 100% clear.

 

You still paid interest though. I didn't.
I was offered a PCP deal; £4k off list but by the end of the term, I would have paid more than list price. I got £6k off by paying cash.

Still, you appear like many others to regard these deals as a form of charity; just what the financiers would like everyone to believe. But of course, as financial geniuses with more money than the Queen, you can both afford it however you pay for it.

Did the car finance thing in my early adult life; never again.

 

100% agree.

 

Matt, don't you read what people post? Serious question.

Yes I paid interest. Very little on this occasion, however.

That was the cost of not having £30k capital tied up in a depreciating asset. You have yourself said on this very forum that you need to sell your van to free up capital for an investment. Paying interest is the cost of not having to do that, to not have the hassle of selling and the hope that a good price can be achieved.

I was free to use that capital for anything I wanted. that's the "cost" of paying interest.

Could I afford to pay the interest for all those upsides? Yes. Was it worth it, absolutely. And as I have said, overall, the additional cost of the PCP means of having that car was negligable over a cash purchase. What it did, however, was de-risk the deal.

I negotiated the price and discount before I even mentioned payment method to the dealer. So it had zero bearing on the discount.

In your case, you *could* have negotaited your £6k discount and pcp'd from an external source had you wished. Dealer no wiser.

The only person who seems to think that anyone sees these deals as charity is you. We, on the other hand, appreciate there is a cost, but its not that great and the upsides make that cost a positive bargain.

And however bitterly it sits with you, yes, I could have afforded to do it however i wanted. i'm not sure what you point is though given that clearly you also can afford to do it any way. Does that mean you too have more money than the queen?

 

Nope it just upsets you that someone else that can afford it chooses a different route to owning a car.
You've done your sums, I've done mine. Clearly both are happy with the result.

Let's leave it at that. Anyway, it's nearly beer O'clock...

 

Matt,
You're so far off it's untrue. It's like your wires aren't connected properly.

It's YOU that ridicules us, not us that started a thread saying "I can't understand why people pay for a car with their own cash upfront blah blah blah".

I doubt DD is upset with how you've spent your money. lol

 

I can assure you I neither care nor does it upset me

Just don't be so quick to assume your way is the correct way and others are wrong

Anyway, agreed. Sod this working malarky. Its Friday night! Enjoy

 

I respect that Matt, well said, I'm of the same opinion.






"Matt now changes his mind because Chris (me) agrees with him".

 

Chris - that's twice in a week...

 

How did you invest the 30k to better Matts over6k saving due to cash deal?

I've been looking at some different crowdfunding options but get a headache then give up.

 

Each to there own I say, however there seems to be a general assumption that those who choose not to pay cash for their cars are somehow not financially shrewd.

This is totally wrong.

Personally at present I don't have any form of borrowing either business or personal, I also don't have a mortgage on my property. However I have borrowed / leased in the past and would do again in the right circumstance.

I know of some incredibly cash rich businesses and individuals, yet they still wouldn't hesitate to lease a vehicle. They tend to work on the basis of pay cash for anything that appreciates in value and lease anything that doesn't.

 

No penalties with a PCP deal as far as I'm aware/have experienced. However, with the lease deals, as far as I understand it, you are required to clear the rest of your deal upon cancellation... but surely you'd have more trouble getting out of your owned car than someone on a lease/PCP because unless you give it away to the trade, you'll have to wait for a private sale.

Using an M135i and two people with 27k to spend on a car as the example:

Person 1 loves it, buys a boggo/lease spec 3dr manual for 31k minus a 4k discount... clearing a 27k balance using his savings and owning it outright.

Person 2 also loves it, signs up for a boggo/lease spec 3dr manual using a 2k deposit from his savings and agrees to pay £250 per month for a further 23 months, before handing it back.

Both guys love their cars for 12 months, putting 10k miles on them... however, simultaneously, they fall on hard times and both need to give up their M135i quickly.

Person 1 puts his car details into Glass' basic valuation as a rough guide, finding the part-exchange price of £18,100 and £22,500. Assuming the car needs to go and there is no time to go through the inevitable hassle of a private sale, an decent offer of £20k is given by a dealership, so he sells it... he is 7k out of pocket after 12 months/10k miles and is able to pay 20k back into his savings account.

Person 2 calls his finance company, they let him know that he is liable for 12 x £250, meaning £3000 is needed to pay off the agreement. It's paid using money from his savings, the car is collected a couple of days later and a line is drawn under it... he's paid 8k for 12 months/10k miles and (after deposit/penalty) still has 22k in his savings account, since 99% of monthly lease payments come from wages/income rather than savings.

But assuming Person 2 financed it solely from savings, over the course of 12 months, £1000 is not really a huge gap and depending on the condition, dealer stock levels, etc.. that deficit could easily be reduced by a slightly weaker offer to Person 1 by the dealer. Add the fact that Person 2 has had 25k extra in his account since the point of collection and it makes it an attractive and low risk way to finance a new car, IMO... providing you're not looking to keep the car long term.


Completely agree.


It might not be about investing at the time of purchase, alternatively it might well be... the point is, assuming both people are on a financially level playing field; if an opportunity or problem came up which required substantial funds quickly, then if you have bought your car outright and tied up 30k in a depreciating asset then you're less likely to be able to move as quickly as the other person who spent 2k up front and kept the other 28k in his account.

It's a personal choice to finance your car, really depends whatever way works best and is as stress free as possible for you... nobody should try to tell others they were wrong or try to mock others for their choices; which is unfortunately something that Matt doesn't seem to get or accept going by his posts.


Cheers,
Grant

 

M135i is yesterdays news, all about the Mustang for £32,995, with 435 bhp.

 

Let's not pìss about, most people that drive round in a new M135i for example do not have 30k in the bank, i would bet they don't even have 1k.
If Shaun and devil are the exception then great, but in reality most people push their moneys to the limit as can be seen in the big *** financial situation we have been having for god knows how many years.

Matt (person 1) said he got 6k off his car where as paying drip etc i doubt you would get the same off.(i may stand corrected)
Plus, saying the person who owns the car outright would be stuck with the car for some time trying to sell it then going to a dealer to have his pants pulled down is pushing the extreme, im sure there are examples of financing at it extremes also but not seeing balance.

 

Righthand drive too.

 

Stand corrected. I got a similar amount off a new C class merc on a pcp

 

So where are you financial geniuses investing your £30k if you can easily afford to buy outright?
Because the rest of our cash earns very little in ISAs and savings.
I clearly need enlightening.

 

We don't invest in ISAs for a start!

 

I just wonder how many of the leasers/PCPers that boldly proclaim they can easily afford to pay cash but choose not to, actually have £30/40/whatever grand genuinely available as liquid cash?
I bet it's not many.

 

Property so people like you can pay for my retirement

The only car I pay for outright is the wife's as they only tend to be around the 10k mark.

Now let's turn this into a I'm considerably richer than you are thread.......

 

Point completely missed in a desperate attempt at looking clever.

 

Desperate attempt or am I trying to bring you down again, you have serious issues boy.

You asked what people do with their 30k so I told you, what's clever about that?