Does everyone just buy their cars with credit or...

grimm said:
I don't really want to own a nice car outright for any period of time anyway because of the depreciation.
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So instead you pay the depreciation anyway only wrapped up in a nicer sounding wrapper.

With the exception of manufacturer subsidised deals, which are quite rare, you cannot avoid depreciation on a car unless its a car that doesnt appreciate. Cars lose money - somebody has to take the hit and it isnt going to be the people you got your PCP from is it?

I love the way everyone thinks they avoid depreciation with a PCP!
 
Discounting pcp outright like you seem to do though is silly as there are some good deals to be had occasionally and no hastle trying to find a buyer for a 10k + car when you decide to change:p
 
Jonny69 said:
Lots of expensive cars in my area, generally Range Rovers, big Audis and BMWs. Go back a couple of years and people were paying for them through the huge amount of equity they'd made on their houses, now they can afford to finance them up because their mortgages cost them bugger all.
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I really hate the fact that the older generations had it much easier with the housing market, and us younger types are almost locked out of it. Almost all the property developer types are all 40/50, who made their money off the massive jump in equity of their homes.

back on topic.........I was going to look at finance on a car, but I thought the more sensible way to do it is the other way around. Save first, buy later.
 
Slumberbox said:
Discounting pcp outright like you seem to do though is silly as there are some good deals to be had occasionally and no hastle trying to find a buyer for a 10k + car when you decide to change:p
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I don't 'discount it outright' (Though personally I doubt I ever will - I like my car to be mine), there are some circumstances where it makes sense - the recent BMW deals on 5GT's is a prime example. But with more normal noes people think they escape depreciation - which of course they absolutely do not! They just pay the depreciation on the car *and* the profit margin for the finance company.

The reason people take a PCP is simple - by financing the depreciation on the car, it gets them into a car which put bluntly would be unaffordable otherwise. If your £35k car will depreciate £20k in 3 years, financing that £20k is affordable in ways that financing the entire £35k isn't.
 
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Most luxury cars are financed, usually through company schemes. I wish I was in a position for a company car :(
I paid cash for mine; I prefer my cars to be my own and won't ever buy a new car unless a company is paying me to do so or I start earning a lot more money.
 
Siliconslave said:
I think there is allot of people who think 'I can afford to pay £500 a month on my car' so get a lease on something fancy ignoring the fact that they are just renting it...
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My brother in law done this - got himself a brand new Mazda 323 Sport which while not my cup of tea was a nice car.
He's now got a brand new Mazda something or other people carrier using the same scheme. :(

Siliconslave said:
I however save up :)
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Then he wonders why we've "only" got a 55 plate Fiesta and a 59 plate Focus? Both our cars are belong to us and were bought with cash having done the above. :)
 
Submitted an order for a top line Insignia Tourer today via company car scheme. P11d value over 30k but I would never pay it outright. As I have no cash option on the scheme I went for what I wanted and was reasonable. Fully maintained and expensed including private fuel and taxes for under £200 per month. I was paying more that that on private fuel for my own car ignoring other costs. I would guess a lot of people do the same.

A relatively cheap way into an expensive car.
 
There is nothing wrong with credit if it's used sensibly. I paid cash for almost all of my cars, even my new Porsches but right now I can get a loan at 1.9% and put the money I would have spent into a CD earning 7%. It makes far more sense to net 5% on my money than to put 100% down on a car and lose the interest from it.

Better still, as I've done recently I can buy property to rent and net 40-50% per year with an appreciating asset.

That said, I don't advocate 100% loans at all and I still usually recommend at least putting the depreciation down as a deposit. Personally the equity in my trades tends to be worth 70%+ of the new car anyway.
 
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[ui]ICEMAN;21322586 said:
There is nothing wrong with credit if it's used sensibly. I paid cash for almost all of my cars, even my new Porsches but right now I can get a loan at 1.9% and put the money I would have spent into a CD earning 7%.
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Why not get a loan for £500,000 and put all the money you get from it into a CD earning 7%? Bingo, PERPETUAL MONEY MACHINE :D
 
radderfire said:
I avoid car finance and other forms of high interest debt like the plague, and would advise anyone else wanting to have a relatively stress free and happy existence to do the same. Give me a 2005 Fiesta that I own over some posh vehicle that is bleeding my finances dry any day of the week.

Rgds
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It ultimately depends on the finance deal. A lot of dealerships offer new cars at sub 5% interest deals. If you didn't have the cash, you couldn't find a deal that good from the bank. So buying new "can" make sense.
 
Surely with time, investing money in a car will total up. I may be talking nonsense here but, spend £10k on a car, the next year sell it for £7000 and spend another £5000 and you are in a £12k car. Do this for years and logically it will build up and you will end up in a nicer car over time?
 
wingman said:
It ultimately depends on the finance deal. A lot of dealerships offer new cars at sub 5% interest deals.
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Because the rate is subdised by the profit on the car. It's usually in lieu of a discount you'd otherwise have been able to acheive.

In most situations, the only winner however you buy is the dealer and manufacturer. Which is fairly obvious really given they set the rules.
 
hurfdurf said:
Surely with time, investing money in a car will total up. I may be talking nonsense here but, spend £10k on a car, the next year sell it for £7000 and spend another £5000 and you are in a £12k car. Do this for years and logically it will build up and you will end up in a nicer car over time?
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clever that, one day you'll be a millionaire just by buying cars
 
[TW]Fox;21322689 said:
Because the rate is subdised by the profit on the car. It's usually in lieu of a discount you'd otherwise have been able to acheive.

In most situations, the only winner however you buy is the dealer and manufacturer. Which is fairly obvious really given they set the rules.
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you do get a car though
 
[TW]Fox;21322783 said:
No you don't, you get the use of a car. But I'm not sure what your point is.
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well you haven't totally lost because you have the use of a car.

to some people that can be of value
 
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