Get finance or pay cash for a new car ??

chaparral

chaparral

chaparral

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Joined
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Guys am looking at buying a replacement car but am a little confused on if I should pay cash which would use most my saving or get a loan/finance for it :confused:

What would you do ?



I been looking around at cars priced around 5k
 
As in both at £5k, or a £5k cash budget or higher if on finance?

If the first, currently savings mean little and interest on loans aren't great, so cash would make sense, unless you might need what's in there - it depends what type of car it is you're after, you may need a slush fund.
 
Marvin said:
As in both at £5k, or a £5k cash budget or higher if on finance?.
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I have roughly around 6k in the bank and I been looking for a car priced up to around £5,000 max ...

Marvin said:
it depends what type of car it is you're after, you may need a slush fund.
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No idea at the moment just looking around at everything..I like the BMW mini's but the boot space is crap :(
 
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A brief search will reveal that the OP is very indecisive and relies on the responses of this forum for questions that are important to him / her.

No pressure..! ;)

Let's take a step back - why are you replacing your car?
 
Cash, I took out a 5 year loan for a car and after the excitement died down all I saw was the repayments. I got a fun car so the first 3 years of payments were ok I guess. Plus the small matter of interest I paid 1300 at 5% odd fixed rate on 7k loan

Fact is had I been patient I could have got my car cheaper, and without paying all that interest !! unless your making a 7% plus after tax return your nearly always better using cash savings over a loan
 
The_Abyss said:
A brief search will reveal that the OP is very indecisive and relies on the responses of this forum for questions that are important to him / her.
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I just think it always best to ask around before jumping head first into something..
(Two heads or more is better then one kind of thing)

The_Abyss said:
Let's take a step back - why are you replacing your car?
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RX8 with low compression..;)
Or I could just pay for the engine to be rebuilt which would Cost around £2k+ at a guess..
 
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chaparral said:
I just think it always best to ask around before jumping head first into something..
(Two heads or more is better then one kind of thing)

RX8 with low compression..;)
Or I could just pay for the engine to be rebuilt which would Cost around £2k+ at a guess..
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Too many cooks spoil the broth.

If you ask enough people then you'll find a reason not to buy any car.
 
When it comes to cash v finance just ask yourself:

Will the interest I gain on £xxxx in savings be more or less than the interest paid on £xxxx finance. If its more then take finance, if less then pay cash.
 
As above, can you make more on the savings than the finance will cost? At 5k its highly unlikely ( without a bit of moderate risk at least) so I'd just use the money.

If you do decide to finance then be absolutely crystal clear on what you're actually paying though. The example above of 1300 interest after securing 5ish% over 5 years on 7k is more like 7%......I'm guessing he has just rounded here and there which will make the difference but many people haven't a clue what the real cost of borrowing is - car salesmen included
 
I never seen that post. Yeah if you like the car get it sorted, you'll be able to recover a good bit of the cost if you decide to sell it on whilst it still has engine warranty anyway. If its buggered just now it's worth what, a grand?
 
Why anyone wants to 'double' their losses through depreciation and paying interest is completely beyond me.....

Always cash, if you can't afford it you shouldn't be driving it. TBH I wouldn't even finance a 50k car with a 35k deposit.
 
Subliminal Aura said:
Why anyone wants to 'double' their losses through depreciation and paying interest is completely beyond me.....

Always cash, if you can't afford it you shouldn't be driving it. TBH I wouldn't even finance a 50k car with a 35k deposit.
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+1

Why people do finance is beyond me. If you cant afford it don't buy it, until you can.
 
bakes0310 said:
+1

Why people do finance is beyond me. If you cant afford it don't buy it, until you can.
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Because some people need a car, but at that moment in their life don't have a budget to pay a car off? Yes, they could wait 3/4 years of saving up, but then they've lost out on car ownership for that amount of time.
 
Sometimes finance is 0%..

It's a bit stuck up to say if you need a loan you can't afford it, if you can afford the loan repayments then you can afford it.
 
bakes0310 said:
+1

Why people do finance is beyond me. If you cant afford it don't buy it, until you can.
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Because what happens if I use my saving to buy the car and then i lose my job and have no saving or very little saving left to pay the bills...

Where if use finance to buy a car i still have my savings as a safe guard..
 
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