Poll: Do you actually own your car?

[wingman]

If the **** totally hit the fan i still own 65+k's worth of cars, the other person has his rentals repossessed, i have no intention of paying to keep another company in business through creaming money off me which is above and beyond the depreciation of the vehicle.

We pay less than 3% on our loans, so the cream is minimal. That 3% buys me flexibility and puts me in a car I couldn't otherwise afford (both cars bought used but in warrany periods).

For the finacially sound choice buy a car that has hit the rock bottom of its depreciation curve (or even better, an appreciating classic!), ensure it's still safe in an accident/collision situation, and consult with your crystal ball to know it'll never break down in your ownership. Simples.

Are they still worth £65k if the bottom falls out of the market?

As I said, we've all got bigger things to worry about if it all goes to pot and things go that bad!

 

[[TW]Fox]

then I'll be beating depreciation

Arghhh!!!

 

[Vita]

I buy bottom of the barrel cheap cars which are easy to afford. It also means when I sell them on I don’t lose as much money. So yes, I own outright.

 

[wingman]

Arghhh!!!

Happy to be educated on why using that phrase causes you an issue

Having an asset registered in my name where its market value exceeds the liability associated with it is beneficial. I will then continue to make consistent, monthly payments that continue to either keep that ratio consistent or favourable. Better?

 

[Firestar_3x]

We pay less than 3% on our loans, so the cream is minimal. That 3% buys me flexibility and puts me in a car I couldn't otherwise afford (both cars bought used but in warrany periods).

For the finacially sound choice buy a car that has hit the rock bottom of its depreciation curve (or even better, an appreciating classic!), ensure it's still safe in an accident/collision situation, and consult with your crystal ball to know it'll never break down in your ownership. Simples.

As said, we've all got bigger things to worry about if it all goes to pot and things go that bad!

I have no interest in making owning a particular car more expensive than it needs to be, i also have no interest in running around in an appreciating classic.

I typically keep my cars for the longer term and like the get to know something.

 

[NickXX]

Happy to be educated on why using that phrase causes you an issue

Having an asset registered in my name where its market value exceeds the liability associated with it is beneficial. I will then continue to make consistent, monthly payments that continue to either keep that ratio consistent or favourable. Better?

Exactly - let some other mug pay your depreciation for you.

 

[wingman]

I have no interest in making owning a particular car more expensive than it needs to be, i also have no interest in running around in an appreciating classic.

I typically keep my cars for the longer term and like the get to know something.

Me neither it's just, in my situation, it "needs to be" that much more expensive for me to "own" it. I don't pay anymore than I'm happy with.

 

[Journey]

Why do people say this? I know it sounds really intelligent and financially astute but letting someone else own an expensive depreciating asset and then paying them for the depreciation isn't really much different is it.

This. Everyday.

The only reason I can see people doing this is that their cash can earn them more invested elsewhere beating the % rate of finance.

If you take a PCH that is costing less than depreciation, like the Merc I have on PCH with a cost of £44.5k, and payments of only £361.xx pm with an upfront of just under £2.2k, then it makes no sense to own the car, and yes putting almost 40k in to a vehicle that is dropping in value is nuts. That 42k left over after the upfront payment has been sat and earning me money at an average of 6.1% for the past tww years, although I expect it to drop to an average of 4.8% next year, so compounded that makes £6.3k of gains alone, take the total cost of leasing into account, and minus the interest made and I've had a brand new car for £8500 over three years, and zero hassle.

So far two year in total spend is £10,830 (including up front payment) minus £5,280 (profit from the 42k), so total cost is £5.5k for 24 months, and the monthly cost is £231, and the car is probably worth about £27-28k and that's being generous.

Now, tell me again why you'd take a big loan for a car or pay upfront, makes no sense to me.

 

[[TW]Fox]

Happy to be educated on why using that phrase causes you an issue

Because it's just plain wrong - you are not 'beating depreciating'. You've got a car, it loses value. It loses the same value whether you've bought it for £20k and trade it for £10k 4 years later or whether you PCP it, pay £x a month and then hand it back - its still depreciating and the cost of having it on PCP is still a product of that depreciation!

Having an asset registered in my name where its market value exceeds the liability associated with it is beneficial.

I quite agree.

 

[[TW]Fox]

If you take a PCH that is costing less than depreciation, like the Merc I have on PCH with a cost of £44.5k, and payments of only £361.xx pm with an upfront of just under £2.2k, then it makes no sense to own the car, and yes putting almost 40k in to a vehicle that is dropping in value is nuts. That 42k left over after the upfront payment has been sat and earning me money at an average of 6.1% for the past tww years, although I expect it to drop to an average of 4.8% next year, so compounded that makes £6.3k of gains alone, take the total cost of leasing into account, and minus the interest made and I've had a brand new car for £8500 over three years, and zero hassle.

Deals where the cost over 3 years is truly less than the depreciation are exceptionally rare. They do exist, and always get rolled out in threads like this, but they are rare. Cars lose money - it doesn't matter who owns them, a car loses value as it ages and wears. Lease companies are not charities, they are buying a car, leasing it to you and selling it at the end of the lease - to make a profit they must ensure that the money they take from you exceeds the likely depreciation of the vehicle.

Occasionally there are deals supported by manufacturers, for example to increase availability of used stock, but these are the exception rather than the rule.

 

[Mucky_Pup]

Yes, I do now, paid for over 3 years. Ford Focus RS Mk.2.

Motorbike has another year to run and a final payment though.

 

[wingman]

Because it's just plain wrong - you are not 'beating depreciating'. You've got a car, it loses value. It loses the same value whether you've bought it for £20k and trade it for £10k 4 years later or whether you PCP it, pay £x a month and then hand it back - its still depreciating and the cost of having it on PCP is still a product of that depreciation!

We're basically in agreement it's a terminology issue.

My payments are "beating" the depreciation in that (for example) the car is depreciating £250 per month, and I'm paying £300 a month. I don't for one second believe the car isn't depreciating I'm simply ahead of the depreciation curve.

But, you already knew that's what I meant

 

[Housey]

You do not get away with depreciation if you finance a car sadly...

Typically the only way you can win at finance and that is a structure of the marketplace not because you are clever, is leasing a car you can't buy at the same rate. So for example take my Polo GTI hypercar. The dealership bought I believe 200 of them and in doing so got a 33% discount form VAG on those cars. Typically it's maybe 8%, so significant and an opportunity to 'do some deals'. However, VAG stipulated that those cars could not be sold from the forecourt outside a pre-agreed lease deal. I could not walk into VAG and negotiate one of these cars at say 30% discount, that was not open to me, the market structured the deal at a moment in time.

Outside of that you are not getting a 'good deal' on any finance, you are paying for the money and the depreciation is calculated as part of that finance as is the level of risk. Once in a blue moon you might be protected from the depreciation because they get the front end maths wrong, but that is rare.

 

[ahenners]

We're basically in agreement it's a terminology issue.

My payments are "beating" the depreciation in that (for example) the car is depreciating £250 per month, and I'm paying £300 a month. I don't for one second believe the car isn't depreciating I'm simply ahead of the depreciation curve.

But, you already knew that's what I meant

Your payments are more than the depreciation per month, but you are beating the depreciation? What am I missing here?

 

[Journey]

Deals where the cost over 3 years is truly less than the depreciation are exceptionally rare. They do exist, and always get rolled out in threads like this, but they are rare. Cars lose money - it doesn't matter who owns them, a car loses value as it ages and wears. Lease companies are not charities, they are buying a car, leasing it to you and selling it at the end of the lease - to make a profit they must ensure that the money they take from you exceeds the likely depreciation of the vehicle.

Occasionally there are deals supported by manufacturers, for example to increase availability of used stock, but these are the exception rather than the rule.

Way to ignore the fact that the huge gains onn my saving alone hugely outweigh buying it or financing it, but typically you only read and respond to the bits you want to.

 

[SDK^]

If the **** totally hit the fan i still own 65+k's worth of cars, the other person has his rentals repossessed, i have no intention of paying to keep another company in business through creaming money off me which is above and beyond the depreciation of the vehicle.

If it does hit the fan then you have £65k + tied up in cars where as the financed car people might lose their cars but have the ‘£65k’ in the bank to keep living for a while

 

[[TW]Fox]

Way to ignore the fact that the huge gains onn my saving alone hugely outweigh buying it or financing it, but typically you only read and respond to the bits you want to.

Whether you can get 6% on your savings is a whole other debate. You have to admit you're very much the outlier if you are getting an easy 6% risk free on savings.

 

[Firestar_3x]

If it does hit the fan then you have £65k + tied up in cars where as the financed car people might lose their cars but have the ‘£65k’ in the bank to keep living for a while

That would depend on what they have done with the money, i could put it into my pension over the period of two years and have no access to it.

 

[[TW]Fox]

If it does hit the fan then you have £65k + tied up in cars where as the financed car people might lose their cars but have the ‘£65k’ in the bank to keep living for a while

Given that the residuals built into the finance are trade values you can use the same method to bail out of an owned car - just throw it at WBAC.

 

[Glanza]

Every car I've owned I've owned outright.