Erm.. who said it was risk free? Of course there is risk, hence why my 3 year estimate is 4.8% total, I guess you just buy everything cash and have no savings and live in a rented house?
Poll: Do you actually own your car?
- Thread starter /\ndy
- Start date
Erm.. who said it was risk free? Of course there is risk, hence why my 3 year estimate is 4.8% total, I guess you just buy everything cash and have no savings and live in a rented house?
Soldato
- Joined
- 24 Mar 2011
- Posts
- 6,479
- Location
- Kent
Own both of my vehicles completely, both paid for by saving up. £10k's worth split across the bike and car.
Soldato
- Joined
- 11 Aug 2012
- Posts
- 4,550
- Location
- Wales
Yes for two of my cars, my 04 Z4 3.0i and 09 2.4 Honda Accord, both bank loans Z4 paid off years ago.
Parents have taken out a lease last year on the new shape 0.9T Nissan Micra (Very nice little car btw).
Parents have taken out a lease last year on the new shape 0.9T Nissan Micra (Very nice little car btw).
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Of course not - I have in the past used dealer finance, bank loans and cash to buy cars.
I have absolutely nothing against the idea of finance for a car. It often fits really well. It's just the 'beat depreciation when I look at the list price rather than the actual price' and 'leverage investment synergies' stuff that gets trotted out that gets frustrating.
He doesn't mean 'beating depreciation' the way most people do.
He's talking about ensuring his equity position remains favourable by paying off more (beating) than it depreciates.
What most people mean is that they think they're somehow getting away with paying less than depreciation would cost them, which is rare outside of special deals.
Put it this way, if I were paying £200 a month on a car depreciating by £400 per month, I'd hardly label that as "beating depreciation". Would you?
It's the pedantry of the nomenclature that people are fixated on in this thread. Nobody is saying that depreciation isn't a real thing.
On the contrary there are a number of people, generally and perhaps in this thread, who do think that finance means you can avoid depreciation. The way you were putting your point made you look like one of these people, though as you've not clarified that isn't what you meant. You're just ensuring you've always got equity, which is really sensible.
This is exactly what I meant.
I admit the phrase isn't ideal but hopefully it was clear that my meaning wasn't that I'd somehow magically made depreciation disappear!
It is a struggle to justify buying a lot of the vehicles I've been looking at new when 10-18 month old ones with low mileage are almost half the new price :s
Unfortunately you'll find that's what most people mean by the phrase.This is exactly what I meant.
I admit the phrase isn't ideal but hopefully it was clear that my meaning wasn't that I'd somehow magically made depreciation disappear!
"I'm only paying £300 a month on the lease and it would have depreciated £20,000 if I'd paid list price in cash, I've beaten the depreciation "
Colour me surprised! I genuinely didn't think people thought this was what the phrase could be construed as.
Yes but someone is paying for that. Leases etc. aren't run as charities. Unless manufacturers are subsidising deals, it's unlikely any one purchase method, be it outright purchase, PCP, HP, lease, whatever will significantly outperform another.
Perhaps for normal joe cars, but right now some people with really expensive stuff can't get out of them because even dealers who sold them it new 6 months ago won't take them into stock or even bid on them and you can be sure a WBAC would not go close to it. To my thread about car prices the market is in free fall at the moment and with 349 McLarens for sale on Pistonheads, it's not surprising. Oversupply is great for the new buyer, but come resale then BOOM. At least on a 3 year PCP you can give it back, if you own it, you are roger'd with a big roger.
That makes more sense
Assuming both figures are averaged over the ownership period (i.e. factoring in any deposit) Then yes, that sounds like beating depreciation. It's clearly a cheaper TCO to finance/lease and hand back than buy cash outright and sell. I know your example is hypothetical but as pointed out this sort of scenario is quite rare.
Fair enough, but people who don't shop around and have the 'need it now attitude' are the ones who get stung by dealers and lease companies alike. Shopping for a new vehicle ahead of the curve, and taking an excellent deal even when the timing isn't ideal can cost less than waiting, or over spending on a current arrangement. When costing this vehicle up the best I could get off was 4.4K, which was a naff deal, and taking deal finance at a high % didn't really float my boat just to get another £2k contribution. I may be the outlier, but many more people could be outliers if they bothered to shop around, and utilise more data in their daily lives. Make your money work for you, don't work for your money, right?
I don't even know the first thing about the supercar market, my first love is tedious saloon cars
Permabanned
- Joined
- 13 Apr 2017
- Posts
- 969
- Location
- scotland
Own outright, always have.
This is the point where the "know all, know **** alls" will jab you in the chest at the sheer folly of renting a flat [ waste of money ] while
extolling the virtues [ excellent use of money ] of renting/leasing a car.
This is the point where the "know all, know **** alls" will jab you in the chest at the sheer folly of renting a flat [ waste of money ] while
extolling the virtues [ excellent use of money ] of renting/leasing a car.
Last edited by a moderator:
On a lease that would make sense, on a PCP/HP it very much would not.
With a small deposit on a PCP you're normally well into the third year before you're in positive equity, even then... I can only speculate that most people finance their new cars in this manner.
My mum was stuck in Paignton with a broken train, I was going to ask if you could use your diesel tax to bring her to my house. You could then have a go in my R8 whilst I created a YouTube called 'Fox in a Supercar...(well OK it's not a supercar if you drive a 5K Ford/Vauxhall and call your mates blue). I think it would get hits.I don't even know the first thing about the supercar market, my first love is tedious saloon cars
Soldato
- Joined
- 18 Oct 2002
- Posts
- 2,612
- Location
- Florida/UK
Wild, sweeping assumptions really don’t help you make a point. It’s entirely possible to pay cash for everything, have lots of savings and own your home mortgage free.
Does using someone else’s money to buy things, and keeping money in the bank make sense? Of course, but try to be at least a little open minded.
Personally, I always put down 20-30% on cars to make sure they’re always positive. I financed the GT4 at 1.9%, and make 9-13% on the invested money. The GT4 is also worth more than I paid for it new, so win/win there. My 812 is the same story. Only the wife’s Golf R is likely to potentially sting me a little due to her doing 40k miles a year in it. However, the interest over 4 years may offset that anyway.