Best way to pay for an expensive car.

Syla5

Syla5

Syla5

Soldato
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So this past week I have been on a bit of a whim scrolling through autotrader looking at cars to consider for an "on a whim" purchase, in the realms of realistic dream car territory. Completely not needed but from a practicality point of view but would like to own to at least say weve had that experience at least once.

So looking in the region of £40k-£60k range for cars, what's the best way to go about this level of purchase from the money side of things.

Pay in full
Bank loan
Deposit down finance
PCP
HP

Thoughts and feedback from those that have done it would be great.

*edit for clarity all listed options are available to me.
 
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Pay the deposit on a Credit Card for Section 75 protection. The remainder of the balance will be down to what you have in savings and what rate of interest you can get on a loan. I've seen PCP/HP deals from dealers that are 10%+ APR, that's not great when you can get a bank loan for 6%'ish % at the moment.

Unless it's a great price and 0% finance then I usually go bank loan. Some people will take dealer finance to get a discount and then pay it off via other means within 14 days to not pay any interest on the dealer finance and retain the discount.
 
It should be noted it is currently a TERRIBLE time to buy a premium car. Dealers have unsold stock often for months that they paid handsomely for at the beginning of the year that they just cannot shift. Many are refusing to reduce their prices as some will actually be selling at a loss so the cars just sit and sit for months.

OP grab the unofficial AT google chrome extension and you can see historical prices and how long the car has been listed for. If a car has been sitting since before even October absolutely hammer them for a huge discount.
 
Buy in cash if you have it in the bank.

Inflation is depreciating cash quickly, you will pay interest on a loan so you are losing inflation + interest.
The real inflation rate is far higher than the BS CPI so unles you have an investement oppertunity which returns 15%+ then likely cheaper to pay with the cash you have in the bank.

If you buy on any sort of finance , make sure you get decent GAP insurance privately, better cover for chear prices than the dealer will offer.
For this to be effective it needs to be a car loan such as HP, PCP or other finance tied to the car.
If you randomly take an unsecured bank loan and pay for the vehicle in cash with this money then you have no gap cover as the finance is not linked to the vehicle so there is no gap.... you just have an unsecured loan and get paid the trade value of the car.

The price gap be a killer, in the first years. Your £60k car may have a trade value of <35k after 12 months while you still owe >£50k on finance.
If something happens you are left with a big bill, car finance and GAP is a way to manage the risk.
 
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