Debt

Solaris said:
What are peoples feelings on getting a car on finance? Bad debt?
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A mass market depreciating car which simply does a job another for half the money would do easily as well? Bad.

A car you really like, that doesn't depreciate heavily, with a reasonable deposit, which you couldn't just as easily get for loads less? Good.
 
[TW]Fox;10626521 said:
A mass market depreciating car which simply does a job another for half the money would do easily as well? Bad.

A car you really like, that doesn't depreciate heavily, with a reasonable deposit, which you couldn't just as easily get for loads less? Good.
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Aren't cars always a bad investment?

You always get bored of them eventually, they always depreciate, and a vw golf will do exactly the same job as a mercedes....get you from a to b....
 
Solaris said:
Aren't cars always a bad investment?

You always get bored of them eventually, they always depreciate, and a vw golf will do exactly the same job as a mercedes....get you from a to b....
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Agreed with the former.

But anything can be applied to your example. A 1990 Amstrad will let you type and play games, so why have a 2007 pc?
 
Solaris said:
Aren't cars always a bad investment?

You always get bored of them eventually, they always depreciate, and a vw golf will do exactly the same job as a mercedes....get you from a to b....
Click to expand...

I don't know what kind of car you're interested in, but If I'm going to get a car on finance it'll be something I really want and when I'm comfortable in a job after I've completed my degree (25yrs old, decent wage - I'll have an R32 please). Until then I'll buy a car when I have the cash in my bank that will make do - cheap to insure - I'll probably get bored of too - but I wont be paying for it over the next couple of years. Something like a cheap diesel A3.
 
I dont see debt as bad, I currently have a loan ( 3 payments left wooo!) and credit card (£600 to pay off) which are both easily manageable for me.
The only time I see debt as bad is if you go around spending on cards and useing loans willy nilly until you cant afford the repayments.
 
Sic said:
a 1990 amstrad can't play the games that a 2007 pc can. it's not the same.
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Exactly. An old 1990 car can still drive along the same roads as a 57 plate.

Cars should never be considered an investment in and of themselves. They lose value the second you take ownership of them. They should only be considered an investment if they will allow you to earn more money through using them, for example ditching your old broken 1 litre banger for a newish 2 litre diesel saloon can open doors in industries where you'll be on the road a lot.

Having said that for most jobs of this type you will have access to company cars, which are pretty much the holy grail if you really must have that 'new car smell'. Nothing like having a brand new car that only costs £50/month for everything but fuel.
 
I'm 20, I probably owe around 2k on credit cards, I have a 5k business overdraft and a car on finance and it doesnt bother me in the slightest, debt is only bad if you cant afford to pay it off and having debt teaches me a lot about financial management, if i didnt have things like my business overdraft I wouldnt be able to earn as much as do now, its impossible for me to run my business without some sort of credit facility.
 
mp3kla said:
I don't know what kind of car you're interested in, but If I'm going to get a car on finance it'll be something I really want and when I'm comfortable in a job after I've completed my degree (25yrs old, decent wage - I'll have an R32 please). Until then I'll buy a car when I have the cash in my bank that will make do - cheap to insure - I'll probably get bored of too - but I wont be paying for it over the next couple of years. Something like a cheap diesel A3.
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Yeah. I mean I'm 20, in a stable job, been here 2 years now. And looking to get a audi a3 s-line on finance.

And a steam car would be slower and less reliable......top gear proves how rubbish old cars can be......by filling them with water?
 
The only debt i have is mortgage and car loan (first ever car loan), i've been in no other kind of debt (didn't take out a student loan, just worked hard and crashed around).

I don't have any credit cards bar my business card which is only authorised for use in america and kept by the company unless I have to fly out.
 
Debt isn't a problem if you can manage your finances, there is little difference between paying a credit charge to get something now, and saving for the same length of time to buy the same thing, with the exception of when you actually get the goods.

The problems come when people use more credit than they can sensibly afford to pay back, don't control themselves and treat it as simply free money, because it isn't.

There is no reason to be afraid of credit provided you're sensible about it.
 
Manageable debt is a good thing. It teaches you to properly take control of your finances and more importantly gives you a credit rating. Through having had credit your are demonstrating your level of risk to potential creditors, thus allowing future credit to be at a lower rate.

Unmanageable debt can be very bad, it it stressful and can get you in all sorts of bother.

However, it is generally agreed that for future lendings, banks find that no credit rating is often worse then a bad credit rating, as you are simply an unknown risk.

Burnsy
 
I've between £5k - £10k of credit card bills every month but it's actually good because of 1% cashback :p
Car financing is good if you want to get something that's currently out of your reach but you know you can afford. It's just that in 2 years time you're paying the same amount for something that has since dropped by £1000's in value, but on the plus side, if it wasn't for the financing you wouldn't have such a nice car to lose money on in the first place :) I did a quick check on one website there and for 2 years at £710 a month I could have financed my car at only £1040 more than the original cost price which is very good.

Businesses that are in debt is different obviously because managing the cashflow is more important. It's almost good to be owing money because you yourself are almost certainly going to be owed money too.

If you can avoid any other debt like personal/student loans etc, imho you're better off, but usually you've taken a loan because there's no other option.
(A couple of my friends left uni in £35,000+ of debt, or so they tell me anyway. I don't know how that is even allowed :eek:)
 
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