Probably PCP, most people take them out with no intention of paying the balloon. To be honest most people seem oblivious to the interest and how they actually work just seeing the monthly amount and hoping for some equity to trade up to the new car at the end of term.I see, my sisters both do this and they keep chopping the car in every 2-3 years, they've mainly mentioned PCP when talking about them, but it's possible it was PCH.
My knowledge on this is limited as I've never done it personally, so I can definitely be a little wrong in what I'm saying, even if it's mostly on the right track
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
You should gently propose the idea of financing the balloon. My brother recently said he was offered an ever worsening spec of car at a higher rate (compounded by supply chain issues and finance rates) so even those who typically do not listen, are stating to listen!I see, my sisters both do this and they keep chopping the car in every 2-3 years, they've mainly mentioned PCP when talking about them, but it's possible it was PCH.
My knowledge on this is limited as I've never done it personally, so I can definitely be a little wrong in what I'm saying, even if it's mostly on the right track
It could be they're on PCP but choosing not to use the option to buy.
Caporegime
Oh I can 100% agree with that. Bricks and Mortar first. You can still have relative fun with cheap cars so do not have to go without. I know because my other two cars are bangers but the mortgage is into low 5 figures now
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There are far better things to spend your money on than a car.
Experiences
House
Will provide a far better standard of living than a car. Car comes last. I love cars by the way.
Yeah I used to love my fast cars, I drive a 6yo 1.2 Micra now, so macho! but seriously it basicaly costs nothing to run, bought cash, and I'm averaging about 50mpg.
It does everything I need it to, and I can put the money saved into more intersting lifestyle enhancements, more trips away, eat out at nice restauants more often etc..
Everyone has thier own priorities I guess but i'd rather not be paying x hundred pound a month into a depreciating asset.
I don't have a mortgage luckily, own a modest house and plan to retire by 50.
It does everything I need it to, and I can put the money saved into more intersting lifestyle enhancements, more trips away, eat out at nice restauants more often etc..
Everyone has thier own priorities I guess but i'd rather not be paying x hundred pound a month into a depreciating asset.
I don't have a mortgage luckily, own a modest house and plan to retire by 50.
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Yep. Plus cars have become much more expensive over the years and also the cost of using them.
When I see someone driving a new car, my initial thought is they are broke. If I see someone driving say a 12-15 plate, I think they are far more well off.
Anyone can lease a car. It's not a flex driving a BMW or Mercedes that you don't own, it's actually the opposite.
Love it. My plan is to retire at 55, will be mortgage free at 34 so plenty of time for wealth building
Just don't lose out on compound growth/compound price rises.Love it. My plan is to retire at 55, will be mortgage free at 34 so plenty of time for wealth building
You mean in terms of house prices, I do understand where you're coming from, however if my investments are broadly in line with house price rises, then its fine.
Yes house prices have gone up more than the stock exchange in history, tough to say if we will have the same again.
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House prices + you are starting to save "late" in life. I hadn't read your mortgage free age properly though, so shouldn't take you long to catch-up!
What do you mean starting to save late?
In my view if you have 100k in the bank and 100k mortgage, you have zero.
The key thing is whether you're going to do anything useful with that £100k.
A £100k mortgage and £100k of capital you're using to make significantly more money (lets say by using it to buy more property for flipping/renting/whatever) is a long way from being mortgage free and having £0.
If you'd just leave it sat in a bank account doing absolutely nothing, then yes, you may as well have £0.
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The earlier you start saving, the earlier you start earning interest, the longer compound growth has to work its magic.
Yes but you could always mortgage a property right. Plus the amount I'll be able to save per month without a mortgage will be a lot more. The amount of interest you're paying will always be higher than the amount of interest you could earn on the savings, post tax.
Yes, but the main focus should be clearing your debts then saving (over your typical 3-6 months of expenses). Debts are higher interest so I'll clear those first.
Right now I am earning 3.8% versus my mortgage which is 2.3%; so no.
Yes right now. Not for long.
If you're only thinking in terms of using money for 'saving' and leaving it in savings accounts etc. then yes, it probably makes little difference overall.
Someone with the time and inclination to go and do things with that money, such as the property example, could easily outstrip the interest incurred on a mortgage with the earnings.