Spec my dad a new car - £60,000

Richdog said:
Just out of interest... why do you think that?
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It's poor working capital management. If you buy stock at day 0 and sell it at day 60 then thats 60 days of which you own it, no longer have the money you paid for it, but are making nothing on it.

Whereas if you buy the items on credit with terms of say 60 days net, you can pay for it around about the same time your stock is sold - so in the intervening period the money you'd have used to pay up front is at the bank earning interested or available for use in other projects with a better return.

Most businesses will want to minimise their working capital cycle. Credit is how this works and virtually all B2B transactions are done on credit, and you pay for the invoice at the absolute last possible moment - any sooner is wasted money.
 
[TW]Fox;11037014 said:
It's poor working capital management. If you buy stock at day 0 and sell it at day 60 then thats 60 days of which you own it, no longer have the money you paid for it, but are making nothing on it.

Whereas if you buy the items on credit with terms of say 60 days net, you can pay for it around about the same time your stock is sold - so in the intervening period the money you'd have used to pay up front is at the bank earning interested or available for use in other projects with a better return.

Most businesses will want to minimise their working capital cycle. Credit is how this works and virtually all B2B transactions are done on credit, and you pay for the invoice at the absolute last possible moment - any sooner is wasted money.
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Straight out of a text book :) True to a certain extent and dependant on the items involved.

Back on topic, this thread is ridiculous and its ashame because its becoming more and more common in motors.
 
diesel range rover sport is a ******* child of satan.

get the sport with a 'charger - only way to go...
 
panthro said:
Straight out of a text book :) True to a certain extent and dependant on the items involved.
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but we're talking in overall terms here

You're forgetting this is in reply to the person who says if you buy a car on credit, you cant really afford it and are above yourself

quite.
 
[TW]Fox;11037014 said:
It's poor working capital management. If you buy stock at day 0 and sell it at day 60 then thats 60 days of which you own it, no longer have the money you paid for it, but are making nothing on it.

Whereas if you buy the items on credit with terms of say 60 days net, you can pay for it around about the same time your stock is sold - so in the intervening period the money you'd have used to pay up front is at the bank earning interested or available for use in other projects with a better return.

Most businesses will want to minimise their working capital cycle. Credit is how this works and virtually all B2B transactions are done on credit, and you pay for the invoice at the absolute last possible moment - any sooner is wasted money.
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I assume you're referring to business credit for buying from your supplier which in essence can be interest free, but there's a big diff between that and getting a car on credit is there not?

From a business purchase point of view it makes sense to get the car on credit or even better on lease as it makes forecasting easier. From a personal point of view I actually paid for both our cars in cash, for me simple reason I did this was I didn't want credit to worry about should my money situation(s) change.

Back to the OPs post :) I actually know people like this, a friend of a friend has a 730iL diesel and another a fugly S320 diesel, why? simple answer is cause they can, why diesel? cause fuel is is a cost that they see every day whereas the initial purchases were outright which they've accepted and then forget about.
 
IAmATeaf said:
I assume you're referring to business credit for buying from your supplier which in essence can be interest free, but there's a big diff between that and getting a car on credit is there not?
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There's lots of ways you change juggle money to your advantage. I bought double glazing last year for 2.5k, I had the cash to pay for it upfront. Instead I put the money in an ISA and took out the finance on the windows at 22% interest. After the first month I switched it over to my credit card at 0% for 12 months with a 2.5% handling fee.

I didn't make a lot of money on it but to do it this way I made a little but still got what I wanted. You could do the same for a car purchase with a 2 year interest free finance option for example.
 
[TW]Fox;11036209 said:
So why the aversion to credit? Most of the UK's business runs on credit. It's sensible. Only a fool pays for business items in cash up front.
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So a car is classed as a business item? don't tell me you need to have your car as part of your business because not everybody does, I never said anything about buying business items with cash, Having a car paid in cash is a bill less to pay at the end of the month.
 
cheets64 said:
So a car is classed as a business item? don't tell me you need to have your car as part of your business because not everybody does, I never said anything about buying business items with cash, Having a car paid in cash is a bill less to pay at the end of the month.
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It's also cash wasted of the interest in the loan for the car is less than the opportunity cost associated with the capital you have.

You are under the impression that loan = no. It's not quite that simple.
 
When I buy cars, I prefer to pay it off in one go. Same with insurance, computer games consoles, Tv's etc etc. I hate knowing that I am locked into owing people money.

Saving up the money is the hardest part, but it takes self control and I feel better of it. To be quite honest I can't see myself using a credit card anytime soon, nor will I buy a car which I can't afford financially. I am not a business, but understand why business work with this mentality on a day to day basis.
 
Booner! said:
When I buy cars, I prefer to pay it off in one go. Same with insurance, computer games consoles, Tv's etc etc. I hate knowing that I am locked into owing people money.
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So do I - my preffered way of buying anything I want is not to involve financial companies wishing to make money from lending me things. I also pay for insurance up front, etc and I paid cash for my car.

However..

This does not mean I've blinded myself into think the way I do it is the only way you should. And I'd not be averse to using a loan of some sort in the future when I get a job and decided to buy a proper car.
 
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