Buying a new car - Finance or not?

I had this dilemma earlier in the year when i got my TT.

I took finance to get the free service pack... And it was nice having the money in the account.... However they are way to restrictive with penalties... Changing plates/ remapping/ winter tyres etc.

So imo as interest rates are low just buy outright and not worry about monthly payments.
 
Id bank loan the money with rates so low & look to build your cashpot until it either buys another property or clears mortgage on one you already have
 
pvr said:
Jasey said:
The decision to spend 30 k on a car and use cash really depends on what else you may need the money for (house deposit etc).
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But then you spend the money twice in effect, as you still have committed to spend 30k on the car as well as on the house - so now your debt is 60k.
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Not really - if you get the PCP deal you have only committed to the deposit + the payments for the duration. The balloon payment is guaranteed. If you spend the whole 30k on a car you're at the whim of the market as to when you see the money.

As I said it depends on what you may need the money for as to what you should do.

Whenever I've had 30k sitting around I've never thought it was a good idea to buy a car with it :)

But that's just me :D
 
aquazi said:
I had this dilemma earlier in the year when i got my TT.

I took finance to get the free service pack... And it was nice having the money in the account.... However they are way to restrictive with penalties... Changing plates/ remapping/ winter tyres etc.

So imo as interest rates are low just buy outright and not worry about monthly payments.
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I'm quite lucky im getting the service pack inc as it was initially spec'd by the prev owner. But thinking about it you're right, there are no other perks being offered by the PCP except for:

1) You can hand the car back at the end of the term - Speaking to the wife I had planned to keep it for 5-8 years but its hard to say as I have kept my last 2 main cars for 4 years
2) Pay in monthly installments - Cheaper to do this via the bank, no deposit required and monthly payments are almost the same as the PCP (depending on the deposit). Only downside to the loan via the bank is if you decide to repay it all there would be a settlement fee, but lump sum overpayments are not charged.

The guaranteed future value seems very high to me. They believe that the car will retain 51% of its original OTR value when it is 4 years old or 45% when it is 5 years old.

I have yet to see any car that can do this. Generally I value cars at 42% after 4 years and 35% after 5 years.

Which to me means they are trying to encourage you to hand it back.

All in all I think it comes down to do you want to own the car or do you want to rent it. I would prefer to own it. I dont mind renting it, but if it were at 0-3% it would make more financial sense.
 
For me it depends what the car is and what it will be used for....if it's a daily driver business/commuter car then I'd finance the thing. I feel psychologically it's easier to justify the monthly payments if it's for work/earning money. Dumping £30k into a new car and then knowing it's now worth £25k the moment you drive away feels harder to swallow. However, if you're buying a car (say like a MC or Boxster Spyder) then I'd pay cash all day long, very little depreciation and you might even earn some capital gains!
 
It is more of a daily than an MC (it has 5 doors and seats and will be used for business trips, family trips, weekend driving) but it is being sold in limited numbers so will still hold some value. I predict depreciation to be approx £20k over the next 4 years so about £5k per annum.

My Z4C has lost £1k per annum but that is because I bought it at 5 years old once all its depreciation had flattened out.
 
bluestreak56 said:
It is more of a daily than an MC (it has 5 doors and seats and will be used for business trips, family trips, weekend driving) but it is being sold in limited numbers so will still hold some value. I predict depreciation to be approx £20k over the next 4 years so about £5k per annum.

My Z4C has lost £1k per annum but that is because I bought it at 5 years old once all its depreciation had flattened out.
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What is is :poke: :thumbsup:
 
Jasey said:
bluestreak56 said:
It is more of a daily than an MC (it has 5 doors and seats and will be used for business trips, family trips, weekend driving) but it is being sold in limited numbers so will still hold some value. I predict depreciation to be approx £20k over the next 4 years so about £5k per annum.

My Z4C has lost £1k per annum but that is because I bought it at 5 years old once all its depreciation had flattened out.
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What is is :poke: :thumbsup:
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He's been looking at X4s iirc. Went to see one recently and it was a bit of a dog I think.......well not as it was made out to be for a year old car.
 
Z4M-2006 said:
X4...

Another model I don't get at all..
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Was it bluestreak56 who said it was the best looking car since the E86? Or something along those lines?

I have pictures of the X2 from 2007/2008 ish and the X4 looks just like it. I always fancied one since those pictures but I could have a X3 or be on my way to an X5 for that money.

I think BMW assume residuals will be like the X6..........I think diesel models may soon take a hit for every manufacturer and seen as most X's are sold as that, it could be a disaster for sellers.
 
Are we talking of the same car..?

The X4 is an ugly pug.... Much like the 5 GT..
I think it will be a slow seller, and residuals will follow 5 GT and X3...

Beauty is in the eye of the beholder I guess..
 
Angie4m said:
I think diesel models may soon take a hit for every manufacturer and seen as most X's are sold as that, it could be a disaster for sellers.
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Probably affect some models more than others - as an example, the current model X3 (F25) is only available in the UK as a diesel, so, if they want one, buyers won't have a choice
 
Not a great fan of buying when I haven't got the cash but when we bought the 335 I took some BMW finance at 5.4 % to get a contribution to the cost. It worked out at the time!
It also depends what stage of life your at. You need to ask yourself the question, "do I need to save any money "
 
bluestreak56 said:
Thanks for the comments so far. The rate is high because its an AUC car (1 year old) and so you dont get very good APRs on used cars...
Owning the car is important to me but paying the least outlay is more important. ie I dont want to spend extra money for the sake of saving some money in the bank.
Spending the cash wont wipe me out and as above, I can build it back up again relatively quickly as I have no other outgoings and the bank loan will always be there at the same rate should I need it?
My dad says I should build up a credit rating because I dont have one (never had any kind of loan). My counter is why pay to get a credit rating?

I understand the benefit of having the PCP to be able to just hand the car back at the end but to me it seems too expensive..
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Once you have the figures you will be able to do the sums!
I still cannot get my head around pcp deals. I would rather buy it and pay myself back on a regular basis.
Pcp has the depreciation costs built into the monthly payments - do you really want to add interst to that as well?
 
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