Whats is wrong with saving for a car.

[TitanTim]

If buying a new or nearly new car I think you sometimes have to weigh up whether if paying by cash you're getting a good deal, with dealers these days the cash is king saying has long gone. Normally with PCPs and depending on how desperate a dealer is to shift stock or secure built slots cars can be heavily discounted and PCPs can have a low or even a 0% APR. Factor this in you might end up with a better car on finance with a heavy discount that works out cheaper than paying cash upfront on a new or especially neally new car depending on its depreciation. I think on my M140i I got 7k off list and I think it was almost 8k off the Z4, timing the sale at the end of a dealers quarterly sales can also work in your favour. Generally generous discounts are less likely if paying fully with cash.

Lots of factors to consider on cash against a good finance deal.

Tim.

 

[buzyg]

I've never bought a car newer than 10yrs old, so always paid in cash. Also never borrowed any money apart from mortgages & student loan, and can't see myself doing so in future either. I do own a few 'nice things', but always had to wait until I could afford to buy them outright. I guess it's partly down to an upbringing by my Scot father

Must be a Scots father thing. I buy mine cash, same as my dad did and my daughter, who’s at uni and works two jobs, bought her 16 plate Seat Ibiza cash at the start of the year

Well there is a 1/4 Scots blood in these veins.

It's hard not too compare yourselves with the neighbours some times. Next door, bought a nice 118d new when I bought my MR. They will have paid similar money for it at the time. They now have three Audi A1's Mum dad and daughter, cars all financed. They obviously like them but how much money is that down the pan.

Our daughter has been back living at home with us the past two years after a break up. Just bought her second house. She still runs around in a 2003 1.1 ltr fiesta, but dreams of owning a purple Lambo one day.

Guess if your dream car is an A1 then borrowing the money makes sense.

 

[brillomaster]

so far i've only ever bought cars i've saved for. though, the newest car i've bought so far was 10 years old, so never spent more than £9000 on a car. i wouldnt be averse to taking out a bank loan to buy a car though, interest rates are so cheap, its basically get the thing you want now, and then save for it later.

the other thing for me is, i'd never buy a new car, seems ludicrous to lose so much money on depreciation, when a 5-10 year old car can be just as good as a brand new one, for a fraction of the price. I mean, the list price of the car i want next (BMW 435d) is pushing £45k, whereas get that same model thats 5 years old and that drops to £15k. another 5 years older (so now looking at a 335d) and its halved again.

 

[Crazy Harry]

I would always have steered clear of a PCP until I read this thread - took a bit of finding!

https://z4-forum.com/forum/viewtopic.php?f=5&t=111243&p=1606657&hilit=pcp#p1606657

however the key thing is you have to be able to afford it. Your NEW dream car which you intend to keep FAR BEYOND the life of the pcp could be cheaper if you can get the dealer to discount on finance or list price. BUT. You have to be able to afford it anyway. Sadly most pcps tend to be used to have it now - not later (something my parents told me never to do! - get a little saved for a rainy day / get a bit of wool on ya back first). The greatest con is presenting the cost per month - like a phone or TV contract rather than the total amount.

 

[john-e89]

I would always have steered clear of a PCP until I read this thread - took a bit of finding!

https://z4-forum.com/forum/viewtopic.php?f=5&t=111243&p=1606657&hilit=pcp#p1606657

however the key thing is you have to be able to afford it. Your NEW dream car which you intend to keep FAR BEYOND the life of the pcp could be cheaper if you can get the dealer to discount on finance or list price. BUT. You have to be able to afford it anyway. Sadly most pcps tend to be used to have it now - not later (something my parents told me never to do! - get a little saved for a rainy day / get a bit of wool on ya back first). The greatest con is presenting the cost per month - like a phone or TV contract rather than the total amount.

Nail and head there Harry, it’s very true dealers get a lot of business from wide eyed customers looking at a shiny new car in a swanky showroom and once hear how much a month they can get it for the total cost figure along with the final balloon payment gets lost in the ‘it’s 3, 4 or 5 years down the road so forget it’ ether, I just want that car right there.....kinda understandable but ultimately costly unless as you say you can afford the full amount at term end.

 

[TitanTim]

Of course there's always the live for the moment, so long as you can afford any monthly payments on finance/loans then I would say go for it. You could spend years saving for this and that and the drop down dead just as you reach that goal. I also don't get the I would never splash out on a new car, oh the depreciation etc, true but then do you apply that philosophy to everything you buy in life? Second hand clothes maybe? I kinda feel sorry if you feel that way in life but then each and to their own and people have different priorities where money is concerned. I think so long as you can afford things in life then finance/loans to help you along the way I don't see the issue.

Tim.

 

[jonnya93]

I'm 26 and have always payed cash for my cars. I always laugh when I see a youngster driving a new car and they fill up their car with £10 or £20 of petrol. Just doesn't make sense in my eyes.

A lot get a new job and need a nice car to go with it. The only way to afford one is through finance

 

[IRD]

We have a separate car bank account. When one car is purchased we begin saving for the next one. Works well for us. But everyone is different and circumstances vary so much. It does depend on priorities and what you can afford.

 

[ronk]

There’s probably no single one correct answer!

Both of my cars were bought new and yes they have lost half and more of their value but it’s a nice feeling getting into a brand spanking new car.

Yes it’s a complete and utter waste of money but what’s money for?
If I had bought my cars on pcp I would have had the same depreciation costs but have paid 6% interest for the privilege.
I like to put my “payments” into my car slush fund account and under normal circumstances get a little interest paid to me.

The financial bod we use say that there is no point as there is a pot of rainy day money available and income exceeds outgoing.

Hence my opening line - No correct answer!

 

[scootr]

We have a separate car bank account. When one car is purchased we begin saving for the next one. Works well for us. But everyone is different and circumstances vary so much. It does depend on priorities and what you can afford.

I like this idea of a separate car savings account
That way the money is set aside for a specific purchase not lumped in the general fund where the wife thinks it is new carpet & appliance money. :roll:

 

[Z4M-2006]

I try and buy shrewdly,then use the car for 8-12 months and sometimes they make money,sometimes they lose and sometimes its free motoring.

I would never buy new,i cant see the sense in that at all... Never had PCP but did have a loan for a BMW in my 20's.... That was enough to teach me that i wouldnt do it again.

I have done ok with the buy,polish,drive,sell ethos and now effectively drive a £30k car that others have contributed £20k to... I will live with that.

 

[IRD]

We have a separate car bank account. When one car is purchased we begin saving for the next one. Works well for us. But everyone is different and circumstances vary so much. It does depend on priorities and what you can afford.

You are absolutely correct. That is what used to happen to us so we set up a separate account for the car. We put enough in it each month to change the car every two years or so. Sometimes if we have a little extra cash I will pop that into the car account too. Then at change time it gives us a little more flexibility to choose something a bit more expensive. Mind you looking back to the time when I had a young family I would never have been able to do things the way we do now. Money was tight. Getting older does have some benefits.

I like this idea of a separate car savings account
That way the money is set aside for a specific purchase not lumped in the general fund where the wife thinks it is new carpet & appliance money. :roll:

 

[ColinBR]

Young family,and a house that I have spent 5 years doing up from back to the bricks has soon deminished my savings.

So when it came to getting a decent car again I went PCP.

Though wish I hadnt as I now know that I no longer like newer cars. Just no feel to them and I'm going to be handing it back after 2 years is up.

So decided I'll go with a Z4 coupe 3.0 or Z4m for the weekend and a cheap to run commuter that I will pay with saving whilst waiting for the 2 years to be up.

It all comes down to circumstances.

 

[scootr]

Looks like we loose
The average American has $8,863 ( equal to £7,039) in the bank.
The average Brit has £9,633.30 in the bank.
Of course none of this counts the piles of money you old Pensioners have stuffed in the mattress and buried in the garden :evil:

 

[Mr Tidy]

I find that surprising scootr, apart from my part-time semi-retired motor trader mate most people I know live on overdrafts and credit cards!

Oh to be an average Brit. :rofl:

Maybe I need to dig the garden tomorrow, just in case. :lol:

 

[Z4M-2006]

Looks like we loose
The average American has $8,863 ( equal to £7,039) in the bank.
The average Brit has £9,633.30 in the bank.
Of course none of this counts the piles of money you old Pensioners have stuffed in the mattress and buried in the garden :evil:

Surprising this

How much is an average

Salary
Home
Fuel
Tax

That will take some looking up

 

[Argyll Andy]

I find that surprising scootr, apart from my part-time semi-retired motor trader mate most people I know live on overdrafts and credit cards!

Oh to be an average Brit. :rofl:

Maybe I need to dig the garden tomorrow, just in case. :lol:

Save your back and energy and leave the spade where it is.

You’ve an ex Mrs Tidy just like I’ve an ex Mrs. If she’s anything like mine she’ll have pissed off with anything of value including the money buried in the back garden :rofl: :rofl:

 

[scootr]

My Mrs spends it fast as she can get her hands on it with dog and horse shows - 2 years ago I gave half the price so she could go buy a nice car. Well she came home with a cheap car and a horse
Me thinks I'll be hiding money for the rest of my days if I want me toys - darn the Mrs anyway

 

[sars]

It’s good that we are all different, society needs to have both savers and debtors, for me I’d rather have money doing something for me, interest or dividends than tied up in a car that depreciates (unless it’s a classic that will appreciate in value).

When I went to talk figures on the Z4 M40i, the guy doing the figures displayed that months new car sales figures, of which 99% was financed.

 

[Nictrix]

I find that surprising scootr, apart from my part-time semi-retired motor trader mate most people I know live on overdrafts and credit cards!

Oh to be an average Brit. :rofl:

Maybe I need to dig the garden tomorrow, just in case. :lol:

Its only surprising if you look at people you know. Start taking millionaires into account and they offset hundreds or thousands of people with no savings at all.
Its the same with the average UK salary its somewhere in the region of £35k a year. Most people I know dont earn anywhere near that so the high earners obviously offset the low.