My car 50% cash 50% credit union loan and new md321h on 0% finance with cdf

 

And now You have no live and no car
Whats lovely with subaru, its ok but it is not a spacecraft

 

did you save the £500 for your shed?
im sure you have to be a u.k. citizen for finance anyway

 

my next question to you and others who say... if you can't afford it etc.

what about buying a house?

 

Paid for mine with barra job money the missus doesn't know about ��

 

Having only been married a week when I made my mind up to go and get a hatch sti money was a bit tight so finance was one of the only ways to jump strait into one ,,,, iv never been able to save as somthing always comes up that I want first so the money pot gets raided ,,, iv never wanted to buy a new car really but I'd happily walk into a dealers tomorrow and buy a brand new one as I wouldn't loose on it as I'd never sell the thing lol

 

A house is an appreciating asset that costs as much if not less than renting to buy, buying a house in your own name is just cutting out the middle man and getting a return on your expenditure, also everyone NEEDS to live somewhere.

A car is a depreciating asset, one only NEEDS to get from point A to point B the manner in which one chooses to do so is always going to be subjective, as is the ability to Afford it.

I'm not knocking people that do it as it's their choice, I'm just not comfortable with it and would rather spend my money elsewhere, I can also have just as much fun in a £4k Subaru as I can in a £40k Subaru, I just won't be going quite as fast, which is not a bad thing.

I also think it's different when your younger and relatively care free, also the value one associates with car ownership. It's fair to say we're all pretty into our cars, some are prepared to pay more than others to experience something they feel is worthwhile, personally I'm not but I started out driving Austin Maxi's and Triumph Toledo's so a WRX wagon is a kin to a Bugatti Veyron compared to the stuff I grew up with.

 

Outright, just under 11k. Took some saving but I'm proud to say it's mine!

 

Leasing (private) is an over/incorrectly used word imo. There are not that many "true" leasing deals available to the public (in fact I'm not aware of any across the manufacturers at present). Leasing is pretty common in the business sector though.

Do you mean proper leasing or are you including things like PCP in that? If you are then PCP is just another way to finance, where you can should you wish, buy the car outright at the end of the agreement.

 

I'm talking about the people who spend four, five, six or even up to nine hundred pounds per month (the chap on here with the M4 springs to mind) and then after three years hand the car back. That to me is just rediculous !!!! All that money gone and you walk away with absolutely nothing, just so you can look like something your not by having a 14 plate car on the drive.
The guy with the M4 will pay over 30k just for the privilege of driving a new M4 for a few years, and funnier still, he can only use it for a few thousand miles a year.....
30k and you can't use it as much as you'd like because if you do you'll need to get a personal loan to pay the penalties...lol

 

Bought my classic in 2003 for cash.

Had HP on several cars when I was in my teens/early twenties, it was shockingly painful seeing the total money I actually paid back on crappy cars that were worth several grand less than I had paid by the time I came to sell!

 

IMO borrowing money to purchase a car only makes sense when you actually have the funds to pay cash, not to get you a car you can't afford.

I have in the past financed cars through my business, it wasn't that we didn't have the cash to pay outright, it just made sense to keep the cash available to buy stock etc.

Nowadays I get far more enjoyment buying something that is a few years old and has already taken a massive hit, I have no desire to own the latest model. Plus if I don't like the car I have bought, I can move it on and get something else with minimal loss.

 

Andaru & MattyB1983,
I think you're judging people by what makes sense from your perspective, as opposed to what people can physically and genuinely afford.

There are plenty of people that can afford the monthly payment as a disposable income, writing the cost off.

Now, you may deem that as being absolutely crazy, but if one has the income to support that "loaning" of a vehicle than I'm not sure what the problem is.

My opinion is simple. I have absolutely no issue with people who finance or rent something. As long as they live within their means in totality.

It's the same with houses.... there are plenty of people that I know, who have nice flash houses, but in reality they can't afford the mortgage. But it's "OK" with most because it's a house.

What I'm getting across is that some people will think, "So what, I can afford the payments no problem. So what if I don't own the vehicle at the end.". That is the key part imo.

A lot of people are on good incomes and they want to benefit from those incomes.

On the flip side I fully understand there are people that "live on the line", for which these kinds of deals, I would agree, are asking for trouble. However, don't think we're all the same.... because we're not.

It's the same old thing..... the value I place on a £1k, maybe the same as what you value £100 as. That maybe totally dictated by how much disposable income one has, and that's life.

My old Spec C had around £50k wanged into it (inc the purchase cost of the car). I got no where near that when I sold it. So am I mug, or could it be that I could afford to lose that money and was happy doing so..... after-all, it was my money.

 

Until they lose their job.

 

My wife works for the NHS and she said they a car lease scheme where you paid the amount a month you want... say £300pm
Pick the car you want in the price range.
Servicing is included along with the Tax and
Insurance. Tyres.

After three years you had it back and start all over again. Or buy the car.


It seems a no brainer as by the time you put a deposit on a new car and do monthly payments what you loose on depreciation on the new car is only like what youll have paid out on the lease monthly payments.
And that includes all the other stuff you don't need to pay.




She will have to look into it for her next car. ;-)

 

If I lost (not due to misconduct obviously) my job I'd get £29k tax free.

This whole subject is not black and white. It goes on the individual circumstances. You can't take the bad side (assumed) of finance scenarios and assume that we're all in the same boat...... it simply is not the case.

The real question should be about available monthly income to service any additional financing, and I mean AVAILABLE not disposable. I.E. what is left after you pay for your existing lifestyle. Money that you could literally "lose" and it would not impact your ability to sustain your legal lifestyle.

So....

If my amount of money I had per annum, that I could literally throw away, amounted to £20k and I was looking to finance a car at £500 per month..... are you telling me I couldn't afford it?

 

I agree, everybody's circumstances are different and it's up to the individual what they do.

But IMO if you are relying on future income to pay for something you have already bought then you can't afford it.

Personally I waste far more than £500 a month on eating out, wine, cinema etc etc but the difference is I'm spending money I've already earned. If for any reason I find my self without that spare money in the future I can simply stop spending, that is not possible if you have committed to a 5 year finance agreement.

Mortgages aside, HP, credit cards etc are only useful to people that don't need them.

 

Never use credit cards unless you have 0% for 18 months+

 

But at the end of the day if you can't pay it back they will either take the car back or you can sell it to pay money back, so nothing lost, maybe abit of bad credit if they take it back.

 

Assuming the car is worth what you owe..

Then of course you are likely to kiss goodbye to a mortgage, credit card, loan, mobile phone contract etc for the next six years.

You can do a voluntary termination if you have paid back at least 50 % of the total amount, there is no penalty for that.

 

pflowers,
I can understand your perspective on the "if you can't pay for it now, you can't afford it".

You can quite easily commit to a 3, 4 or 5yr car finance scheme, without causing yourself potential hardship if the brown stuff hits the fan. You can just as much finance responsibly as you can irresponsibly.

Just because you have no finance owing, doesn't mean you'd be better off than somebody that does have finance, if the worse case scenario manifested itself.

I can't underline the fact that this is all about personal circumstance and boils down to being responsible or irresponsible.

 

This.......

 

No you don't - I've had finance on several cars in the past.

 

To Shaun's point - it kind of depends.

I've bought three new cars over the years, and 2 had finance and the last one I paid outright, and actually I regretted paying outright. The reason for this is that if you take a big chunk of money out of your savings, you basically put yourself in a much worse position SHORT TERM, than you would if you had the car on finance.

E.g. say you bought a 20k car. In scenario one, you buy it on finance and you end up paying say 500 quid a month. In scenario two, you buy it outright, depleting say 66% of your savings.


If you were to keep your car for 10 years, say, then obviously in scenario 2, you're better off by anything up to 1-2k, if you just consider the interest payments.

However, the 1-2k saving carries the following "costs":

1. You're in much worse position if you lose your job or can't earn money for some other reason, because you've depleted your savings (and 20k would probably last the average person at least 6 months of mortgage payments etc etc)

2. There's an opportunity cost, in that you wouldn't be making any return on the 20k you've taken out of your savings (or other investments, whatever they might be).


It's up to you to decide which scenario is better for you, i.e. is it worth the extra risk and opportunity cost to avoid the finance cost, or is it not? I like the security of having a wad in the bank, so I'd usually plump for finance based on that, but some people might think differently.

 

Paid for my hawk sti in cash a couple of years ago from compensation from a serious shoulder injury(so I guess something good come from it) But previous cars which where £10k+ Ive always has bank loans, anything under lets say £6k Ive just saved up and bought it outright!!

Only had finance on 1 car in the past and that was the missus brand new Fiat Punto Put a big deposit down and after a few years past we decided to sell the car and the finance was slightly more then the car was worth!!

 

Henrik,
You read my script!?

Your reasoning has been similar to my experiences in the past.

In 2007 I bought outright, solely financed by the Banco de Shaun, a new model Ford Mondeo. I would probably not do it again, for the same reasons you have stated. In 2013 I bought it's replacement and this time I bought it on an "options" scheme, although I had the cash in "the bank" that would have covered it - we're talking a total of over £40k on both deals here.

The relatively small amount I'm paying on interest is worth it to me, not tying up my own capital.

If I had to clear the finance today, I could do it with no issue and I wouldn't have to sell the car to do it.

You'll be surprised at how many people have the holding and folding, but would rather not spend it in big chunks.

Go to a high end car marque dealership and ask them what % of their sales are on finance, and more importantly on a PCP type deal. The overall demographic of people that go to high end car marque dealerships are shall we say, far from skint.

 

Well I'm kind of the opposite, I had the cash to buy some very fancy motors outright a few years back, several at the same time in fact, but I bought 2 x £6k cars and a £2k van then ploughed the rest back into property and more than doubled the original stake, I'll probably never see that sort of cash again but my boy won't want for anything in his life time if he's smart about it.

It's all about priorities, I don't care what I drive as long as it can put a smile on my face and my £500 Rover 214 can do that, go figure.

 

Who gives a **** spend your money how you please

 

As I said, the only time it makes sense is when you have the readies anyway.

 

TO be completely honest, buying a house has never really been a priority of mine, at the moment I rent a 3 bed semi detached council house on the south coast with me my mrs and the kids, which is big enough for us, my rent is only £68 a week (before anyone says anything, no I don't claim benefits at all, I have my own carpet/upholstery cleaning business) the way I look at it is, if I bought a house I can't take it with me when I die, and if I had a mortgage no doubt it wouldn't be paid of before I die so the family will be left with nothing anyway so **** it, I'm quite happy, we live comfortably and to me that's all that matters.