Car finance
24 November 2010, 06:41 PM
#31
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I get what you are saying about spending on the never never but sometimes you just need to sit down and do the maths
I have done the maths - paying no interest and rental charges = cheaper than paying them plus you own the car. So can flog it if needed. No ties.
Your depreciation figure is also plucked out of the air - what if you do super low mileage?
I can guarantee that you have left some charges/penalty clauses out of your lease costs just like you did above. You are too easily fooled by smart **** finance companies. They are there to make money. Leasing is renting. So your TTRS will not be yours. It will be your leasing companies. At the end you have no car. The cash buyer has a car to sell on.
Just like buying a house makes more financial sense over the longterm than leasing, 20-25yrs worth of mortgage payments vs 50/60/70yrs worth of rental + inflation and then no appreciating asset when you're 6ft under.
We don't intend to rent forever - we will simply buy an place outright with no mortgage interest payments. For the time being we pay far less than an interest ONLY mortgage on this place in rent and our business gets an extremely cheap and very nice office to boot. Because it's so cheap, we save a decent amount regularly; so far we can buy a smallish house. Soon it will be a big house - possibly this place that we rent. At the same time our little boy (and soon to arrive 2nd kid) get a nice place to grow up and don't suffer because Mummy and Daddy are SOOOO desperate to be on the property ladder. So one size does not fit all.
Your broad sweeping statements smack strongly of yet another brainwashed soul. Yes you are doing well at a young age but open your mind a little to other ideas. It can save you a fortune and make you richer. The housing market will be on it's knees in two years time - I guarantee this. It's about as safe an investment as buying shares in an American Insurance company.
This I have learned from people far, far wealthier than any of us on SN. Even Trout, Zip and John B ;-)
I have done the maths - paying no interest and rental charges = cheaper than paying them plus you own the car. So can flog it if needed. No ties.
Your depreciation figure is also plucked out of the air - what if you do super low mileage?
I can guarantee that you have left some charges/penalty clauses out of your lease costs just like you did above. You are too easily fooled by smart **** finance companies. They are there to make money. Leasing is renting. So your TTRS will not be yours. It will be your leasing companies. At the end you have no car. The cash buyer has a car to sell on.
Just like buying a house makes more financial sense over the longterm than leasing, 20-25yrs worth of mortgage payments vs 50/60/70yrs worth of rental + inflation and then no appreciating asset when you're 6ft under.
We don't intend to rent forever - we will simply buy an place outright with no mortgage interest payments. For the time being we pay far less than an interest ONLY mortgage on this place in rent and our business gets an extremely cheap and very nice office to boot. Because it's so cheap, we save a decent amount regularly; so far we can buy a smallish house. Soon it will be a big house - possibly this place that we rent. At the same time our little boy (and soon to arrive 2nd kid) get a nice place to grow up and don't suffer because Mummy and Daddy are SOOOO desperate to be on the property ladder. So one size does not fit all.
Your broad sweeping statements smack strongly of yet another brainwashed soul. Yes you are doing well at a young age but open your mind a little to other ideas. It can save you a fortune and make you richer. The housing market will be on it's knees in two years time - I guarantee this. It's about as safe an investment as buying shares in an American Insurance company.
This I have learned from people far, far wealthier than any of us on SN. Even Trout, Zip and John B ;-)
On the whole I don't agree with borrowing unless it's to buy an asset, even then I'd rather keep it to a minimum. However Mattee, if Mitchy's numbers are accurate then for the M3 it does indeed seem better to lease than to buy. Even if he is out by only a £k or two then his option is better. I'd rather keep £50k in my pocket if I'm only going to save a £1-2k, you'd get that back in a 100% secure deposit account.
For some people though this can still lead to trouble if they are not disciplined. Buying something with a small deposit and reasonable monthly payments lulls them into a false sense of security. It can encourage some people to buy more stuff on the never never, it's a bit of smoke and mirrors that finance companies rely on to get you to buy more and more stuff.
If you are disciplined, and Mitchys number's are correct and you have £50k in the bank it seems to make sense to lease it.
imho
Last edited by Dingdongler; 24 November 2010 at 06:58 PM.
24 November 2010, 06:48 PM
#32
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24 November 2010, 06:59 PM
#33
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24 November 2010, 07:18 PM
#34
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how many people actually have the cash in the bank (i am sure quite a few financially literate people do including the posters on this thread), but I suspect that the majority don't
i'snt that the central marketing point of lease deals -- to allow people to drive cars they could never afford to buy outright
I bet leasing companies see people with the cash in the bank as nightmare customers, calculating APR's, residuals, depreciation, oportunity cost, and all that stuff
they just want people who can afford the 36 easy of 599.00 and are desperate for a shiny "precious"
24 November 2010, 07:30 PM
#35
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I get what you are saying about spending on the never never but sometimes you just need to sit down and do the maths
I have done the maths - paying no interest and rental charges = cheaper than paying them plus you own the car. So can flog it if needed. No ties.
Your depreciation figure is also plucked out of the air - what if you do super low mileage?
I'm only going from the autotrader prices, granted low mileage cars will fetch a couple thousand more but I never took buyer bartering into the equation to which you can be expected to drop the price a little from advertised.
I can guarantee that you have left some charges/penalty clauses out of your lease costs just like you did above. You are too easily fooled by smart **** finance companies. They are there to make money. Leasing is renting. So your TTRS will not be yours. It will be your leasing companies. At the end you have no car. The cash buyer has a car to sell on.
PCP and leasing are slightly different finance plans, I wont bore with the details but with a lease, the car is the finance companies, and you rent it off of them. It is registered to the finance company and you get free RFL throughout the plan. PCP is different, the car is your own, i.e registered to yourself and you have the option to pay the final settlement in order to buy the car outright at the end of the term. As to other costs, with a PCP/Lease there is usually a £125 administration fee added on top with 1st payment, I think that's about it. As you have said, the cash buyer has a car to sell on, this can be a stressful expensive time, people phoning you up from Nigeria and then tyre kickers and dreamers offering you peanuts.
Just like buying a house makes more financial sense over the longterm than leasing, 20-25yrs worth of mortgage payments vs 50/60/70yrs worth of rental + inflation and then no appreciating asset when you're 6ft under.
We don't intend to rent forever - we will simply buy an place outright with no mortgage interest payments. For the time being we pay far less than an interest ONLY mortgage on this place in rent and our business gets an extremely cheap and very nice office to boot. Because it's so cheap, we save a decent amount regularly; so far we can buy a smallish house. Soon it will be a big house - possibly this place that we rent. At the same time our little boy (and soon to arrive 2nd kid) get a nice place to grow up and don't suffer because Mummy and Daddy are SOOOO desperate to be on the property ladder. So one size does not fit all.
Your broad sweeping statements smack strongly of yet another brainwashed soul. Yes you are doing well at a young age but open your mind a little to other ideas. It can save you a fortune and make you richer. The housing market will be on it's knees in two years time - I guarantee this. It's about as safe an investment as buying shares in an American Insurance company.
Your opinion. I personally see years of stagnation at around the level we are at, at the moment. Average house price around £150-£160k as dictated by all the indexes.
This I have learned from people far, far wealthier than any of us on SN. Even Trout, Zip and John B ;-)
I have done the maths - paying no interest and rental charges = cheaper than paying them plus you own the car. So can flog it if needed. No ties.
Your depreciation figure is also plucked out of the air - what if you do super low mileage?
I'm only going from the autotrader prices, granted low mileage cars will fetch a couple thousand more but I never took buyer bartering into the equation to which you can be expected to drop the price a little from advertised.
I can guarantee that you have left some charges/penalty clauses out of your lease costs just like you did above. You are too easily fooled by smart **** finance companies. They are there to make money. Leasing is renting. So your TTRS will not be yours. It will be your leasing companies. At the end you have no car. The cash buyer has a car to sell on.
PCP and leasing are slightly different finance plans, I wont bore with the details but with a lease, the car is the finance companies, and you rent it off of them. It is registered to the finance company and you get free RFL throughout the plan. PCP is different, the car is your own, i.e registered to yourself and you have the option to pay the final settlement in order to buy the car outright at the end of the term. As to other costs, with a PCP/Lease there is usually a £125 administration fee added on top with 1st payment, I think that's about it. As you have said, the cash buyer has a car to sell on, this can be a stressful expensive time, people phoning you up from Nigeria and then tyre kickers and dreamers offering you peanuts.
Just like buying a house makes more financial sense over the longterm than leasing, 20-25yrs worth of mortgage payments vs 50/60/70yrs worth of rental + inflation and then no appreciating asset when you're 6ft under.
We don't intend to rent forever - we will simply buy an place outright with no mortgage interest payments. For the time being we pay far less than an interest ONLY mortgage on this place in rent and our business gets an extremely cheap and very nice office to boot. Because it's so cheap, we save a decent amount regularly; so far we can buy a smallish house. Soon it will be a big house - possibly this place that we rent. At the same time our little boy (and soon to arrive 2nd kid) get a nice place to grow up and don't suffer because Mummy and Daddy are SOOOO desperate to be on the property ladder. So one size does not fit all.
Your broad sweeping statements smack strongly of yet another brainwashed soul. Yes you are doing well at a young age but open your mind a little to other ideas. It can save you a fortune and make you richer. The housing market will be on it's knees in two years time - I guarantee this. It's about as safe an investment as buying shares in an American Insurance company.
Your opinion. I personally see years of stagnation at around the level we are at, at the moment. Average house price around £150-£160k as dictated by all the indexes.
This I have learned from people far, far wealthier than any of us on SN. Even Trout, Zip and John B ;-)
It's an interesting discussion, with the M3 example posted, it certainly makes you think. The numbers are genuine, everything is backed up. As said by Ding, you could keep your £50k in a savings account as the very worst option, generate an income whilst matching the depreciation in finance payments.
I understand what you are saying, finance companies are out to make money. I just dont think they've done their homework with M3 depreciation on this 1
If anything, the depreciation is only going to get worse when the E92 is superseded.If anyone is on the M3 boards, you may find some will be interested in the finance option. It obviously doesnt work with all cars but Im confident in this case, the finance option is better
Anyway I'll bow out of this now as im just waffling about the same stuff over and over again
Mitch
Last edited by Mitchy260; 24 November 2010 at 07:32 PM.
24 November 2010, 07:53 PM
#36
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isn't that a rather bold statement everyone is making
how many people actually have the cash in the bank (i am sure quite a few financially literate people do including the posters on this thread), but I suspect that the majority don't
i'snt that the central marketing point of lease deals -- to allow people to drive cars they could never afford to buy outright
I bet leasing companies see people with the cash in the bank as nightmare customers, calculating APR's, residuals, depreciation, oportunity cost, and all that stuff
they just want people who can afford the 36 easy of 599.00 and are desperate for a shiny "precious"
how many people actually have the cash in the bank (i am sure quite a few financially literate people do including the posters on this thread), but I suspect that the majority don't
i'snt that the central marketing point of lease deals -- to allow people to drive cars they could never afford to buy outright
I bet leasing companies see people with the cash in the bank as nightmare customers, calculating APR's, residuals, depreciation, oportunity cost, and all that stuff
they just want people who can afford the 36 easy of 599.00 and are desperate for a shiny "precious"
If that wasn't the premise then the debate is a different one, which is can somebody who doesn't have £x in the bank afford to buy a car for £x? Or perhaps SHOULD somebody without £x buy a car for £x? But that's a subjective issue that I personally don't want to get into. Its also quite judgmental and so I don't feel comfortable telling somebody else what they should or should not spend their money on.
I just wanted the answer to cash vs leasing and £50k just happened to be the price of the M3 that Mitchy gave some numbers for.
Last edited by Dingdongler; 24 November 2010 at 07:56 PM.
25 November 2010, 09:47 AM
#37
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Mitchy - fair comments and good to see a healthy debate going on.
Just a point though - if you lease you WILL pay on terms related to full RRP. When you pay cash you can pull their pants down and stuff them.
As for selling - we have p/xed both our recent "departed" cars for very good money - better than if we'd sold privately (£6k for the Astra I thought was worth £5k, £4k for the Jimny I thought was worth just over £3k - both picked up and taken away from our house too). So we have got what I call brilliant deals on our old cars, haggled hard on the buying prices of the new cars and both times, got about a grands worth of extras thrown in too.
So while lease deals may appeal, cash is still king when it comes to driving a cracking bargain. And that saves you a lot of money. Anyone that buys a car at full RRP for cash deserves to have no cash at all.
As for making expensive cars accessible, like Ding says, if you can't afford it, don't buy it in the first place - you'll still be paying as much/more overall and spreading out costs won't make it any cheaper.
Just a point though - if you lease you WILL pay on terms related to full RRP. When you pay cash you can pull their pants down and stuff them.
As for selling - we have p/xed both our recent "departed" cars for very good money - better than if we'd sold privately (£6k for the Astra I thought was worth £5k, £4k for the Jimny I thought was worth just over £3k - both picked up and taken away from our house too). So we have got what I call brilliant deals on our old cars, haggled hard on the buying prices of the new cars and both times, got about a grands worth of extras thrown in too.
So while lease deals may appeal, cash is still king when it comes to driving a cracking bargain. And that saves you a lot of money. Anyone that buys a car at full RRP for cash deserves to have no cash at all.
As for making expensive cars accessible, like Ding says, if you can't afford it, don't buy it in the first place - you'll still be paying as much/more overall and spreading out costs won't make it any cheaper.
Last edited by Matteeboy; 25 November 2010 at 09:48 AM.
25 November 2010, 12:43 PM
#38
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I waited six months for the dealer to get back to me with a discount for cash for buying the GTR, this was at the height of the early 2009 gloom. They wouldn't even reduce to the pre-order discounted price.
25 November 2010, 02:22 PM
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There are some quite strong sweeping statements flying around here about leasing. To those who believe paying cash for a car is the only way, do you really believe that leased cars are only driven by people who can't afford to buy them outright?
25 November 2010, 02:43 PM
#41
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No. As I've mentioned somewhere the richest person I know drives a leased BMW 7 series. I have an open mind on the subject
25 November 2010, 04:30 PM
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Butkus - there is no "wrong" or "right" way to buy a car - just some will not entertain the idea of finance/leasing. However I do stand by the idea that too many have got too much on the never never and are teetering on the edge of deep ****. I know of plenty of people who have just about afforded payments, had some go wrong with the car or lost a job and been horribly stuffed by it. Too many live too close to the edge all in the pursuit of having a "better" car than others.
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