Is car finance the way to go now?

So after three years I'll be taking a test drive of a new car tomorrow. In those three years the market has changed entirely from buying a car to leasing a car (HP or PCP). I remember car adverts three years ago were mostly showing the price of a car and then you could ask for a PCP/HP quote.

Nowadays, all adverts lead with finance.

I've only ever purchased my cars - usually cash + p/x + bank loan.

However, car prices have risen dramatically in recent years - sometimes in excess of 25%. I guess this is to put people off buying a brand new car outright and force people down the finance route.

Is this the way to go now? I guess the salesman will push me towards finance.

I wouldn't say so, without blowing my own whistle if you were smart you should do what I did. This will only work with a good credit rating though. But borrow the money from a bank!

Why is it better?

a) You can pay it off over a longer time
b) You own the car from the get go
c) Dealers offer huge discounts to cash buyers
and
d) It is just cheaper in general to use a good bank loan.

Now I get this might not be to everyones taste but it worked well for me. Got my Ibiza down from £16,995 to £12,500 and I'm paying it off over 5 years.

Always found the best deals are found by taking their finance on whatever terms they want you to (to get the best discount) and then settling up the finance with the finance house (not the dealer) within 14 days

Often allows you to get manufacturer contributions, free servicing packs etc too!

Either that or leasing....some of the "deals" on the lease thread are cheaper than ownership, especially if not keeping L/T and wanting new

That's a smart man there ladies and gentlemen. Take notice. This is how to do it.

For some people, absolutely. Dealer finance has been around for a long while, but the finance market has never been as competitive as it is presently.

MrsC70 will probably be getting a C4 Cactus in the coming months (I quite fancy getting her into something new and more practical), so I've been shopping around. So far it seems significantly cheaper to take one on a lease than it would be to buy via PCP, which was news to me.

We're probably buying a second property during the same period, so cash (for the requisite stamp duty shafting) is better off lining our pockets than a dealer's. £250 is an amount of money that we won't notice going out every month, and in turn it provides us with a car that leaves no headaches for things like MOTs or breakdowns.

I can understand the position of some PHers who would look down on people who finance cars (I've never personally borrowed - but wouldn't rule it out) - because taking finance on a depreciating asset is normally a recipe for disaster. However, when you add it up, provided that you're not stretching yourselves financially, I can't see any reason not to lease/finance.

I'd rather keep my money in something that will go up in value so quite happy to pay a monthly installment for a car.

Why save up £30k for a car and watch it disappear over the course of 3 years. Ok no monthly payments doing that but you are losing your money either way.

Very, just a case of calling up the finance company and requesting a settlement figure (you may have a couple of quid in interest costs post loan draw-down) but very easy to do within the 14 day cooling off period.

May make it harder to get approved for credit elsewhere (a bank) if needed though

after reading threads on here I was given the opposite impression. That is to say that showrooms preferred you bought a car via finance as they get extra commission from the finance company.

I would imagine that 90% of people don't put £250 themselves into a pension!

Pension? What the hell is a pension?

Sorry im under the age of 30, we are shafted with st wages, higher cost of living than you older lot. Pensions are very low on priority list. My generation tends to live for now. We all struggle to get on housing ladder.