Financially best way to buy a car?

[daemon]

oldcynic said:

Is it worth working the problem backwards and figuring which cars have the best residuals after 3 years? Or forwards to work out which have the worst residuals after 6-12 months?

Yes - too many people just look at the purchase price, not the whole life costs.

[TheCoolerKing]

oldcynic said:

If you've got the cash but can prise a much better deal by taking finance then check the penalty clauses - I've known people take the finance then pay it off weeks later. Nothing the dealer can do about that - and they were banking on commission from the finance to bolster their profits.

I'd be surprised if a finance contract allows you to pay off without penalty so quickly. You are right car sales people get paid after the finance has gone through the cooling off period.


There is absolutely no contest between cash and finance none and I welcome a challenge.

This is not a personal view it is a FACT.

If you have cash please use it!

There is no APR on cash and if salesman gives you a better deal becauae you take out finance, will it still be cheaper than paying cash, the answer is......

[robsti]

daemon said:

angusc43 said:

Yes I am using the terms loosely. I am assuming that;

(a) all transactions that involve raising finance incur a cost for that finance - if not, why would the third parties bother?.

Not strictly true. Leasing is a monthly payment for a set time and then hand the car back. There is no interest rate that can be varied by the customer. The leasing companies make their money by buying cars in bulk at a much discount than you or i could attain and fund this in a much more cost effective way than you or i could.

angusc43 said:

I am also assuming that ;

(b) all cars depreciate at an alarming rate.

Not strictly true. You can minimise that depreciation by negotiating the best deal possible on a car known to depreciate the least. There was a recent example on here of a guy who bought a brand new m3 at a heavily discounted price drove it a year and got what he paid for it. On paper buying a new m3 is a bad idea, but in this particular instance it cost the guy nothing in depreciation.

Also, by opting for a PCP finance deal you are agreeing the residual value of the car up front. Therefore your depreciation is known. You are also paying for the car monthly, therefore your outgoings are known.

angusc43 said:

I was therefore suggesting to the OP that the best way to buy a car is one that avoids finance of ANY sort. As the OP will end up paying for the finance AND the depreciation.

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

angusc43 said:

In summary, the original question was "what's the best way to buy?". My answer was "cash". Still is.

Then you could on occasions be wrong.

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Edited by robsti on Tuesday 23 November 21:36

[daemon]

TheCoolerKing said:

oldcynic said:

If you've got the cash but can prise a much better deal by taking finance then check the penalty clauses - I've known people take the finance then pay it off weeks later. Nothing the dealer can do about that - and they were banking on commission from the finance to bolster their profits.

I'd be surprised if a finance contract allows you to pay off without penalty so quickly. You are right car sales people get paid after the finance has gone through the cooling off period.


There is absolutely no contest between cash and finance none and I welcome a challenge.

This is not a personal view it is a FACT.

If you have cash please use it!

There is no APR on cash and if salesman gives you a better deal becauae you take out finance, will it still be cheaper than paying cash, the answer is......

Read my post on the previous thread.

[daemon]

robsti said:

daemon said:

angusc43 said:

Yes I am using the terms loosely. I am assuming that;

(a) all transactions that involve raising finance incur a cost for that finance - if not, why would the third parties bother?.

Not strictly true. Leasing is a monthly payment for a set time and then hand the car back. There is no interest rate that can be varied by the customer. The leasing companies make their money by buying cars in bulk at a much discount than you or i could attain and fund this in a much more cost effective way than you or i could.

angusc43 said:

I am also assuming that ;

(b) all cars depreciate at an alarming rate.

Not strictly true. You can minimise that depreciation by negotiating the best deal possible on a car known to depreciate the least. There was a recent example on here of a guy who bought a brand new m3 at a heavily discounted price drove it a year and got what he paid for it. On paper buying a new m3 is a bad idea, but in this particular instance it cost the guy nothing in depreciation.

Also, by opting for a PCP finance deal you are agreeing the residual value of the car up front. Therefore your depreciation is known. You are also paying for the car monthly, therefore your outgoings are known.

angusc43 said:

I was therefore suggesting to the OP that the best way to buy a car is one that avoids finance of ANY sort. As the OP will end up paying for the finance AND the depreciation.

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

angusc43 said:

In summary, the original question was "what's the best way to buy?". My answer was "cash". Still is.

Then you could on occasions be wrong.

Have you factored in the easily obtainable 5-6k discount on a new GL?

No, the finance contribution is by Mercedes themselves, therefore any discount you negotiate with the dealer would be over and above the finance offer - in the same way as you can still get the same discount from a dealer if you take out a 0% finance deal

There are loads of deals whereby its better to take out the finance - there was a well documented one on here whereby you could get a brand new m3 for something like £1500 deposit and £550 a month. That worked out better than buying for cash and taking the depreciation hit. There was another whereby you could get an £80,000 6 series convertible for £589 a month. There have been MINI Cooper deals for £199 a month. There was a Clio 197 deal for £219 a month.

Or what about a brand new £32,000 SLK Mercedes for £4499 deposit and £289 a month over 30 months? Again, cheaper than paying cash and paying for the depreciation...

[daemon]

robsti said:

If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Edited by robsti on Tuesday 23 November 21:36

You are taking what i said out of context. I gave that example as a response to 'all cars depreciate heavily'.

[daemon]

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Its the one where you had a real go when we questioned the O/Ps proposed choice of car, and it turned out the O/P then thanked us for saving him a fortune in depreciation

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

Edited by daemon on Tuesday 23 November 21:54

[Deva Link]

daemon said:

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

To be fair - it's still going to cost the user £30,000 to drive that car for 3yrs, so there's a *lot* of money in the deal for Mercedes to play with. They only cost $60K in the US where they're made.

[daemon]

Deva Link said:

daemon said:

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

To be fair - it's still going to cost the user £30,000 to drive that car for 3yrs, so there's a *lot* of money in the deal for Mercedes to play with. They only cost $60K in the US where they're made.

We pay much higher taxes on our new cars than they do in the states though.

I've given other examples too.

I'm not saying finance is always better, just that people should think outside the box about what options are available when buying cars.

[robsti]

daemon said:

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

I did not forget,as I said if I wanted to listen to st....;)

[daemon]

robsti said:

daemon said:

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

I did not forget,as I said if I wanted to listen to st....;)

If it was st i was talking, how come the O/P thanked me (and others) for saving him a fortune in depreciation??

Made you look a bit stoopid in fact.

Edited by daemon on Tuesday 23 November 21:57

[robsti]

daemon said:

robsti said:

daemon said:

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

I did not forget,as I said if I wanted to listen to st....;)

You sure it wasnt because the O/P thanked us for saving him a fortune and you looked dumb?

You could save him even more if he bought one of your scrapage scheme refugees!

[NoelWatson]

daemon said:

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance.

Is that assuming you would be paying list price if buying with cash?

[daemon]

robsti said:

daemon said:

robsti said:

daemon said:

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

I did not forget,as I said if I wanted to listen to st....;)

You sure it wasnt because the O/P thanked us for saving him a fortune and you looked dumb?

You could save him even more if he bought one of your scrapage scheme refugees!

Sorry, those are too busy making me money - i resell them for a profit.

Edited by daemon on Tuesday 23 November 22:01

[anonymous-user]

on the GL example, it would be worth checking what discount was available to a 'cash' buyer, often where there is a generous finance package on offer, there is also a generous discount from list available for cash buyers

[Deva Link]

daemon said:

Deva Link said:

daemon said:

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

To be fair - it's still going to cost the user £30,000 to drive that car for 3yrs, so there's a *lot* of money in the deal for Mercedes to play with. They only cost $60K in the US where they're made.

We pay much higher taxes on our new cars than they do in the states though.

I've given other examples too.

I'm not saying finance is always better, just that people should think outside the box about what options are available when buying cars.

Sure - but the OP is about a £15K Focus. Examples of deals on Merc GL's aren't really relevant.

[daemon]

JPJPJP said:

on the GL example, it would be worth checking what discount was available to a 'cash' buyer, often where there is a generous finance package on offer, there is also a generous discount from list available for cash buyers

The finance contribution is from the manufacturer, not the dealer, therefore any normal dealer discounts will be available.

Its the same with 0% finance schemes backed by the manufacturer - the manufacturer pays the interest, so the dealer can still offer the usual discounts.

[robsti]

daemon said:

robsti said:

daemon said:

robsti said:

daemon said:

robsti said:

Have you factored in the easily obtainable 5-6k discount on a new GL?
If the M3 guy had bought the car outright and sold it a year later for the same amount then it would have been cheaper than if he had financed it!

Hey you 'forgot' to respond on this thread....

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Edited by daemon on Tuesday 23 November 21:42

Edited by daemon on Tuesday 23 November 21:46

I did not forget,as I said if I wanted to listen to st....;)

You sure it wasnt because the O/P thanked us for saving him a fortune and you looked dumb?

You could save him even more if he bought one of your scrapage scheme refugees!

Sorry, those are too busy making me money - i resell them for a profit.

Edited by daemon on Tuesday 23 November 22:01

Arnold Clark will be loosing a lot of sleep!

[daemon]

Deva Link said:

daemon said:

Deva Link said:

daemon said:

Not strictly true. Take a look at the deal here on the Mercedes GL

http://www2.mercedes-benz.co.uk/content/unitedking...

Heres an example whereby the manufacturer is putting £6000 into the deal and offering a low rate of finance. The finance charges only come to £4423 therefore the customer is £1600 better off by taking finance. Also this deal guarantees a future value of £28,850 for the car. I would say you would struggle to get £28,850 at three years old for a GL - What Car? predicts it will be worth just £24,000, so the purchaser using finance will be £4,850 better off.

To be fair - it's still going to cost the user £30,000 to drive that car for 3yrs, so there's a *lot* of money in the deal for Mercedes to play with. They only cost $60K in the US where they're made.

We pay much higher taxes on our new cars than they do in the states though.

I've given other examples too.

I'm not saying finance is always better, just that people should think outside the box about what options are available when buying cars.

Sure - but the OP is about a £15K Focus. Examples of deals on Merc GL's aren't really relevant.

Its totally relevant - there are people on here who are saying cash is always best. This is an example of how that is not necessarily true.

[hornetrider]

Can I just add, fifteen thousand of your English pounds on a 1.6 diesel Focus????? Jesus titty fking Christ!