Financial advice regarding potential car purchase please

Financial advice regarding potential car purchase please

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a bit of a loser

Original Poster:

2 posts

87 months

Monday 12th December 2016
quotequote all
Hello everyone. After some financial advice please. Will try to be clear as possible.

Current car is 8 months old – owe 19.4k on finance for it. Looking at an approved used 435i. BMW have offered me 18k for current car, this is the best he can do and he "can't really" knock anything off the price of the 435i (29k).
Really wanted to go approved used from dealer as I'll get a decent warranty which is the only reason.

My salary is 39k per year this can be 60k with overtime (not guaranteed but have done this last 6 years), I have a £320pm mortgage and apart from the current car (£300pm) no other debts.
Don't really go out much nor spend on lavish holidays etc and have 12k savings in a ISA.

My question is am I at the point where I would be better off buying a 440i new as the dealer says he can give me a much lower APR and give me a significant discount from list price. Or am I at the point where I may be better to lease?

If it's relevant I do 20 miles per day with weekend blasts, I'd say no more than 8-10k miles per year

walm

10,609 posts

201 months

Monday 12th December 2016
quotequote all
Why the hell are you selling an 8 month old car?

fat80b

2,242 posts

220 months

Monday 12th December 2016
quotequote all
a bit of a loser said:
Hello everyone......

My question is am I at the point where I would be better off ....
You'd be better off not having £20K of finance round your neck and £300 pm to pay - Why would anyone want to spend 74% of their annual salary on a depreciating asset.

Drive an older car and put the difference into some form of investment and you'll be much better off (and happier) long term (imho).

Bob

rich12

3,461 posts

153 months

Monday 12th December 2016
quotequote all
Is it not 10% of his annual salary?

walm

10,609 posts

201 months

Monday 12th December 2016
quotequote all
rich12 said:
Is it not 10% of his annual salary?
29/39=0.74

walm

10,609 posts

201 months

Monday 12th December 2016
quotequote all
rich12 said:
Is it not 10% of his annual salary?
Obviously it lasts longer than a year though - yes!

fat80b

2,242 posts

220 months

Monday 12th December 2016
quotequote all
rich12 said:
Is it not 10% of his annual salary?
No - I did 29K / 39K, granted that it is over several years - although to be fair the last one was only for 8 Months.....

a bit of a loser

Original Poster:

2 posts

87 months

Monday 12th December 2016
quotequote all
Sorry guys should have been more clear. The current car I got at a heavily discounted price through the Ford privilege scheme. I have to keep it 9 months before I can sell it. I want to get rid as I don't like it plus due to a knee problem I'd really benefit from having an automatic car now.

tighnamara

2,186 posts

152 months

Monday 12th December 2016
quotequote all
a bit of a loser said:
Sorry guys should have been more clear. The current car I got at a heavily discounted price through the Ford privilege scheme. I have to keep it 9 months before I can sell it. I want to get rid as I don't like it plus due to a knee problem I'd really benefit from having an automatic car now.
Heavily discounted and privilege scheme yet after 8 months you are offered less than what you owe.
I may be stupid but why did you purchase the car and what are the benefits of the scheme.

Jon39

12,782 posts

142 months

Wednesday 14th December 2016
quotequote all

Please do not take any notice of the suggestions.

Go ahead and buy your new car. You have worked hard and so deserve it.
The model BMW you want will certainly impress everyone (anyone who can tell the difference between so many similar looking bland BMWs).

I very much like people who buy new cars, because it helps the motor industry and also provides 20% much needed painless tax to the Treasury.

Another reason that I like new car buyers, is I always like to buy my cars when they are between 2 and 3 years old, because doing debt on depreciating assets is a mugs game. Buy a pristine, lightly used, three year old at HALF PRICE. My last one cost the original new buyer six figures. Since year four, there has been zero depreciation.

Joking aside, do as the others have all said, keep the car that you already have, clear the debt and be happy.

If you are a warranty worrier, you do still get a warranty on a three year old car, but I have never ever had to claim on a warranty. In general, cars are surprisingly reliable these days.




Edited by Jon39 on Wednesday 14th December 10:55

Birkin1932

784 posts

138 months

Sunday 18th December 2016
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I'm amazed how many people see 'working hard' as a reason to buy an expensive item.

to me you say well you have the cash to afford it so buy it if you really want it

A road sweeper works bloody hard, so should he buy a Ferrari ?

survivalist

5,614 posts

189 months

Sunday 18th December 2016
quotequote all
Not sure if this is really financial advice, but you just need to do the numbers and work out what the best option for you is.

If you only want to keep the car for a few years and never plan on fully paying it off it's just a calculation of what's the cheapest way to own/rent either the used 435 or new 440.

I'd suggest phoning a couple of the recommended companies on the best lease deals thread and also ask the BMW dealer what deposit & monthly payment they can offer on a new 440. The compare them to price you've already been offered on the 435i.

A quick google suggest you can easily get £9-10k discount on a new 440, which puts the real pice around 33k. That doesn't include any options though, obviously.

Jon39

12,782 posts

142 months

Tuesday 20th December 2016
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Birkin1932 said:
I'm amazed how many people see 'working hard' as a reason to buy an expensive item.

to me you say well you have the cash to afford it so buy it if you really want it

A road sweeper works bloody hard, so should he buy a Ferrari ?

It is only a saying, Birkin.

As you point out, an idiotic sole reason for spending money unnecessarily on a car, which perhaps not an essential purchase at the time.



walm

10,609 posts

201 months

Tuesday 20th December 2016
quotequote all
Jon39 said:
It is only a saying, Birkin.

As you point out, an idiotic sole reason for spending money unnecessarily on a car, which perhaps not an essential purchase at the time.
Never before in the whole of human history has a 440 been an essential purchase.

Jon39

12,782 posts

142 months

Tuesday 20th December 2016
quotequote all

walm said:

Never before in the whole of human history has a 440 been an essential purchase.
laugh









walm

10,609 posts

201 months

Tuesday 20th December 2016
quotequote all
Jon39 said:
walm said:

Never before in the whole of human history has a 440 been an essential purchase.
laugh
Don't get me wrong - I would still love one!!! smile

Jon39

12,782 posts

142 months

Tuesday 20th December 2016
quotequote all

walm said:
Jon39 said:
walm said:

Never before in the whole of human history has a 440 been an essential purchase.
laugh
Don't get me wrong - I would still love one!!! smile

How about a 4.7 Aston Martin Vantage instead?
Most people consider it to be a beautiful, timeless design.
Wonderful condition used examples can be found, for about the same money as a new 440, and even better, there has been no depreciation during the past 5 years.

Just a thought.




walm

10,609 posts

201 months

Tuesday 20th December 2016
quotequote all
Jon39 said:

How about a 4.7 Aston Martin Vantage instead?
Most people consider it to be a beautiful, timeless design.
Wonderful condition used examples can be found, for about the same money as a new 440, and even better, there has been no depreciation during the past 5 years.

Just a thought.
Honestly you don't need to tell me about the benefits of someone else taking the depreciation hit!!
I only buy cars at least 5 years old and try to own them at least 5 years to amortise the dealer margin.
e.g. Elise, Exige, GTR - all limited depreciation in my ownership.

Jon39

12,782 posts

142 months

Tuesday 20th December 2016
quotequote all

walm said:
Honestly you don't need to tell me about the benefits of someone else taking the depreciation hit!!
I only buy cars at least 5 years old and try to own them at least 5 years to amortise the dealer margin.
e.g. Elise, Exige, GTR - all limited depreciation in my ownership.


Good man.

We have cracked the system, but must be hated by those in the motor industry, who need to 'put food on the table'.

I sometimes wonder how much in total during a lifetime, it must cost someone, who likes to buy an 'average' new car every three years?

Three year depreciation on say 17 Ford Escort/Focus type cars must be a very significant amount of money.
Even just halving that, by keeping each car for 6 years instead of 3, would probably provide a free 'I've always wanted one of those' cars.







walm

10,609 posts

201 months

Tuesday 20th December 2016
quotequote all
Jon39 said:
We have cracked the system, but must be hated by those in the motor industry, who need to 'put food on the table'.
Hence the inexorable rise of the lease.
Buying a car makes the depreciation hit far harder to ignore.
Just considering the monthly payment makes it seem so much more "reasonable".
(That said, some leases ARE better value than buying, if you HAVE to buy a new car... the thing is hardly anyone HAS to buy a new car!!)