Take out finance or save up and just buy outright
Discussion
Right I've been toying with the idea of a new car for some time as my meggy is abit knackered (11 years old 94k) and think its time to get something better. I've spotted a skoda Fabia http://www.drivebenfield.com/approved-used-vehicle... which I like and could afford the payments on when I start my new job in a couple of weeks time.
However I'm not sure as I prefer to buy outright and know everything is taken care of and that it's mine, my family say either take a bank loan out or just get Christmas out the way and save up after new year and get one next year.
Any suggestions?
However I'm not sure as I prefer to buy outright and know everything is taken care of and that it's mine, my family say either take a bank loan out or just get Christmas out the way and save up after new year and get one next year.
Any suggestions?
i took out a graduate loan to consilidate some debt and put the rest into a car....it was 10k over 5 years.
At the time it was all good, however having that constant monthly drain of £200 odd quid does limit your spending/saving power a fair bit (depending on income).
Would I take out a loan to buy a car again? no, probably not. However its down to personal finance situation and attitude really.
I'm near the end of the 5 years now, will seem like a payrise heh.
At the time it was all good, however having that constant monthly drain of £200 odd quid does limit your spending/saving power a fair bit (depending on income).
Would I take out a loan to buy a car again? no, probably not. However its down to personal finance situation and attitude really.
I'm near the end of the 5 years now, will seem like a payrise heh.
OP,
Everyone is different. Personally, I always buy outright because then I feel I can be proud of the car - I own it. I've had company cars for years and people would see a brand new car and compliment, I always felt "why are you congratulating me on my car, it's not mine". I get more enjoyment from driving my 2006 car than I would from a brand new one that belonged to ALD Automotive.
Other people want to have more known costs, and / or want to be in a nicer car than they would have otherwise been able to afford, and / or can invest the money for a larger return than the cost of finance, and / or can get a deal on tick much cheaper than the depreciation because that's how e.g Audi hide the massive discounts on s
t they can't sell high up the range.
Any and all of the viewpoints are equally valid, the answer is "whatever works for you".
Everyone is different. Personally, I always buy outright because then I feel I can be proud of the car - I own it. I've had company cars for years and people would see a brand new car and compliment, I always felt "why are you congratulating me on my car, it's not mine". I get more enjoyment from driving my 2006 car than I would from a brand new one that belonged to ALD Automotive.
Other people want to have more known costs, and / or want to be in a nicer car than they would have otherwise been able to afford, and / or can invest the money for a larger return than the cost of finance, and / or can get a deal on tick much cheaper than the depreciation because that's how e.g Audi hide the massive discounts on s
t they can't sell high up the range.Any and all of the viewpoints are equally valid, the answer is "whatever works for you".
If you can afford the payments, go for it. How long would it take you to save the same money? 3? 4? Maybe 5 years, especially considering your 94k-mile car is likely to need some sort of work done in that time.
Importantly, shop around for a good finance rate and if people want to mock you for not "owning" the car, let them. I don't own my home, I rent, but it doesn't stop me being house-proud and taking care of the place.
Importantly, shop around for a good finance rate and if people want to mock you for not "owning" the car, let them. I don't own my home, I rent, but it doesn't stop me being house-proud and taking care of the place.
The problem with borrowing money to buy a car is that the car depreciates but you continue paying for it at the full original price. Some people say "fine, if you can afford it". But the problem comes when you then want to buy a new car a few years later. You can't afford that one either so the cycle of debt goes on and on.
It's completely the opposite of having a mortgage to buy a house where the loan tends to shrink relative to the value of the house. Opposite way round with a car.
It's completely the opposite of having a mortgage to buy a house where the loan tends to shrink relative to the value of the house. Opposite way round with a car.
I think I might just wait a little while until after Christmas where I know I'll be in a better financial position, I worked out all my bills with my new job and I could afford It and possibly pay it off within 3 years if I budget right. Or just save up and pay off in one go like I did with the meggy
Shaoxter said:
Why do you need such a new car? Cars like those suffer from the most depreciation so you'll get another nasty surprise when you come to sell it.
Plenty to fun, reliable and depreciation-proof motors out there for £2k which you won't need a loan for.
Are you the OP's mum?Plenty to fun, reliable and depreciation-proof motors out there for £2k which you won't need a loan for.
Everyone is different and for some the appeal of a shiny new thing is enough to pay interest on quickly depreciating asset. I've financed cars in the past and I wouldn't rule it out in the future if the numbers were right but at the moment I get much more pleasure from owning my 13 year old car outright than I ever did paying £200+ a month on a new car I never actually owned.
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