Finance or Cash?
Discussion
Exactly what I've always figured - the loan is secured on the car - by just handing it back to the finance company all they can do is try and charge you for breaking the contract early. Given that early breaks are covered by the "unfair contract terms" act they have to show that what they charge you is "reasonable". Given the Noble is currently holding resell rates higher than whats now left on the finance, their ability to demonstrate charging me anything would pass the test of reasonableness would be something I'd happily let a court decide.
Consequently if things do all go tits up, I've still got my 45k of investments - hence I've always financed cars (and made sure my investments are relativly liquid!)
J
>> Edited by joust on Thursday 15th May 11:19
Consequently if things do all go tits up, I've still got my 45k of investments - hence I've always financed cars (and made sure my investments are relativly liquid!)
J
>> Edited by joust on Thursday 15th May 11:19
Well, as a relatively poor USian (is that the proper term?) I expect to finance most of mine.
There are banks in the US which will provide 4.9% financing for as long as 84 months on a car like the Noble. When I bought my Superformance S1 (made by the people who make the M12) I paid half up front and financed the rest at 5.3% over 60... but that was before the interest rates were driven down a bit.
I don't know (and haven't been able to see through Car et al) if the zero percent finance thing is happening in the UK or not. I picked up a Freelander at zero percent... in lieu of an incentive.
If someone on the street asked me if I financed the vehicle I would probably beat them with the nearest handy implement.
>> Edited by jboswell on Thursday 15th May 14:16
There are banks in the US which will provide 4.9% financing for as long as 84 months on a car like the Noble. When I bought my Superformance S1 (made by the people who make the M12) I paid half up front and financed the rest at 5.3% over 60... but that was before the interest rates were driven down a bit.
I don't know (and haven't been able to see through Car et al) if the zero percent finance thing is happening in the UK or not. I picked up a Freelander at zero percent... in lieu of an incentive.
If someone on the street asked me if I financed the vehicle I would probably beat them with the nearest handy implement.
>> Edited by jboswell on Thursday 15th May 14:16
For some reason I also seem to have a mental block on Finance.
At the moment I am in the position where I would be able to put down 50% for the car, now my mental block says that I should not finance the other 50% but should instead work my ar*e off and save the other 50% and purchase the car in a few years time
I think it has been drumed into me from an early age that if you can't afford to buy something other than on finance, then you probably can't afford it
(I guess one of the pros/cons of having a Dad that was a bank manager! )
I think I need to go away and think about my conundrum
Cheers
Michael
At the moment I am in the position where I would be able to put down 50% for the car, now my mental block says that I should not finance the other 50% but should instead work my ar*e off and save the other 50% and purchase the car in a few years time
I think it has been drumed into me from an early age that if you can't afford to buy something other than on finance, then you probably can't afford it
(I guess one of the pros/cons of having a Dad that was a bank manager! ) I think I need to go away and think about my conundrum
Cheers
Michael
Again, the US and UK are different places and what applies one place may not apply another, but...
The notion of waiting until you can afford to pay cash for a car to buy one is reasonable... as long as you are talking about buying a used Honda and putting 100,000 miles on it. The minute you get away from the idea of car-as-transportation, you've thrown sense out the window.
If I had the $70KUS necessary to buy an M12 in pocket, I could use it as a down payment on $350K worth of rental property which would bring me a cash flow after mortgaging of about $800-1000 per month, which is not too short of the $1400/month I'd need to finance the whole thing, to say nothing of the fact that in thirty years I would receive 100% of the rental which is $3000-3500 per month in today's dollars.
Or I could save $1400 a month until I can afford to pay cash for a Noble... but if I have committed to myself to save monthly for it, why not buy the car and pay monthly for it?
In a worst case scenario in the US, I would pay five percent money on the declining balance of a new Noble while picking up perhaps three to four percent per year on the increasing balance of my savings, which breaks dead even in the long run and offers more liquidity options.
When people tell you to pay cash for cars, there is an implicit lesson in there that you won't go off and spend fifty thousand pounds on one. 'Cause that's real money that can purchase real, performing assets.
The last consideration: YOU as a person are a depreciating asset. Your body can break down. You can become ill. You can acquire responsibilities that lessen your will, desire, or ability to own something like a Noble.
If you are 35, don't wait and save until you are 40. If you are 40, don't wait and save until you are 45. You might not live to see it, or you might simply lose your enthusiasm for such a thing.
My experience might be a little different than yours. Judging from the things I read on this forum, I am in a different stratum... just a working stiff who enjoys cars and trucks, without a penny of inheritance to my name
The notion of waiting until you can afford to pay cash for a car to buy one is reasonable... as long as you are talking about buying a used Honda and putting 100,000 miles on it. The minute you get away from the idea of car-as-transportation, you've thrown sense out the window.
If I had the $70KUS necessary to buy an M12 in pocket, I could use it as a down payment on $350K worth of rental property which would bring me a cash flow after mortgaging of about $800-1000 per month, which is not too short of the $1400/month I'd need to finance the whole thing, to say nothing of the fact that in thirty years I would receive 100% of the rental which is $3000-3500 per month in today's dollars.
Or I could save $1400 a month until I can afford to pay cash for a Noble... but if I have committed to myself to save monthly for it, why not buy the car and pay monthly for it?
In a worst case scenario in the US, I would pay five percent money on the declining balance of a new Noble while picking up perhaps three to four percent per year on the increasing balance of my savings, which breaks dead even in the long run and offers more liquidity options.
When people tell you to pay cash for cars, there is an implicit lesson in there that you won't go off and spend fifty thousand pounds on one. 'Cause that's real money that can purchase real, performing assets.
The last consideration: YOU as a person are a depreciating asset. Your body can break down. You can become ill. You can acquire responsibilities that lessen your will, desire, or ability to own something like a Noble.
If you are 35, don't wait and save until you are 40. If you are 40, don't wait and save until you are 45. You might not live to see it, or you might simply lose your enthusiasm for such a thing.
My experience might be a little different than yours. Judging from the things I read on this forum, I am in a different stratum... just a working stiff who enjoys cars and trucks, without a penny of inheritance to my name
jboswell said: Again, the US and UK are different places and what applies one place may not apply another, but...
The notion of waiting until you can afford to pay cash for a car to buy one is reasonable... as long as you are talking about buying a used Honda and putting 100,000 miles on it. The minute you get away from the idea of car-as-transportation, you've thrown sense out the window.
If I had the $70KUS necessary to buy an M12 in pocket, I could use it as a down payment on $350K worth of rental property which would bring me a cash flow after mortgaging of about $800-1000 per month, which is not too short of the $1400/month I'd need to finance the whole thing, to say nothing of the fact that in thirty years I would receive 100% of the rental which is $3000-3500 per month in today's dollars.
Or I could save $1400 a month until I can afford to pay cash for a Noble... but if I have committed to myself to save monthly for it, why not buy the car and pay monthly for it?
In a worst case scenario in the US, I would pay five percent money on the declining balance of a new Noble while picking up perhaps three to four percent per year on the increasing balance of my savings, which breaks dead even in the long run and offers more liquidity options.
When people tell you to pay cash for cars, there is an implicit lesson in there that you won't go off and spend fifty thousand pounds on one. 'Cause that's real money that can purchase real, performing assets.
The last consideration: YOU as a person are a depreciating asset. Your body can break down. You can become ill. You can acquire responsibilities that lessen your will, desire, or ability to own something like a Noble.
If you are 35, don't wait and save until you are 40. If you are 40, don't wait and save until you are 45. You might not live to see it, or you might simply lose your enthusiasm for such a thing.
My experience might be a little different than yours. Judging from the things I read on this forum, I am in a different stratum... just a working stiff who enjoys cars and trucks, without a penny of inheritance to my name
I would agree that you really don't know what position you are going to be in in 5 years. If you can afford to do it now (with monthly payments), then go for it, you may not get the opportunity again, hell you may not even be on this earth in 5 years, you just don't know. If you do finance, then if you find yourself in a situation where you need to get rid of the car, worst case scenario is you have lost a few thousand pounds, its not as if once you bought the car you can never recover that money again, you simply sell the thing. If you can afford £50k on a car, then you can probably afford to take a hit on a few thousand (even though it may be painful).
jboswell said: Again, the US and UK are different places and what applies one place may not apply another, but...
The notion of waiting until you can afford to pay cash for a car to buy one is reasonable... as long as you are talking about buying a used Honda and putting 100,000 miles on it. The minute you get away from the idea of car-as-transportation, you've thrown sense out the window.
If I had the $70KUS necessary to buy an M12 in pocket, I could use it as a down payment on $350K worth of rental property which would bring me a cash flow after mortgaging of about $800-1000 per month, which is not too short of the $1400/month I'd need to finance the whole thing, to say nothing of the fact that in thirty years I would receive 100% of the rental which is $3000-3500 per month in today's dollars.
Or I could save $1400 a month until I can afford to pay cash for a Noble... but if I have committed to myself to save monthly for it, why not buy the car and pay monthly for it?
In a worst case scenario in the US, I would pay five percent money on the declining balance of a new Noble while picking up perhaps three to four percent per year on the increasing balance of my savings, which breaks dead even in the long run and offers more liquidity options.
When people tell you to pay cash for cars, there is an implicit lesson in there that you won't go off and spend fifty thousand pounds on one. 'Cause that's real money that can purchase real, performing assets.
The last consideration: YOU as a person are a depreciating asset. Your body can break down. You can become ill. You can acquire responsibilities that lessen your will, desire, or ability to own something like a Noble.
If you are 35, don't wait and save until you are 40. If you are 40, don't wait and save until you are 45. You might not live to see it, or you might simply lose your enthusiasm for such a thing.
My experience might be a little different than yours. Judging from the things I read on this forum, I am in a different stratum... just a working stiff who enjoys cars and trucks, without a penny of inheritance to my name
Never a truer word written than jboswell's comments about having it now (if you can?!) - I 've always strived to follow this maxim (first had supercars, and other luxury items usually associated with people in their 40s, in my mid-late 20s and have never regretted it!). Always enjoy yourself now - have you seen the news lately!
On the subject of finance, I'm still unconvinced that finance is the way to go - when you can afford to pay in cash. In today's world there's no finance vehicle or system anything near safe enough to return what it costs you to borrow the money over the term (less depreciation, of course). And, for me paying cash means better bargaining power (alas, not on a new Noble!), less paperwork, an unchanged credit rating and the knowledge that it's all mine!
Of course, if any Pistonhead has knowledge of a safeish scheme/system/vehicle able to provide a relatively adequate return in this equation then I'd be interested in hearing it?!
>> Edited by amg merc on Friday 16th May 08:32
guysh said: I was trying to remember what the Super 7 style cars where that they showed on my vist to Hitech Automotive in PE. As I remeber they don't make them in Left hand drive which surprised me because I'm sure they would sell well in the UK being a larger 7.
Well, here's mine:
It's a great car and it really isn't much of a "Seven copy". When you look through the vehicle you see that the Hi-Tech people re-engineered everything, from the Kevlar undertray to the fixed seat/adjustable pedals and wheel, to the working boot that is waterproof... The price you pay is 150kg over a comparable Caterham. The reward is a wider, more comfortable, more freeway-capable car. Unlike a Caterham, 120-130 mph in this car doesn't feel like you are risking your life
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