Buy car with cash or lease.
Discussion
Lowering the mortgage and saving what, 3-5% in interest to take a lease that costs significantly more makes little sense!
How big is your mortgage? How much do you both earn? How much are your essential outgoings? Are you thinking of a brand new depreciation machine or a 5 yr old car?
Rather a vague question, you will get no end of different advice here as everyone has very different answers to the above.
ETA I purchased a car outright, but a 10 year old SL55 isn't going to depreciate as much as a new 5 series. I suspect my situation is rather different to yours, so you really need to decide based on your personal situation.
How big is your mortgage? How much do you both earn? How much are your essential outgoings? Are you thinking of a brand new depreciation machine or a 5 yr old car?
Rather a vague question, you will get no end of different advice here as everyone has very different answers to the above.
ETA I purchased a car outright, but a 10 year old SL55 isn't going to depreciate as much as a new 5 series. I suspect my situation is rather different to yours, so you really need to decide based on your personal situation.
Do whatever you want.
The option that makes most financial sense would be to give up on cars as a hobby/interest altogether because they mostly deteriorate and mostly depreciate so you're on to a loser.
This is Pistonheads though, where a vague interest in cars is supposed to be a pre-requisite for anyone bothering to sign up.
You could put £20k against your mortage and leave you £10k for something undesirable.
You could put £10k down as deposit on a V8 supersaloon, pay monthly payments and use the £20k as the final payment at the end.
You could spend £30k on a nice V8 Vantage or a similar 00's desirable car that's done most of its depreciation.
I'd strongly suggest that you use your £30k in whatever manner you honestly feel will add most value to your life overall. If it's a lump sum you've inherited (for example) then even if you could clear your mortgage completely you'll still only have £500~£1000/month more in your pocket and you'll still not have a nice car without several years of even more saving.
Absolutely DO NOT use the money to buy something you're not 100% sure you actually want to own as that is the biggest waste of all - particularly if you lose money selling it on again, lose interest in cars and end up in a white diesel German car as it is sensible from then on.
The option that makes most financial sense would be to give up on cars as a hobby/interest altogether because they mostly deteriorate and mostly depreciate so you're on to a loser.
This is Pistonheads though, where a vague interest in cars is supposed to be a pre-requisite for anyone bothering to sign up.
You could put £20k against your mortage and leave you £10k for something undesirable.
You could put £10k down as deposit on a V8 supersaloon, pay monthly payments and use the £20k as the final payment at the end.
You could spend £30k on a nice V8 Vantage or a similar 00's desirable car that's done most of its depreciation.
I'd strongly suggest that you use your £30k in whatever manner you honestly feel will add most value to your life overall. If it's a lump sum you've inherited (for example) then even if you could clear your mortgage completely you'll still only have £500~£1000/month more in your pocket and you'll still not have a nice car without several years of even more saving.
Absolutely DO NOT use the money to buy something you're not 100% sure you actually want to own as that is the biggest waste of all - particularly if you lose money selling it on again, lose interest in cars and end up in a white diesel German car as it is sensible from then on.
subevo said:
£30000 to spend on a car.
Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
If you could pay the entire mortgage off then there might be something to be said for piece of mind. If you go bust it's better to lose your car than your home.Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
Apart from that buy outright every time. Otherwise you are effectively borrowing money to stick in the bank.
Years ago we came into a good chunk of money and naturally I started to imagine the tasty cars we would have. I had them all mapped out in my mind.
Thats the point when the wife offered her input and we ended up paying off the mortgage (very fortunate position to be able to do that so I'm not moaning)
Although those cars could have been nice, it's a good feeling wiping out, or in your case reducing the debt. Especially when the interest rates increase in the next few months.
Play the long game mate
Thats the point when the wife offered her input and we ended up paying off the mortgage (very fortunate position to be able to do that so I'm not moaning)
Although those cars could have been nice, it's a good feeling wiping out, or in your case reducing the debt. Especially when the interest rates increase in the next few months.
Play the long game mate
subevo said:
£30000 to spend on a car.
Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
Wife wants to buy with savings
I want to lower mortgage and lease car.
What would you do.
Head: As above, work out the total cost of ownership (TCO) in a simple spreadsheet. Cost everything, big and tiny. A 1-weekend exercise that could save tens of thousands in the long run. Sad, but worth it. It is likely that reducing debt (mortgage) will be the best of the 2 options.Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
Wife wants to buy with savings
I want to lower mortgage and lease car.
What would you do.
Heart: Put down £30k deposit on a big fat Aston and driver around like Lord and Lady Muck for a couple years
subevo said:
£30000 to spend on a car.
Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
Wife wants to buy with savings
I want to lower mortgage and lease car.
What would you do.
1. What car? 30k on a new 120d msport or an appreciating classic? Would you ever buy with cash outright .if you had the money.
Or would you keep cash in bank and lease or finance car instead.
Wife wants to buy with savings
I want to lower mortgage and lease car.
What would you do.
2. See above, a new (white goods) car I would almost always lease as I'd be looking to get rid after three years max and the lease is pretty much the same as depreciation except I've got no worries about trying to get my money back by selling the car at the end. A classic on the other hand that I may want for a long time I would probably buy outright.
Does your wife have some kind of 'we don't own the car' mentality if you lease, is it bragging rights? A lot of people seem to think it's wierd but it makes no difference.
vinnie83 said:
Lowering the mortgage and saving what, 3-5% in interest to take a lease that costs significantly more makes little sense!
ThisDr Jekyll said:
Apart from that buy outright every time. Otherwise you are effectively borrowing money to stick in the bank.
Thiskambites said:
However, if you want to spend £30k on the car, keep the debt wherever the lower interest rate is. For me, that'd mean paying cash for the car and keeping my mortgage.
And this.Jimboka said:
Lease & pay a chunk off the mortgage.
A mortgage is one of the cheapest forms of borrowing available. Paying off some of the mortgage in order to lease is like demanding to pay £10 for a pint instead of the £3 they're trying to charge you.To make maths simple, let's say he leases a 30k car at £400 PCM and after the 3 year lease that's £15k gone.
He buys the car and after 3yrs it's worth £17k so he's £2k better off buying.
However if he paid £30k off his mortgage (let's presume 4% interest) that would save him around £100 a month in interest payments.
So now the lease car is technically £300 a month so £11k ish over the 3 year term so you'd be £2k better off now than outright buying, and you've a cast iron residual guarantee too.
This is presuming you have an income to pay the lease and were not utilising your savings to do so.
Or, you could buy the car cash and overpay your mortgage by £400 a month, or you could...
It's all man maths b
ks you will pay either which way.
He buys the car and after 3yrs it's worth £17k so he's £2k better off buying.
However if he paid £30k off his mortgage (let's presume 4% interest) that would save him around £100 a month in interest payments.
So now the lease car is technically £300 a month so £11k ish over the 3 year term so you'd be £2k better off now than outright buying, and you've a cast iron residual guarantee too.
This is presuming you have an income to pay the lease and were not utilising your savings to do so.
Or, you could buy the car cash and overpay your mortgage by £400 a month, or you could...
It's all man maths b
ks you will pay either which way. xRIEx said:
A mortgage is one of the cheapest forms of borrowing available. Paying off some of the mortgage in order to lease is like demanding to pay £10 for a pint instead of the £3 they're trying to charge you.
Except that manufacturers will often support finance deals so that they are cheaper than buying outright. This enables them to shift more vehicles, while supporting RVs. A good lease or PCP can be cheaper than buying for cash. Just look at some of the deals people got recently on leased Golf R or M135i. Amateurish said:
xRIEx said:
A mortgage is one of the cheapest forms of borrowing available. Paying off some of the mortgage in order to lease is like demanding to pay £10 for a pint instead of the £3 they're trying to charge you.
Except that manufacturers will often support finance deals so that they are cheaper than buying outright. This enables them to shift more vehicles, while supporting RVs. A good lease or PCP can be cheaper than buying for cash. Just look at some of the deals people got recently on leased Golf R or M135i. Thanks for the replys.
It's a bmw i3 I'm after.i know it's not everybody's cup of tea but my last car was a 5.7 v8.
My mortgage is only £50000
I will save £200 / month on payments if I put £20000 into mortgage.which is my savings.i was then going to borrow the last £10000
I usually only spend £10000 or less on a car but since it's my 50th birthday.i wanted to splash out.
As I said wife wants to buy outright as if I get made redundant in the next year or so I can just sell the car.whereas if I've reduced my mortgage .my redundancy money would pay remaining mortgage off.
It's a bmw i3 I'm after.i know it's not everybody's cup of tea but my last car was a 5.7 v8.
My mortgage is only £50000
I will save £200 / month on payments if I put £20000 into mortgage.which is my savings.i was then going to borrow the last £10000
I usually only spend £10000 or less on a car but since it's my 50th birthday.i wanted to splash out.
As I said wife wants to buy outright as if I get made redundant in the next year or so I can just sell the car.whereas if I've reduced my mortgage .my redundancy money would pay remaining mortgage off.
Just my opinion, pay the morgage off. lease/hp a car if you MUST buy a new one. If all goes well no issues at all, yes you will pay more interest on the car purchase, but IF your life goes a bit Pete Tong and you are not in a position to afford the monthleys, I know which I'd rather default on IF I had too.
I paid my morgage off, best thing I ever did, I can CHOOSE to do what I want with my car purchases now safe in the knowledge that whatever happens, my family home is mine. All you are ever doing when you buy a car is deciding how much it will cost you over a period of time and if you think it's worth it. Buy a car for 50K sell for 20K 1 year later it's cost you your 30K, but YOU might decide that that is worth it to you for the pleasure it gives you. A lot of people on these forums seem to miss that point, it doesn't matter what it costs if YOU think it's value for money.
I paid my morgage off, best thing I ever did, I can CHOOSE to do what I want with my car purchases now safe in the knowledge that whatever happens, my family home is mine. All you are ever doing when you buy a car is deciding how much it will cost you over a period of time and if you think it's worth it. Buy a car for 50K sell for 20K 1 year later it's cost you your 30K, but YOU might decide that that is worth it to you for the pleasure it gives you. A lot of people on these forums seem to miss that point, it doesn't matter what it costs if YOU think it's value for money.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff