Money for car that's a year away.

Money for car that's a year away.

Author
Discussion

croyde

Original Poster:

22,701 posts

229 months

Wednesday 4th March 2015
quotequote all
So I have ordered a car, cost £33k, but it won't be with me for a year, maybe a little less. I have the money now and am happy to pay cash but I will check the PCP deals when/if available.

Currently the money sits in an offset Mortgage account saving me £40/month off the mortgage payments. Could I be doing something better with it?

sidicks

25,218 posts

220 months

Wednesday 4th March 2015
quotequote all
croyde said:
So I have ordered a car, cost £33k, but it won't be with me for a year, maybe a little less. I have the money now and am happy to pay cash but I will check the PCP deals when/if available.

Currently the money sits in an offset Mortgage account saving me £40/month off the mortgage payments. Could I be doing something better with it?
Unlikely!
wink

Claudia Skies

1,098 posts

115 months

Wednesday 4th March 2015
quotequote all
+1

swd

81 posts

181 months

Wednesday 4th March 2015
quotequote all
Maths isn't my strong point, but I think is 1.45% (£480) over the year in the off set. No tax to pay on that, so not terrible, but not not stunning. You might be able to squeeze an extra couple of quid out of it elsewhere depending on your tax bracket. Having said that, the work done / time spent to get those extra few pennies might not be worth it. I have an offset on a very low interest rate mortgage, and I reckoned I could improve on it with a few Santander 123 accounts. I did, but it was a faff. I'm back to using the offset account.

No debts you'd like to pay off? If you did, you could clear them now, save on the debt interest that you would've paid, and start a savings plan that'll bring you right beach up to the 33k for when you need it next year.

Happy to have my logic corrected. I'm an amateur at this.

croyde

Original Poster:

22,701 posts

229 months

Wednesday 4th March 2015
quotequote all
Thanks.

No debts apart from the Mortgage. Good maths, it's a 1.5% mortgage smile

Amazing that £30 odd grand can mean so little these days. Wouldn't even get me a 10% deposit on a flat around here (SW London) so might as well chuck it at a car.

jonah35

3,940 posts

156 months

Wednesday 4th March 2015
quotequote all
What's your attitude to risk?

croyde

Original Poster:

22,701 posts

229 months

Wednesday 4th March 2015
quotequote all
Good question.

I've stuck money on ISAs and stocks only to see loses long term. Only one of my ISAs has done ok and I bought that yonks ago when they were called PEPs.

Are you talking about Old Nag at 50/1, 2.30 Kempton Park?

DSLiverpool

14,670 posts

201 months

Thursday 5th March 2015
quotequote all
£30k in a one year ISA or if you have a small appetite for risk £30k in one of these (or two)
http://www.telegraph.co.uk/finance/personalfinance...
You may lose the lot or make enough for a supercharger - its a risk.

sidicks

25,218 posts

220 months

Thursday 5th March 2015
quotequote all
DSLiverpool said:
£30k in a one year ISA or if you have a small appetite for risk £30k in one of these (or two)
http://www.telegraph.co.uk/finance/personalfinance...
You may lose the lot or make enough for a supercharger - its a risk.
1) maximum investment into an ISA is £15k p.a.
2) anyone considering a £33k car should probably already have used their ISA allowance for the year
3) anyone with a one year or less time horizon and like be mad to consider the volatility (and downside risk) of equities.

Apart from that, great advice...
frown

DSLiverpool

14,670 posts

201 months

Thursday 5th March 2015
quotequote all
sidicks said:
DSLiverpool said:
£30k in a one year ISA or if you have a small appetite for risk £30k in one of these (or two)
http://www.telegraph.co.uk/finance/personalfinance...
You may lose the lot or make enough for a supercharger - its a risk.
1) maximum investment into an ISA is £15k p.a.
2) anyone considering a £33k car should probably already have used their ISA allowance for the year
3) anyone with a one year or less time horizon and like be mad to consider the volatility (and downside risk) of equities.

Apart from that, great advice...
frown
1) Now and next month
2) Nope "Currently the money sits in an offset Mortgage account saving me £40/month off the mortgage payments. Could I be doing something better with it?"
3) Not saying its risk free but Woodford made me 10% and more if I would have stayed in, dogs of the ftse made me 5.7% plus my response was semi light hearted as I am never very serious as lifes too short ;o)


sidicks

25,218 posts

220 months

Thursday 5th March 2015
quotequote all
DSLiverpool said:
1) Now and next month
Fair enough!

DSLiverpool said:

2) Nope "Currently the money sits in an offset Mortgage account saving me £40/month off the mortgage payments. Could I be doing something better with it?"
That does not mean he hasn't used his ISA allowance already

DSLiverpool said:
3) Not saying its risk free but Woodford made me 10% and more if I would have stayed in, dogs of the ftse made me 5.7%
It sounds like you don't really understand the nature of equity risk if you think your anecdotal experience is relevant or useful!

DSLiverpool said:
plus my response was semi light hearted as I am never very serious as lifes too short ;o)
I'm guessing the OP was after some genuine, useful ideas...,

croyde

Original Poster:

22,701 posts

229 months

Thursday 5th March 2015
quotequote all
Woodford seems to have a very good track record and I do have this year's allowance left to use.

DSLiverpool

14,670 posts

201 months

Thursday 5th March 2015
quotequote all
croyde said:
Woodford seems to have a very good track record and I do have this year's allowance left to use.
In all honesty and being a no nothing dullard (who made more this year myself and my FA did the last 2 after charges) I pulled out of Woodford last week but after the election I am going back in as my thought process is the market is high, it might go higher but I think it will drop as the election may be messy and once the dust has settled I may be able to buy back in cheaper than I cashed out at - seems sensible to me but my FA tells me its not the way to do it.