Best way to buy car?

[GG89]

Hi guys, for the last 10 years or so I've leased cars had some very good deals but that game is well and truly finished now prices are wild so im looking at buying something nice for a couple of years I've got a van and truck for work so it will purely be weekend and evening toy, looking at rs4 or M3 for around 40-50k - what is the best way to buy at the moment? the interest seems quite high on the online calculators. I'd be looking to put down 15/20k and finance the rest unless theres a better way? Cheers

[Pickle_Rick]

Best way is to save up, and then if dealer offers a finance contribution to take their finance product do that, and pay it off immediately, otherwise just pay cash if no difference in price. Then replenish savings from what you would have spent each month on finance

10%+ Apr is ridiculous just to try and and impress the neighbours.

[Trevor555]

RS4 & M3?

I'd be taking the dealers finance, even if a small amount.

It gives you so much more leverage if things go wrong.

Then just settle it after 6 months if not required.

[drgoatboy]

This is the problem. If you go 2nd hand interest rates are generally rubbish! You'll generally struggle to get much better than 7-8% and a lot of places will be worse with most being closer to 10%.

Some dealers do have "special events" where better rates or deposit contributions are available but it's not a given and even then it doesn't improve much.

It makes 2nd hand expensive if you really need to PCP.

I recently bought a car and used a new credit card to get 0% on purchases for I think 12 months. But obviously there is a limit to how much credit you can get and not a lot of dealers will not take large credit card payments.

Bank loan will get you better interest rates but obviously you have to fund the whole lot without the balloon payment so monthlies are higher (even if overall cost is lower).

[davek_964]

drgoatboy said:

This is the problem. If you go 2nd hand interest rates are generally rubbish! You'll generally struggle to get much better than 7-8% and a lot of places will be worse with most being closer to 10%.

I looked at an approved used BMW yesterday and the BMW finance is stated as 13.9% APR. In addition to the one year warranty for approved used, BMW will give you an additional "free" 2 years - if you take out their finance for at least 6 months, on at least £13k (that amount may vary from car to car I suppose).
Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

[Trevor555]

davek_964 said:

Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

[davek_964]

Trevor555 said:

davek_964 said:

Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

As I said, for the car I was looking at (£34k) - the minimum finance amount to qualify for the extra warranty was £13k. Over 6 months, I work that out as marginally under £1k in interest - so essentially you're paying £1k to extend the 1 year warranty to 3 years.
Whether that's a good deal or not I don't know.

[ChrisH72]

If you're planning to pay it all off over the term I'd go with a personal loan rather than dealer finance.

I know we are all different buy if I was putting down 20k upfront I would be buying a 20k car as that will still buy you a really nice motor these days. In fact I did do that last year and bought a very lightly used mx5 with just 4k miles on it.

Can you get an M4 for 20k yet? If not I bet they're not far off.

If you'd rather have a more expensive and newer car you may get a better deal by going 20k deposit and PCP.

[drgoatboy]

Trevor555 said:

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

Yeah most dealers won't let you do a tiny finance on an expensive purchase, tried that a few times when I've been looking.

Also worth noting you pay interest on the full amount including any balloon payment even if you never intend to buy the car at the end of a PCP term.

[drgoatboy]

davek_964 said:

I looked at an approved used BMW yesterday and the BMW finance is stated as 13.9% APR. In addition to the one year warranty for approved used, BMW will give you an additional "free" 2 years - if you take out their finance for at least 6 months, on at least £13k (that amount may vary from car to car I suppose).
Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

13.9% really is taking the piss. Even cinch is cheaper than that.

https://www.cinch.co.uk/used-cars/bmw/m4/details/0...

M4 convertible on there, a 36month PCP with a £20k deposit on a £60k screen price means you pay over £12k in interest at 11.4%.

With deposit and monthlies that £38k after 3 years. Ouchy. And then £600 a year tax so that's £40k.

Lease loco have M3 deal which works out around £34k over 3 years...

[Trevor555]

davek_964 said:

Trevor555 said:

davek_964 said:

Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

As I said, for the car I was looking at (£34k) - the minimum finance amount to qualify for the extra warranty was £13k. Over 6 months, I work that out as marginally under £1k in interest - so essentially you're paying £1k to extend the 1 year warranty to 3 years.
Whether that's a good deal or not I don't know.

For something like an Audi RS, or an M Bmw, I'd happily pay £500 per year for extra manufacturer backed warranty.

[davek_964]

Trevor555 said:

davek_964 said:

Trevor555 said:

davek_964 said:

Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

As I said, for the car I was looking at (£34k) - the minimum finance amount to qualify for the extra warranty was £13k. Over 6 months, I work that out as marginally under £1k in interest - so essentially you're paying £1k to extend the 1 year warranty to 3 years.
Whether that's a good deal or not I don't know.

For something like an Audi RS, or an M Bmw, I'd happily pay £500 per year for extra manufacturer backed warranty.

I don't know how much extending the warranty costs (this was a Z4 M40i) - it may well be cheaper doing it via finance. Personally, I'm not sure I'd want to take out a loan I don't want at an inflated interest rate just to get it though unless it was a very significant difference. I dislike debt.

[Andy665]

Simple answer is that there is no "best" way, only the best way for you at that moment in time. I have bought cash, bank loan, PCH, PCP - all considered decisions based on the situation at that time and taking into account:

Car
Age of car
Annual mileage
Savings
Income
Disposable income
Upcoming big events (that could soak up cash)
Vehicle usage and potential for it to change
Expected length of ownership

[Deep Thought]

Trevor555 said:

davek_964 said:

Trevor555 said:

davek_964 said:

Extra 2 year warranty is nice to have - but 6 months at almost 14% on £13k is quite far from free.

£2000 on finance, settled at 6 months is around £80 to £100 in interest?

Well worth the extra leverage you'll have if you need to force a repair, or refund.

As I said, for the car I was looking at (£34k) - the minimum finance amount to qualify for the extra warranty was £13k. Over 6 months, I work that out as marginally under £1k in interest - so essentially you're paying £1k to extend the 1 year warranty to 3 years.
Whether that's a good deal or not I don't know.

For something like an Audi RS, or an M Bmw, I'd happily pay £500 per year for extra manufacturer backed warranty.

Take the dealer finance and the incentives, then clear it with a cheap bank loan shortly after. (theres a min time, think its 14 days).

[Pica-Pica]

Pickle_Rick said:

Best way is to save up, and then if dealer offers a finance contribution to take their finance product do that, and pay it off immediately, otherwise just pay cash if no difference in price. Then replenish savings from what you would have spent each month on finance

10%+ Apr is ridiculous just to try and and impress the neighbours.

Is the right answer.

[davek_964]

Deep Thought said:

Take the dealer finance and the incentives, then clear it with a cheap bank loan shortly after. (theres a min time, think its 14 days).

For BMW you can't. It clearly states the finance has to be there for at least 6 months. If you pay it off before that - whatever way - you can kiss goodbye to the extended warranty period you just got "for free".

[Deep Thought]

davek_964 said:

Deep Thought said:

Take the dealer finance and the incentives, then clear it with a cheap bank loan shortly after. (theres a min time, think its 14 days).

For BMW you can't. It clearly states the finance has to be there for at least 6 months. If you pay it off before that - whatever way - you can kiss goodbye to the extended warranty period you just got "for free".

Apologies - missed that.