Take out finance or save up and just buy outright
Discussion
Dr Jekyll said:
The original point was 'how do people on modest incomes justify the depreciation', in other words the additional depreciation compared with a second hand car. So comparing with a new telly misses the point.
Is it really a question though? Or is the question really "he cant be on big money, how does he afford that?"I dont know of anyone on a "modest" income who drives a brand new car.
And if they do, and can afford it, who are we to question how they justify it to themselves?
otolith said:
Swallowing the first couple of years of depreciation on a car seems an extravagance disproportionate to the standard of living many people who do so enjoy.
Fine but who are you to judge what other people spend their money on? If they want a new car and can afford it, why not?
Maybe its important to them for some reason. Maybe next time they wont and they'll buy something used.
If they're happy, what odds? Should we be enforcing the "well you could live in a nicer house or go on an extra holiday if you didnt drive that car"? on others.
Also, i dont really think there are too many out there on modest incomes or otherwise who buy a new car for cash, drive it three years and chop it in for another.
A good friend of mine regularly spends around a third of his monthly income on his car. He loves cars and he loves his a car (a new Audi A3 Sportback TDi 140 S-Line with a few choice options). A lot of people would think he's crazy, but that's what he's chosen to spend his money on. Truth be told, if I could spend more money on my car then I would, but a mortgage, other outstanding finance, a wedding, holidays and general living costs dictate otherwise. I personally have nothing again taking out finance to buy things with, especially if the interest rate is good. If it's 0% finance, that's exactly the same as saving up to buy it, except you get the item up front...
What about taking finance to upgrade a car?
I am seriously thinking of betting a loan to have an engine upgrade on a 12 year old car - almost bought new last year, but there's nothing out there that I could afford to buy that I want (F-Type..). I could save up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
I am seriously thinking of betting a loan to have an engine upgrade on a 12 year old car - almost bought new last year, but there's nothing out there that I could afford to buy that I want (F-Type..). I could save up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
chris watton said:
I could save
up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
This is so very true. About 19onths ago I've asked my bank for a personal loan of just a 5k. In a first instance they refused because I don't have credit rating at all. Some 11 years ago was my last credit related payment, since than I was credit free, even when I use CC I pay it in full before the statement is even due.up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
Good think that I was banking with them for 15 years plus and the branch manager made some calls
I've got the 5k on 24 months loan, never the less I've paid the money back within 4 months. I just hate to be in debt.
chris watton said:
I could save
up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
This is so very true. About 19 months ago I've asked my bank for a personal loan of up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
just 5k. In the first instance they refused because I don't have credit rating at all. Some 11 years ago was my last credit related payment, since than I was credit free, even when I use CC I pay it in full before the statement is even due.
Good thing that I was banking with them for 15 years plus and the branch manager made some calls
I've got the 5k on 24 months loan, never the less I've paid the money back within 4 months. I just hate to be in debt.
Edited by pavka007 on Thursday 4th September 09:56
chris watton said:
What about taking finance to upgrade a car?
I am seriously thinking of betting a loan to have an engine upgrade on a 12 year old car - almost bought new last year, but there's nothing out there that I could afford to buy that I want (F-Type..). I could save up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
If you can confortably afford to finance an F-Type then just get on with it. By the time you've saved up you could have a terminal illness or event he car you were saving for could have been discontinued or all be old and knackered.I am seriously thinking of betting a loan to have an engine upgrade on a 12 year old car - almost bought new last year, but there's nothing out there that I could afford to buy that I want (F-Type..). I could save up for the upgrade, but having the occasional loan helps your credit rating, I think, and having no mortgage or loans means we look like we're off the radar!
Work out the cost and decide yourself whether it's acceptable or not. What anyone else thinks is irrelevant.
ETA- I misread that completely! I personally wouldn't use borrowed money to alter an existing car.
jamieduff1981 said:
ETA- I misread that completely! I personally wouldn't use borrowed money to alter an existing car.
Normally, I would completely agree - but when we're talking about a TVR S6 engine, and upgrading it from 3.6-4.3 and comes complete with a 5 year unlimited mileage warranty - and I want to drive it around Europe next year, it makes more sense - and it's one of those rare upgrades that will increase the value of the car (not that I'd ever sell it...). Already paid £6k for a full re-trim and other stuff...pavka007 said:
In the first instance they refused because I don't have credit rating at all. ... since than I was credit free, even when I use CC I pay it in full before the statement is even due.
That doesn't make sense - when you have a credit card you have credit - it's a flexible, open-ended loan.xRIEx said:
pavka007 said:
In the first instance they refused because I don't have credit rating at all. ... since than I was credit free, even when I use CC I pay it in full before the statement is even due.
That doesn't make sense - when you have a credit card you have credit - it's a flexible, open-ended loan.At least, that's my past experience, so having the odd loan now and again isn't so bad....
xRIEx said:
That doesn't make sense - when you have a credit card you have credit - it's a flexible, open-ended loan.
Having CC and having credit history are two entirely different things.If you don't use your CC or pay before is due, there is NO record of credit sort of speak. Bank can not apply interest to the amount used/borrowed so technically no credit is applied.
chris watton said:
jamieduff1981 said:
ETA- I misread that completely! I personally wouldn't use borrowed money to alter an existing car.
Normally, I would completely agree - but when we're talking about a TVR S6 engine, and upgrading it from 3.6-4.3 and comes complete with a 5 year unlimited mileage warranty - and I want to drive it around Europe next year, it makes more sense - and it's one of those rare upgrades that will increase the value of the car (not that I'd ever sell it...). Already paid £6k for a full re-trim and other stuff...So whilst I'd encourage the Speed Six upgrade, I'd save up and pay for that with cash personally
jamieduff1981 said:
chris watton said:
jamieduff1981 said:
ETA- I misread that completely! I personally wouldn't use borrowed money to alter an existing car.
Normally, I would completely agree - but when we're talking about a TVR S6 engine, and upgrading it from 3.6-4.3 and comes complete with a 5 year unlimited mileage warranty - and I want to drive it around Europe next year, it makes more sense - and it's one of those rare upgrades that will increase the value of the car (not that I'd ever sell it...). Already paid £6k for a full re-trim and other stuff...So whilst I'd encourage the Speed Six upgrade, I'd save up and pay for that with cash personally
I did think about this, as we are currently renovating our house too. I have to pay for the engine upgrade in one big lump, whereas the home improvements requires finance in easy bite-size chunks. It makes more sense for me to pay for the house stuff with cash, and pay for my P&J improvement on credit, if only to keep me on the credit radar.
Man-maths...
chris watton said:
xRIEx said:
pavka007 said:
In the first instance they refused because I don't have credit rating at all. ... since than I was credit free, even when I use CC I pay it in full before the statement is even due.
That doesn't make sense - when you have a credit card you have credit - it's a flexible, open-ended loan.At least, that's my past experience, so having the odd loan now and again isn't so bad....
pavka007 said:
xRIEx said:
That doesn't make sense - when you have a credit card you have credit - it's a flexible, open-ended loan.
Having CC and having credit history are two entirely different things.If you don't use your CC or pay before is due, there is NO record of credit sort of speak.
Say you can get credit cards with a £10k credit limit, and you apply for 15 cards - your total available credit is £150k - you could max out all credit cards in a couple of days and abscond to a foreign country, representing a high risk to the card companies.
On the other hand, they measure your total credit, see you have e.g. £20k credit available currently, and only offer another £4k based on your current circumstances - lower risk.
It's a balance of risk to the card (or loan) company, and how much money you might make them. If you pay off your balance every month then you make them no money whatsoever; miss one payment and you're charged £20 fee and e.g. £30 interest.
OK, you win.
I have a credit, but no "good" credit history.
Bottom line, I could make 1000 quid repayment per month with not a problem but according to the score system used from banks I couldn't qualify for even 5k loan.... This is not right in my book. The system is designed to get you in debt not to help you when you need a wee help
I have a credit, but no "good" credit history.
Bottom line, I could make 1000 quid repayment per month with not a problem but according to the score system used from banks I couldn't qualify for even 5k loan.... This is not right in my book. The system is designed to get you in debt not to help you when you need a wee help
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