Best way to fund a private car purchase?
Discussion
Due to purchase a vehicle for £20k, albeit a private sale.
Was looking to fund via my employer (4% flat on PCP’s) but they only work with dealers or are able refinance existing HP/PCP agreements.
My question, how is the best way to fund the vehicle so I can benefit from my employers low rates?
Was looking to fund via my employer (4% flat on PCP’s) but they only work with dealers or are able refinance existing HP/PCP agreements.
My question, how is the best way to fund the vehicle so I can benefit from my employers low rates?
https://www.moneysupermarket.com/loans/personal-lo...
A low interest personal loan over a slightly longer period is generally cheaper than a PCP
A low interest personal loan over a slightly longer period is generally cheaper than a PCP
SSG1000 said:
Due to purchase a vehicle for £20k, albeit a private sale.
Was looking to fund via my employer (4% flat on PCP’s) but they only work with dealers or are able refinance existing HP/PCP agreements.
My question, how is the best way to fund the vehicle so I can benefit from my employers low rates?
I've not financed anything like that for a while, but 4% flat doesn't sound that great does it?Was looking to fund via my employer (4% flat on PCP’s) but they only work with dealers or are able refinance existing HP/PCP agreements.
My question, how is the best way to fund the vehicle so I can benefit from my employers low rates?
I think Zenith will finance private purchases, if you get a warranty.
2 sMoKiN bArReLs said:
I always saved up for mine. (My mum told me never to buy something I couldn't afford).
....mind you, I spent several decades driving proper rubbish
Your mum was right. You shouldn't buy a car you cannot afford to buy in cash. Then you should buy it with some finance.....mind you, I spent several decades driving proper rubbish
Louis Balfour said:
Your mum was right. You shouldn't buy a car you cannot afford to buy in cash. Then you should buy it with some finance.
Run me through this if you don't mind. I've always thought this was the right way to do it, but I can't work out why. I need to make this decision soon, following this mantra, I have my new rs6 on order and have the cash in the bank for it, but was wondering if financing it might actually be a better option? I don't mind if you wanted to PM me to not derail this thread. Thanks in advance Technoholic said:
Louis Balfour said:
Your mum was right. You shouldn't buy a car you cannot afford to buy in cash. Then you should buy it with some finance.
Run me through this if you don't mind. I've always thought this was the right way to do it, but I can't work out why. I need to make this decision soon, following this mantra, I have my new rs6 on order and have the cash in the bank for it, but was wondering if financing it might actually be a better option? I don't mind if you wanted to PM me to not derail this thread. Thanks in advance You don't really want to have a lot of cash tied up in a car, if you've got better things to do with it. Sometimes dealers charge such low interest rates that its worth paying over time using finance.
But the biggy is that if you finance a car (directly, not with a personal loan) the finance company is liable for the car being satisfactory as much as the dealer. This firstly encourages dealers to do the right thing and if that fails the lender tends to sort things out. This has worked well for us several times, over the years.
Technoholic said:
Run me through this if you don't mind. I've always thought this was the right way to do it, but I can't work out why. I need to make this decision soon, following this mantra, I have my new rs6 on order and have the cash in the bank for it, but was wondering if financing it might actually be a better option? I don't mind if you wanted to PM me to not derail this thread. Thanks in advance
I read something from Martin Lewis where he said it drives him mad when people take a loan when they can afford something with cash as you’re wasting money. I can understand why you would though, you can sometimes get better deals if you take dealer finance but maybe you could consider paying it off immediately after purchase
I totally get that but I just bought a new car at 2.8% which works out £500 total interest over 4 years... that's absolutely nothing. I have money in premium bonds I could have used for a straight purchase, but I like having them maxed out. I tend to get around £600 per year from them, so in theory over those 4 years I'll gain around £2,400 interest which covers the interest and then some. I know it might not have total relevance as premium bonds are random winnings, but it made sense to me (also, I know that if I took them out, I'd have a hard time ever repaying them back in)
I just bought a new electric car and found financing the car on a personal loan works out a fair bit cheaper for us than "traditional" finance methods. I still did a "deposit" in that Ipaid a good-ish amount of cash up front to reduce the amount of loan. The loan was over a reasonably long time too to reduce monthly payments and based on PCP "future values" if I decided to sell I should be fine on equity. If I don't sell then I'll eventually own the car outright anyway.
CrippsCorner said:
I totally get that but I just bought a new car at 2.8% which works out £500 total interest over 4 years... that's absolutely nothing. I have money in premium bonds I could have used for a straight purchase, but I like having them maxed out. I tend to get around £600 per year from them, so in theory over those 4 years I'll gain around £2,400 interest which covers the interest and then some. I know it might not have total relevance as premium bonds are random winnings, but it made sense to me (also, I know that if I took them out, I'd have a hard time ever repaying them back in)
The average return on premium bonds is c. 1% so either your maths is wrong or you're very lucky 
Cascade360 said:
CrippsCorner said:
I totally get that but I just bought a new car at 2.8% which works out £500 total interest over 4 years... that's absolutely nothing. I have money in premium bonds I could have used for a straight purchase, but I like having them maxed out. I tend to get around £600 per year from them, so in theory over those 4 years I'll gain around £2,400 interest which covers the interest and then some. I know it might not have total relevance as premium bonds are random winnings, but it made sense to me (also, I know that if I took them out, I'd have a hard time ever repaying them back in)
The average return on premium bonds is c. 1% so either your maths is wrong or you're very lucky To the OP's question: it's worth seeing what personal loan rates you can get, because while the headline rates may be 2.8% not everybody will get these. It may be that the rate you can get is closer to 4% anyway, in which case if you have to borrow £30k you're as well doing it through your employer at 4%. If you can get the 2.8% then maybe see if you can get a 0% credit card to pay a £5k deposit and personal loan for the rest?
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