Used Purchase - Bank Loan Question??

[SiT]

Ok so over the years I have used the good old high street bank loan to facilitate buying a new (used) car, I used finance once through Peugeot when I was young and naive and swore blind I would never use it again!

Over the years I have built up a good credit rating so have access to the advertised rates of 3-3.5% from different lenders. I am currently between cars and looking to purchase around the £25k mark which will be the most expensive car I have bought so want to make sure I do it right.

Is there a rule of thumb regarding how much % wise people recommend you should put in of your own cash, I realise a lot of people will say 'as much as possible' but with other stuff going on (house improvements, Disney Holiday) I don't want to use it all so figured I would ask peoples advice.

Fully intend to buy privately, just got burnt buying an X5 from BMW only to sell 6 months later and lose significantly which is to be expected. The car will be a weekend toy as well if thats relevant so won't see heavy use in terms of mileage and wear/tear which will hopefully have a positive effect on depreciation.

Welcome peoples opinions.

Si

[supercommuter]

Not really. Put as much deposit down as comfortable that brings the monthly payments to a affordable (to you) amount.

There is a balance on the amount paid in interest vs how much you would like to retain in cash that only you will be able to balance.

Personally if I was buying a £25k I'd put £5k down and pay like £420 a month.

[SiT]

supercommuter said:

Not really. Put as much deposit down as comfortable that brings the monthly payments to a affordable (to you) amount.

There is a balance on the amount paid in interest vs how much you would like to retain in cash that only you will be able to balance.

Personally if I was buying a £25k I'd put £5k down and pay like £420 a month.

Thanks for your response, I have seen so many threads on here with people dishing out financial advice I wondered if there might be some calculation or rule of thumb to bear in mind.

I was thinking along the lines of what you suggested to be honest, £5k down means I can retain some capital for other stuff I need to do.

Well the shopping starts soon which will be exciting.

Thanks for your post.

Si

[The Cardinal]

When buying a car at £25k, the main cost will be depreciation - unless it's something very unusual. Depending on how long the loan is and how long you will keep the car, I think you're looking at saving a tiny fraction of the whole cost by playing with the ratio of cash to loan.

You mentioned it will be a weekend toy and (?) not used a lot. I would personally consider spending less, as this will save you a lot more than the above.

We bought a family van a few years ago. Since that time, I've spent a lot less on a run about / fun car than I could - because it's not used much and limits depreciation.

[Scootersp]

With interest rates so low, I would put down enough cash so that in a stress sales situation (immediately after purchase) you can always get back enough to clear the loan. If you are careful and good with money you won't blow the remainder on 'stuff' and then you can always pay off early if you wish at some point down the line.