Your Thoughts Please, on savings

RoxRoxBling

I'm about to buy a car with my savings, the retail price is within the limit I wanted to spend, so that's fine. The additional costs, tax and gap insurance is ok, as the money is coming out of my savings but technically I can replace that money when I sell my current car.

What I'm thinking twice about is the insurance. I will pay this with the remaining money in my savings. Only problem is, after this has been paid, I've only got a little left in my savings.

Although I'll be fine as I'm getting paid monthly, (and will not enter debt) I feel as though for a few months I won't have the security of having savings. This lack of security makes me feel a bit 'uneasy' So should I have to pay a big amount in an emergency I'm screwed..

So my question is, am I silly for doing this? What are your thoughts and what would/have you do?

opinions4u

Save for an extra couple of months to build up a cushion that won't be used for car purchase.

RoxRoxBling

I would, but in all honesty I'm not too sure if my current car will last a little longer without massive of repair bills..

Rob_192

Personally, I would never buy a new car, the depreciation is just too much for my liking.

I have had new cars in the past when my company used to buy them and I can fully understand the appeal, but they aren't new for long and I for one would rather save my money buying second hand.

Obviously somebody has to buy new in order for there to be such a thing as second hand, but if you really want to get value for money then buy s/h and then run it for years and years.

Failing that, make sure you drive a very hard bargain with the dealer!

R

innovate

Rob_192 wrote: »

make sure you drive a very hard bargain with the dealer!

Definitely!

Nobody ever pays a recommended retail price for a car.

http://www.whatcar.com/car-advice/glossary/H
http://www.autotrader.co.uk/advice/2010/07/buying/haggling-with-sellers
http://www.whatcar.com/car-advice/buying/how-to-haggle/3141773


Martin's "haggle on the highstreet", although not about cars, also might give you some ideas.

booter

I agree with all the advice given so far - esp the haggling! If your concern is that the insurance cost will deplete your savings, although it's not very money saving (unless you can get 0% apr), what about spreading the insurance cost over 12 months instead of paying it all up front?

Hooloovoo

RoxRoxBling wrote: »

I feel as though for a few months I won't have the security of having savings. This lack of security makes me feel a bit 'uneasy'

If buying the car will all-but wipe out your savings, then IMHO you can't afford the car.

Could you look at something cheaper?

I agree with the other posters, try looking for something "nearly new" where someone else has already taken the initial hit.

I've just bought a "new" car myself. It was two months old and had 139 miles on the clock! The first owner bought it and then decided they wanted the new model of this car instead, so immediately traded it in! I got a £19.5k car for £14k! And I still also managed to haggle the price up for my trade in to nearly £5k even though the book-price was more like £4.5k. Bargain of the year! [:rotfl:]

RoxRoxBling

Rob_192 wrote: »

Personally, I would never buy a new car, the depreciation is just too much for my liking.

No where on this thread have I said that I am buying a NEW car. I too am aware of depreciation..
And I am planning to buy second hand (from a dealer) and run it for years and years (or as long as it'll last)

And in all honesty, I did not start this thread for your opinion on what car I should buy..

Nearly_Old

I think that it really depends on other factors that we don't know: e.g. single, living at home, secure job, etc then running down the savings for a month or two is really a calculated risk. However married, mortgage, children, etc then IMHO it could considered to be a much greater (i.e. unacceptable) risk.

RoxRoxBling

Hooloovoo wrote: »

If buying the car will all-but wipe out your savings, then IMHO you can't afford the car.

Yes and no to affordance. General day-to-day will be fine. But an emergency big pay out (although unlikely) will not. My concern is instant access savings (because I have a fair bit put away in a fixed term which I have no access to currently) It's that emergency money I won't have.

So, IYHO if the one purchase (and additional costs) is going to take my instant savings then I'm doomed, and I'm better to not spend..

Hooloovoo

RoxRoxBling wrote: »

No where on this thread have I said that I am buying a NEW car. I too am aware of depreciation.

To be pedantic and play devils advocate, you did say "retail price" which is an unusual term to use for used cars. You didn't say "new" but that's how I and it seems others have read it. Easy mistake to make.

RoxRoxBling wrote: »

But an emergency big pay out (although unlikely) will not.

So if the emergency big pay out is required, what will you do? What are your plans?

So, IYHO if the one purchase (and additional costs) is going to take my instant savings then I'm doomed, and I'm better to not spend..

Yes, that's pretty much it. My personal opinion is that when making a purchase you should look at the cost versus the percentage dent it makes in your savings. For me, anything that's going to make a 50% dent in my savings I would have to think long and hard about. Something taking 99% would be out of the question.

If you're happy with a purchase taking 99% of your savings, then that's absolutely fine. To be honest it sounds like you have already made your decision and just want people to validate it for you.

So, yes, go ahead and buy the car.