How do I pay for my new car?

stumblingtrout

I have a new car coming later this week.

I did originally apply to finance it, but am wondering whether I would be better off paying cash for it (or not?)

I'm not sure, and need someone else's perspective.

The car is £49,031. I'm trading in my current one for £28,500 and have £4,000 saved towards the cost of the new one - meaning the difference is £14,531.

I had agreed to pay £436.96pcm for 3 years (6.8% APR 5.4% Fixed effective interest rate.)

Charge for credit would be £1,522.81 compromising of £1,198.81 interest, credit arrangement fees of £174.00 and £140.00 and a purchase fee of £10.

I have £40,000 in savings towards our next house. We are unlikely to move for a while as we only moved in here last year and are so far very happy.

I have £20,000 in a Santander 123 Current Account earning 3% which is £592 per year. I am a basic rate tax payer so that would earn me £1,420 over 3 years (is that right?)

That being the case, surely I might as well take the finance agreement as the cost of interest is pretty much what I would lose in interest by financing the car out of savings?

What would you do?

Cheers,

ST.

Vikipollard

I wouldnt spend that much on a car!

stumblingtrout

Vikipollard wrote: »

I wouldnt spend that much on a car!

I get enough of that from the Mrs!

McKneff

How Much:eek::eek::eek:

Dogger69

What does a £50K car do that a £30K does not?

eschaton

Unless it is cheaper to use finance then I would use cash as the loan amount has to be paid anyway so no point paying more than you need to.

The car i am looking at the now is just over £34k but I don't have a moaning wife to worry about

stumblingtrout

*Sigh*
I like cars, its the one I wanted, and I'm in a position to afford it now and might not be in the future - you only live once!

Dogger69

stumblingtrout wrote: »

*Sigh*
I like cars, its the one I wanted, and I'm in a position to afford it now and might not be in the future - you only live once!

Sorry, I think you need to put this in perspective. You might have children in a year's time, or fall ill. Spending money just because you've got it is not moneysaving.

How much is a second hand model? Remember yours will be second hand the minute you leave the showroom

stumblingtrout

Dogger69 wrote: »

Sorry, I think you need to put this in perspective. You might have children in a year's time, or fall ill. Spending money just because you've got it is not moneysaving.

How much is a second hand model? Remember yours will be second hand the minute you leave the showroom

I got £10k off through a scheme we have with work, and the way I wanted to configure the vehicle would have meant that there was very little chance of one coming up second hand. They hold their value well, so the difference in price after discount would have been negligible.

I know it's not money saving - but it's something I wanted to do and whilst i could have gone out and bought something for £20k or £30k, I've aspired to own this particular car. I'm in a secure job, we have no mortgage and we have savings behind us for any unforseen circumstances. So I really just wanted advice on which of the two options in my original post would be better...!

eschaton

Dogger69 wrote: »

Sorry, I think you need to put this in perspective. You might have children in a year's time, or fall ill. Spending money just because you've got it is not moneysaving.

How much is a second hand model? Remember yours will be second hand the minute you leave the showroom

Everything is not about moneysaving.

I'm very careful with cash and don't waste it. It means that I am then able to spend what I have saved on what I want when I want.

I wouldn't spend £50k+ on a car because I can't afford to. If I could then I probably would.

eschaton

stumblingtrout wrote: »

I got £10k off through a scheme we have with work, and the way I wanted to configure the vehicle would have meant that there was very little chance of one coming up second hand. They hold their value well, so the difference in price after discount would have been negligible.

I know it's not money saving - but it's something I wanted to do and whilst i could have gone out and bought something for £20k or £30k, I've aspired to own this particular car. I'm in a secure job, we have no mortgage and we have savings behind us for any unforseen circumstances. So I really just wanted advice on which of the two options in my original post would be better...!

Spend your cash on what makes you happy - and as previously mentioned, take the cheapest option.

Enjoy the new car