Car Advice: Leasing v Credit Card Repayments

AdrianC

Totally ignoring the actual question here, there's one thing that leaps at me from the original post...

You're using a credit card balance as a loan - for ten grand...? TWO AND A HALF YEARS AGO? At £65/mo, that'll take you nearly thirteen years to pay off - WITHOUT taking interest into account... What APR is that card?

Strikes me as quite possibly the single most expensive way to do it, short of a payday loan... If you don't have better finance options available, then you can't afford a BMW. That simple.

Never mind worrying about which lease will save you a couple of quid a month, your first priority is to sort the bloody plastic out.

stucosby

AdrianC wrote: »

You're using a credit card balance as a loan - for ten grand...? TWO AND A HALF YEARS AGO? At £65/mo, that'll take you nearly thirteen years to pay off - WITHOUT taking interest into account... What APR is that card?

I'm on my fourth 0% interest credit card. I switch as I'm nearing the end of the 0% interest term. The only charge (other than the £65 monthly payment) is sometimes a balance transfer fee.

As I said in the original post, I ocassionally pitch in a few hundred pounds to chip away.

Doing things this way is much cheaper than getting a traditional loan or finance.

BeenThroughItAll

stucosby wrote: »

I'm on my fourth 0% interest credit card. I switch as I'm nearing the end of the 0% interest term. The only charge (other than the £65 monthly payment) is sometimes a balance transfer fee.

As I said in the original post, I ocassionally pitch in a few hundred pounds to chip away.

Doing things this way is much cheaper than getting a traditional loan or finance.

But a lot more expensive than simply buying a car you can afford to run in the first place, I'm afraid.

LM9

I lease a car because it is the cheapest way of driving a brand new 30k car over a couple of years. My advice to you is to run the maths on buying versus leasing - webuyanycar.com and similar are a good indicator of what your car would be worth, I looked on dealer sites for 3,5,7 year old equivalents and ran the reg through the car sites using a realistic mileage. Then Knock about 10% off the estimate for a realistic valuation.

One thing that troubles me about your post is that you don't want to take a 3/4 year lease because you want to buy a house in 2 years. So what do you expect to do about transport when your lease expires?

bowlhead99

AdrianC wrote: »

Totally ignoring the actual question here, there's one thing that leaps at me from the original post...

You're using a credit card balance as a loan - for ten grand...? TWO AND A HALF YEARS AGO? At £65/mo, that'll take you nearly thirteen years to pay off - WITHOUT taking interest into account... What APR is that card?

This is after all a money saving expert site. I applied to Virgin a month or so ago using one of the long interest-free offers. £9500 on the card attracted a £284 fee and incurs no further interest charge unless the balance is outstanding on the statement date on or after the xth of April 2019. Yes that's right, a one time 2.99% fee in lieu of all interest charges on the £9.5k borrowed for 40 months.

By contrast, a £9500 loan from Sainsburys, paying interest at a very competitive-sounding 3.4% APR on the declining balance would have been a total interest cost of £500 over 36 months or about £600 if running it over 42 months. Basically double the cost even though it required paying down much faster. Aside from the expense, it would have required more cash per month to be handed over to the bank, rather than letting it work for me within my own savings or investments until payback was required.

Strikes me as quite possibly the single most expensive way to do it, short of a payday loan... If you don't have better finance options available, then you can't afford a BMW. That simple.

Never mind worrying about which lease will save you a couple of quid a month, your first priority is to sort the bloody plastic out.

Having done the sums, credit card finance might be the single cheapest way to do it, short of nothing, and certainly cheaper than a 1000% APR payday loan. How I choose to run my finances does not mean I can or can't afford a BMW, but being financially savvy enables me to make the most of opportunities available to me. That simple.

(For the avoidance of doubt, am not a BMW driver)

AdrianC

0% on balance transfer...?

<edit>
http://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards#nofees
Furry muff. They do exist, and for surprisingly long periods. I'm surprised. I thought they'd stopped those kind of deals years ago, and they wouldn't be back.

Maybe stoozing is back on again...

bowlhead99

AdrianC wrote: »

Maybe stoozing is back on again...

Stoozing got a bit scuppered because everyone started putting fees on, and a 3% fee for 6 months was pretty expensive in APR terms.

But as you can see, there are now some 0% rate, 0% fee deals. Although in this age of 'affordability checking' mandated by the regulator on property transactions and the corporate governance environment within banks looking to be 'responsible lenders' they might not offer you a sky high credit limit if they're not guaranteed to get a fee OR any interest from you... but banks are much happier to lend now than they were in the depths of the credit crunch when stoozing first ran aground.

As your link showed, with zero fee you can get almost two years without interest, but if you pay a fee, you can get three or more!

stucosby

BeenThroughItAll wrote: »

But a lot more expensive than simply buying a car you can afford to run in the first place, I'm afraid.

That's a very simplistic view you have. I need a reliable car to get to and from my place of work. I want a slightly nicer car to do this in comfort. Are mortgages a bad thing in your eyes? What about holidays? Camping in the garden again?!

BeenThroughItAll

stucosby wrote: »

That's a very simplistic view you have. I need a reliable car to get to and from my place of work. I want a slightly nicer car to do this in comfort. Are mortgages a bad thing in your eyes? What about holidays? Camping in the garden again?!

No, it's not simplistic at all. It's realistic. You bought a BMW you basically now can't afford to repair. Cheap BMWs still have BMW running costs. If you can't afford to pay to repair a BMW, buy something you can afford to pay to repair, or learn how to repair it yourself.


I NEED a reliable car. I WANT a nice car. I don't spend 10 grand on my credit card to buy one though, I spend two grand from my savings, look after it myself, and change it when I get bored (6-12 months on average). I've had BMWs, Audis, VWs, Volvos, Skodas, Subarus, Jeeps, Saabs, and a variety of others.


Contrasted with your situation, I can afford to buy brand new cars and pay to have them repaired - I choose not to though, because I'd rather be able to change my car often and suffer virtually no depreciation, and because I'd rather spend my money on paying off my mortgage more quickly.


Holidays? I take my motorhome all over Europe.

AdrianC

stucosby wrote: »

Are mortgages a bad thing in your eyes?

Are houses depreciating assets?

You may need to do a bit of a look at Maslow's hierarchy of needs...