Pay off finance or buy new car in cash?

samsam89

As the title suggests...

In my house we have two cars. One is on finance with around 3 years left to go and around £8k to pay off if we settle.

Our second car we own outright and has just started going wrong. It's worth maybe £1000 tops.

By the end of March our annual bonuses will roll in and our savings will total around £8k.

What would be the best course of action:

A. Buy new car using cash to replace the one going wrong and keep finance on other car.

B. Use cash to pay off finance on current car and buy new car with small deposit and smaller level of finance than we currently have on the main financed car.

I'm sure this seems obvious to some of you moneysaving gurus...?

ceredigion

The obvious answer is to keep the old car, stooze 8K @ 0% and then payoff the finance

AnotherJoe

Impossible to answer without knowing the ROI on the current loan and what offers there might be on a new loan.
And yes 8k is the sort of sum you could recycle over 0% cards.