how does everyone finance a car?

Feanor

Hi all,

I was wondering how best to finance a car? We would like to get a 1/2 year old Ford Focus ST which seem to range from £13-15k. We both work full time, earn good wages and have a good amount leftover every months for luxuries. I have a 02 Fod Fiesta, that has only got 15,000 miles on the clock and was own from new by my aunty before me. Ideally we would like to keep that as a second run around because it is in such good condition..

Whats the best thing to do...get a loan for the whole amount but then rish the car depreciating in value and owing more than the car is worth?

Put 2/3k down as a deposit and the rest on the loan? I am so confused!

We would probably only want the car for 2/3 years max, so is leasing the best idea? Does anyone have any experience of leasing?

Thankyou!

epz_2

i pay cash, cant afford it then dont buy it but then i am lucky in that i hate the look of modern cars so almost every car i want will be under 5k

colin79666

How about wait a year and save up a bit each month so you can pay at least half of it from the start.
Alternately get a car that's cheaper...

HenryWeston

Feanor wrote: »

£13-15k.

Its madness to spend that much on a car, especially if you have to borrow it:eek:

Feanor

Thanks for the replies..

I wouldn't need to save up or borrow it, i have alot of savings so thats fine..but i was just wondering what is the best way to do it as cars seem to lose their value so quickly, so would like to get the best deal.

Thanks again for your very useful judgemental comments

pinkfluffybabe

Martin's attitude is that if you can afford something and you get a good deal for it then that is fine, so no need to slate someone for wanting a £13k car.

When I bought my latest car at the start of this year, I had half of the money saved plus my old car as deposit. I opened an M&S 3.9% balance transfer credit card, balanced transferred the money I needed onto my Egg card and from there into my current account. I then switched the card with chip and pin.

So rather than a car loan at say 5% +, I have one for 3.9% until it is paid off (and I can pay extra without penalty). If you can afford to buy it outright, then think about how much interest you would pay if you took it out on credit versus how much interest you would get on that same money sitting in your bank account.

I don't know anything about leasing but if you are planning to trade in a couple of years, then you will still have value left in the car when you come to trade it which can be taken forward to the next car.

I usually look at Parkers.co.uk for car prices to get an idea of what the three year value is which will tell you how much is is likely to depreciate in that time.

Best advice I can give is to look at all the options, use Martin's articles and make the best decision you can based on all the information you have gathered.

colin79666

Well if you can pay for it up front then that;s probably the best way to pay for it - unless of course you can get a 0% finance deal.

thescouselander

I've just bought a car for £12k - here's how I've done it.

Old car trade-in value - £3500
Saved a further £2000

Then put the rest on an un-secured personal loan at the cheapest rate I could find. I plan to change the car again in 3-4 years so I've arranged the re-payments to finish around then.

I looked into leasing but, unless you can get the VAT knocked off (ie you own a business) then it seems like an expensive option.

Conor_3

Ford Finance is currently around 3% but I'm not sure if it only applies to new cars.

ADEY_3

I'd wait till the car was at least 4 years old then it would have lost its initial chunk of depreciation if you are bothered about the date on the plate get a cheap age hiding reg number

goldspanners

look after the st,as its top of the range it will always hold better value than the 1.6 or the 1.8 as it is more desirable.so when you go to sell it in mint condition you will get more back for it than the guy who has thrashed his.

every car will loose money nobody buys cars as an investment.
if you can afford to pay for it up front then do so,it saves you paying interest on your loan or finance.
dont listen to all the others above me,the focus st is a beautiful car,it handles and drive amazingly,ok it cost more to run,but if you enjoy it and can afford it then go for it.
(a jelous goldspanners)