Best for Savings

teddysmum

jack_tyler wrote: »

Thankyou for the replies. To kingrulzuk, I was thinking about £25,000 - £30,000.....to Eco Miser, I have considered paying cash for the car, but I have been told by a few people that this wouldn't be the best idea because once that money has gone, its gone.....where as if I pay the car via finance, I will still have my initial amount....to be honest im totally confused as to what would be the best way to buy the car

If you pay cash for the car, you are likely to be able to do a deal with the garage, either on a price reduction or free upgrade, but unless there is 'free' finance (probably factored in by a higher list price) you will actually pay a lot more than the windscreen price, the interest rate being higher than savings will earn.


'Once the money has gone it's gone' - The thinking seems to be that once paid out you can't have the money back to use for something else, but if you sign an agreement to buy, your money is committed anyway and failure to pay ends in repossession while still having a debt to pay, so you can't afford to spend the money elsewhere.


'still have the initial amount'-Yes, you would physically have the money, which could earn interest as savings , but this will be less than any interest included in credit payment calculations.


Credit buying suits people who do not have the full cost to pay outright, but they end up paying more over the loan period (3 years?) ; just do the maths for the difference between cash price and 36 instalments plus deposit.


Another consideration is the possibility of an accident with a write off, as the cost of the finance, which you will still have to settle, is not included in the compensation from the insurer.

jimjames

newuser78 wrote: »

Can you get a credit card with 0% interest rate? So buy a car with that, you are protected and as long as you make minimum monthly payments, you could pay off the loan (clear balance) before the 0% deal expires.

Very unlikely a dealer would accept payment by card for the whole car or would charge some large fee to do so.