Car Purchase to HP or not to HP! That is my Question!

sdm197

Hi All

I have a question, I am just about to buy a car, I have the money in the bank to buy it outright, but some people have said leave that money in a high interest account at 6% approx and use finance.

Now I am a little confused, surley the rate on savings will be lower than the finance charge, so I will be losing money. However people say yes but you have the comfort of having that money in the bank.

I do too many miles to consider a personal contract plan, or lease (approx 30K miles a year)

So its HP or buy it outright I think.

I would be very happy to read what others think on this,

Best Regards

Steve.

CLAPTON

basically its about

a. what interest rate you will be paying on the loan?
b. what interest rate are you currently getting on your savings?

usually unless there is a special deal you pay a lot more for a loan than you earn on the savings.... and even with special deals you can often negotiate a better price if you don't take a discounted loan.

Use you savings.