My opinion about buying a car on finance

MEM62

'My opinion about buying a car on finance'

Lunacy. Paying interest to purchase an asset with a value that falls like a stone makes no sense at all. Buy with cash & run for as long as it is economically viable to do so.

silverwhistle

MataNui wrote: »

Sure, it would be nice if you didnt need to borrow but in reality we all borrow for a house. Also i dont think its that different. Sure, cars will depreciate but not so many years back a lot of people were (and some still are) living with negative equity in the tens of thousands because of loans for a house.

No, I disagree. I may have had negative equity at one stage (or perhaps I didn't, not sure), but it didn't matter as I didn't have to move. I also bought a house, at 28, before buying a car, and that was a £100 banger (or £500, say, in current prices). You always need somewhere to live but you don't always need a car, as my experience shows.

Both my last cars were sold at around 12 years old, and neither from a desire to change or unreliability, but purely from international moves and the cost and bureaucracy of transferring registrations. Both were small hatchbacks but capable, full to the brim, of taking me to and from the Alps every year. By the time I get my next car in 4 or 5 years time there should be a healthier second-hand market in electric and hybrid cars, and I'll be paying cash again.

tempus_fugit

rs65 wrote: »

My post was in response to the point by the poster that you need a large deposit every so many years.

The video isn't about PCP, its about his sister spending money she doesn't have.

I don't see the problem with PCP. A car depreciates however you choose to pay for it. I have one on PCP and one owned outright. They are both depreciating. And yes, I could have paid cash for both if I wanted to but would rather have the flexibility of cash in the bank.

Yes, it can work, just as long as people go into it with their eyes open of course. For me it was important to have low payments now until I have more income in a few years's time. I had the money for the deposit whichever way I chose to finance the car, but the PCP option means I get to keep the deposit for next time (or for the balloon payment) and have lower payments meantime. I normally wouldn't do it that way, but it suited my current circumstances. And I'm aware of the implications, it's when people aren't and get caught out that ti becomes a problem.

menachem

Yes, it can work, just as long as people go into it with their eyes open of course. For me it was important to have low payments now until I have more income in a few years's time. I had the money for the deposit whichever way I chose to finance the car, but the PCP option means I get to keep the deposit for next time (or for the balloon payment) and have lower payments meantime. I normally wouldn't do it that way, but it suited my current circumstances. And I'm aware of the implications, it's when people aren't and get caught out that ti becomes a problem.

You have a point there but the video simply want to say that if his sister has enough cash to buy car. Then, why not pay it on cash instead of car loan. For, his sister will not only worry for paying loan but also for maintenance of car.