Taking a loan out to purchase a newish car

whambar

I think there are 2 ways to go on lease either bells and whistles with someone like Lex Alphabet or ALD etc - I went the other way and went via a broker - brokers tend to get far better prices , but in essence they search the market for a dealer that is offering best prce and they get a private individual a sort of lease deal only a large fleet buyer would get - do get a huge discount really

There are many brokers about there is an advert for vanorama on tV at present who look competitive and fayre well on trustpilot I used a company called Ling Cars - which had good reviews and was cheapest at the time - and has the madness website ever - they seem small but was very swift and effiecent.

Other than a brooker fee - wasn’t a lot maybe around £180 from memeory you don’t pay the brooker - when they sorted the finance a paid the finance company via the supplying dealer

All the cars come from proper manufacturers dealers and the finance in my case was direct with Volkswagen Seat part of VAG anyway. Car was delivered to my home within around 3 weeks

It’s worth checking if car is in stock or built to order in stock delivered in 2/3 weeks factory build anything from 12-26 weeks

Stock cars cheaper than built to order but you will only get a choice of colour and the only options fitted will be the more generic type - I had reverse sensors and Upgraded bigger alloys on mine the rest was only what colour OMG wanted out of choice of 6.

You don’t have a log book as you won’t own the car in a long term rental - insurance wasn’t a problem - insurers just noted VWFS as owner and registered keeper as I rent it effectively but this dint increase premiums etc

For best value leave options open for maybe a few different models and search around a few brokers and you will be a decent price particulary on any offers - normally something the maker has a lot of sitting in an airfield somewhere - choice the right lease duration and Mileage and a good broker should only be looking for a 3 month upfront payment - so quite low monthly rental but want 6-12 months upfront so maybe added both together to work out overall cost

Penelopa.Pitstop

If you think, you will be worried about damage to the car or you are prone to wheels damage or dents, lease may not be for your.

I recommned reading excellent "Best Lease Car Deals" on Pistonheads: https://www.pistonheads.com/gassing/topic.asp?h=0&f=255&t=1713219&i=0

If you read dozen of pages, you will get the gist what is good deal and more technicalities. Just don't start with first post asking questions how it works.

bd10

That's a lovely car but am not so sure on the economics.

Choice 1:
Take loan to buy car, pay interest, realise depreciation over x years. That will be a negative number.

Choice 2:
Buy cheap car in cash, use the monthly amounts you would pay towards the loan and accumulate them in a savings account (or invest) over the same period.

I bet you'd be financially better off in scenario (1). Then take the difference between (1) and (2) and that can be quite a substantial difference.

Someone mentioned over-paying your mortgage. Personally that I would not do. This would only make sense if the mortgage interest rate exceeds yields on other assets/investments.

System

bd10 wrote: »

Someone mentioned over-paying your mortgage. Personally that I would not do. This would only make sense if the mortgage interest rate exceeds yields on other assets/investments.

This. I was going to make that monumental mistake myself. I'd already paid off a chunk a couple of years ago. If I knew then what I know now I'd have stuck it in the VLS fund in a S&S ISA like I did since I saw the light and it would have risen 27% just in 2016 alone (ironically because we voted for Brexit), the return well out performing the interest I'd save on my mortgage.