Finance v Buying Car

venomx

For someone on a low income, would it be a better idea to save up and buy a car outright ? Or go finance ?
Car would be about £10,000 - £12,500
Still a long way off but just looking at my options.

Finance seems to make it more manageable, however if a year later one wants to sell the car for something else, this could pose a problem ? Also if one was to get a mortgage in future, the monthly costs could be too much.

At least with buying out-right you own the car and can sell whenever you want, and are not committed or tied down to monthly payments.

What are you guys thoughts on this ? 

Thanks !

Grumpy_chap

If you can buy a car outright, that is always the best way and most secure in terms of impacts to other finance (mortgage).  Sometimes, finance comes with incentives that make it worth taking and then paying off quickly with the savings so that you have the best of both worlds.

Saving is a good discipline compared to borrowing for everything.

iwb100

Can I be blunt? For someone on low income I’d buy the cheapest car possible that was reliable and safe. And just do that. And that’s only if I absolutely needed one.

No way on earth in the current climate should someone on low income be doing finance unless there is absolutely no choice or they have low income but high savings or whatever…low income and savings should be cheapest second hand car possible especially now.

On pcp finance you can sell the car at any time and clear the finance if the car is worth enough to do so and in current climate it probably would be. But still. Take a cheap second hand car for as little as you can pay and minimise the risk.

Ectophile

I have looked at the finance offers that a local car dealer sends me from time to time (I get my car serviced there).

Buying a reasonably new car on finance generally costs about the same as buying a brand new one wothout finance.