Financing a car for business use

Tracyk_2 · 2 November 2005 at 9:16PM

Any ideas on the best way to finance a new car for hubby? Will be doing about 20k miles per annum. Looking at a £20k car.
If we try and put some of it on life of balance Amex card - can we spilt the intial payment over 2 or 3 cards and then consolidate onto Amex?
or pay cash and pay the monthly payments into the mortgage?
or garage is offering 5.8% interest?

Rafter · 3 November 2005 at 11:57AM

BE VERY CAREFUL OF GARAGE INTEREST RATES.

The rate they quote is often the amount of the cars value they will add for each year of the loan, ignoring the fact that you will be paying off the loan each month.

The APR can often be twice as much as the rate they quote as a result.

Garages will often charge commission on paying by credit card too - so you either need to get the funds to your current account somehow, of pay 2%+ fees to the garage.

At 20k miles a year, I'd recommend getting a nearly new car or the depreciation will be a killer.

Don't count on a 60k mileage car after 3 years being worth more than 30% of purchase price - so £4700 a year in depreciation costs.

I'd suggest a 1-2 year old lowish mileage car and then change every 12-18 months. That way you won't pay a big mileage penalty.

Otherwise go for a japanese/german diesel where the depreciation will be less.

As far as financing I'd use your mortgage and make payments across as you suggest. Then use 0% and LOB offers to reduce your overall cost of borrowing.

Good luck.

R.

Financing a car for business use

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