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  • FIRST POST
    • gt568
    • By gt568 10th Feb 18, 10:21 AM
    • 1,652Posts
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    gt568
    Paying for a new car
    • #1
    • 10th Feb 18, 10:21 AM
    Paying for a new car 10th Feb 18 at 10:21 AM
    Am looking at borrowing about 20k to pay for a new car, the rest made up with savings...

    What is bets to fund this...HP (dealer finance) or a bank loan? Is it as simple as going for the lowest interest rate?

    MTIA.
    Down with the signature fascists!!
Page 1
    • neilmcl
    • By neilmcl 10th Feb 18, 10:26 AM
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    neilmcl
    • #2
    • 10th Feb 18, 10:26 AM
    • #2
    • 10th Feb 18, 10:26 AM
    How much savings are you putting towards the car?
    • thescouselander
    • By thescouselander 10th Feb 18, 10:30 AM
    • 5,372 Posts
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    thescouselander
    • #3
    • 10th Feb 18, 10:30 AM
    • #3
    • 10th Feb 18, 10:30 AM
    It can be complicated because of all the incentives offered to take finance. Also different finance schemes work differently and with some of them you won't own the car.

    The best thing to do is work out the total costs for all the different financing options (of which there are many) over the period you want to use the car and go from there.

    Personally I've found a bank loan to usually work out more expensive than the dealer finance but it all depends on the deal at the end of the day. Also bare in mind you get added protection if the finance company has an interest in the car which probably won't be the case with a bank loan.
    Last edited by thescouselander; 10-02-2018 at 10:35 AM.
    • gt568
    • By gt568 10th Feb 18, 10:43 AM
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    gt568
    • #4
    • 10th Feb 18, 10:43 AM
    • #4
    • 10th Feb 18, 10:43 AM
    How much savings are you putting towards the car?
    Originally posted by neilmcl
    About 10k.
    Down with the signature fascists!!
    • neilmcl
    • By neilmcl 10th Feb 18, 10:47 AM
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    neilmcl
    • #5
    • 10th Feb 18, 10:47 AM
    • #5
    • 10th Feb 18, 10:47 AM
    Well you have a choice, the MSE thing would be to forget about a new car and get a used car for the 10K. However, if you really are intent on getting a new (or nearly new) car I'd get a bank loan and buy the car outright rather than chuck 10K onto a finance deal.
    • thescouselander
    • By thescouselander 10th Feb 18, 11:13 AM
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    thescouselander
    • #6
    • 10th Feb 18, 11:13 AM
    • #6
    • 10th Feb 18, 11:13 AM
    Well you have a choice, the MSE thing would be to forget about a new car and get a used car for the 10K. However, if you really are intent on getting a new (or nearly new) car I'd get a bank loan and buy the car outright rather than chuck 10K onto a finance deal.
    Originally posted by neilmcl

    That's not MSE at all. MSE is about buying what you want while saving money. If the OP buys an old car which they don't want that's not MSE - that's just buying something else that doesn't really meet the requirement.
    • RichardD1970
    • By RichardD1970 10th Feb 18, 11:23 AM
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    RichardD1970
    • #7
    • 10th Feb 18, 11:23 AM
    • #7
    • 10th Feb 18, 11:23 AM
    If you can get good discounts/incentives for using the dealer finance but can get a better APR for a loan elsewhere, then it may be worth taking the finance then cancelling it and paying it off with the loan.
    • jimmy cricket
    • By jimmy cricket 10th Feb 18, 12:36 PM
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    jimmy cricket
    • #8
    • 10th Feb 18, 12:36 PM
    • #8
    • 10th Feb 18, 12:36 PM
    You could take out finance with the dealer to get the discounts/cash back. I did this and got a 2k !!!8216;contribution !!!8216;. I then paid it off. I think the consensus is to do this within 14 days. I did it within five. There is a daily interest rate which for me was 50p a day.
    If you need finance, then you could pay the dealer finance off with the bank loan.
    There are however, interest free deals from manufacturers at time to time.
    Whatever you do, don!!!8217;t ask the advice from the dealership. They will tell you to take whatever makes them the most commission. They lie with impunity.
    Do your own homework and work out what is the cheapest.
    • parking_question_chap
    • By parking_question_chap 10th Feb 18, 12:43 PM
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    parking_question_chap
    • #9
    • 10th Feb 18, 12:43 PM
    • #9
    • 10th Feb 18, 12:43 PM
    Why do you need a 30k car?
    • RichardD1970
    • By RichardD1970 10th Feb 18, 12:55 PM
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    RichardD1970
    Why do you need a 30k car?
    Originally posted by parking_question_chap
    No one needs a 30k car but if that is what the OP wants and can afford then that is their choice.
    • parking_question_chap
    • By parking_question_chap 10th Feb 18, 1:05 PM
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    parking_question_chap
    No one needs a 30k car but if that is what the OP wants and can afford then that is their choice.
    Originally posted by RichardD1970
    Yes agreed.

    But 66% is going to be on finance.

    Crazy imo.

    If they have a good job then save up and no need to worry about interest rates.
    • onomatopoeia99
    • By onomatopoeia99 10th Feb 18, 2:47 PM
    • 4,078 Posts
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    onomatopoeia99
    Why do you need a 30k car?
    Originally posted by parking_question_chap
    That's not relevant. The original question was not about what to buy or how much to spend, it was about the most efficient way to finance an already decided purchase.
    INTP, nerd, libertarian and scifi geek.
    Home is where my books are.
    • parking_question_chap
    • By parking_question_chap 10th Feb 18, 5:42 PM
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    parking_question_chap
    That's not relevant. The original question was not about what to buy or how much to spend, it was about the most efficient way to finance an already decided purchase.
    Originally posted by onomatopoeia99
    Its even more relevant than the original question.
    • onomatopoeia99
    • By onomatopoeia99 10th Feb 18, 5:48 PM
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    onomatopoeia99
    Its even more relevant than the original question.
    Originally posted by parking_question_chap
    No it isn't. It does not matter why they feel they need to spend 30k on a car, it's none of your business and if you knew, it wouldn't help you answer the question they asked.

    Since you don't need to know, you're either being nosy or judgmental.
    INTP, nerd, libertarian and scifi geek.
    Home is where my books are.
    • Clive Woody
    • By Clive Woody 10th Feb 18, 10:36 PM
    • 4,444 Posts
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    Clive Woody
    If you can get good discounts/incentives for using the dealer finance but can get a better APR for a loan elsewhere, then it may be worth taking the finance then cancelling it and paying it off with the loan.
    Originally posted by RichardD1970
    Agree with the above, with one exception, you want to settle the dealer finance, not cancel it. If you tell them you want to cancel it you run the risk of them reclaiming any incentives. By settling the finance you do not run the risk of having to repay the incentives from the dealer.

    At least this is what I have been advised
    Rugby Union - The Greatest Game
    • missile
    • By missile 10th Feb 18, 11:18 PM
    • 9,378 Posts
    • 4,651 Thanks
    missile
    ... At least this is what I have been advised
    Originally posted by Clive Woody
    OP would have 14 days cooling off period to CANCEL the PCP agreement without losing any incentive. Been there done that.

    However, OP could not arrange two lots of finance using the car as collateral. If he does not have or cannot raise sufficient funds to redeem the PCP he will not be able to do that.
    Last edited by missile; 10-02-2018 at 11:21 PM.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • parking_question_chap
    • By parking_question_chap 11th Feb 18, 4:04 AM
    • 1,591 Posts
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    parking_question_chap
    No it isn't. It does not matter why they feel they need to spend 30k on a car, it's none of your business and if you knew, it wouldn't help you answer the question they asked.

    Since you don't need to know, you're either being nosy or judgmental.
    Originally posted by onomatopoeia99
    Of course its more relevant, burying your head in the sand to think otherwise.

    And fyi when posting information about yourself on a web forum, it becomes other peoples business by default.
    • gt568
    • By gt568 11th Feb 18, 5:11 PM
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    gt568
    Some interesting replies there, thanks guys. I wasn't thinking PCP to be honest, I want the car paid in full by the time the finance/loan finishes. Planning on keeping it for a fair while.
    Down with the signature fascists!!
    • Jonesya
    • By Jonesya 11th Feb 18, 7:30 PM
    • 1,413 Posts
    • 869 Thanks
    Jonesya
    What is bets to fund this...HP (dealer finance) or a bank loan? Is it as simple as going for the lowest interest rate?
    Originally posted by gt568
    You let some other guy buy the car brand new on PCP, service and maintain it for 3 years and pay for the depreciation, then you buy it out-right for 10k in year 3.
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