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  • FIRST POST
    • addis123
    • By addis123 11th May 18, 10:33 PM
    • 33Posts
    • 9Thanks
    addis123
    Buying a used car with cash or on finance
    • #1
    • 11th May 18, 10:33 PM
    Buying a used car with cash or on finance 11th May 18 at 10:33 PM
    Hi

    Just wondering what people's preferences are when buying a car. Pay for the car cash price straight off (if affordable) or get it on finance. Our old car has packed up so we are looking for a new one. We've got about 8000 to play with. All my previous cars have been bought for around 2000 max, so I've obviously just bought them cash and this was are idea this time. We've been to a few dealers and they all seem to want to point us towards various offers regarding financing the cars we are looking at. Personally I've always thought I'd prefer to buy the car outright then it's mine and I'm not tied down to a dealer, but I'm coming to the thinking that if I'm paying so much for the car (I know some people pay way more than 8000 but it's the most I will have paid) perhaps it's better on finance, what with the warranty that dealers offer with finance deals. Most people I know finance their cats so would like to get some input from the folk on here.

    Cheers
Page 1
    • addis123
    • By addis123 11th May 18, 10:36 PM
    • 33 Posts
    • 9 Thanks
    addis123
    • #2
    • 11th May 18, 10:36 PM
    • #2
    • 11th May 18, 10:36 PM
    CARS...most people I know finance their CARS...
    Most people I know don't have cats...
    • Jonesya
    • By Jonesya 12th May 18, 8:24 AM
    • 1,514 Posts
    • 931 Thanks
    Jonesya
    • #3
    • 12th May 18, 8:24 AM
    • #3
    • 12th May 18, 8:24 AM
    Why do you think the dealers are pointing you towards finance?

    Its because they get commission on selling finance and you make more money for them if you buy it on finance, than if you pay cash.

    It may also give them more opportunity to sell you something more expensive, if your limit is 8k in cash, financing with a 4k deposit and add finance, get you upto 10-12k or more. Result! for them - finance commission and their commission on the car goes up as well.

    I doubt they are concerned about your best interests.
    • Schoolworker
    • By Schoolworker 12th May 18, 8:41 AM
    • 297 Posts
    • 637 Thanks
    Schoolworker
    • #4
    • 12th May 18, 8:41 AM
    • #4
    • 12th May 18, 8:41 AM
    Last month we bought a new car for hubbie as he needed, we went to a well known garage a bought it at a cash price no problems and I believe that we got a bit better deal as it was a cash price. We used mostly our savings as well as some on a 0% credit card we runs out the end of next year so I'm plugging away paying this off rather than their finance package.

    I would go for cash buy out if you can and see a car you want in your price bracket but the garage should not give you hasle as they are still getting business. We got a get buy as the car was pre registered to the garage and price was good as they wanted to sell it quickly. Good luck
    • GunJack
    • By GunJack 12th May 18, 8:47 AM
    • 10,431 Posts
    • 7,812 Thanks
    GunJack
    • #5
    • 12th May 18, 8:47 AM
    • #5
    • 12th May 18, 8:47 AM
    Hi

    All my previous cars have been bought for around 2000 max, so I've obviously just bought them cash and this was are idea this time.
    Originally posted by addis123
    Why change your previously-successful modus operandii and blow 8k on a metal box that gets you around from a to b to c etc., stick with your 2k budget (which is 5-7 times my budget, btw) and keep yourself motoring for many, many years to come...

    ....and you'd be a lot more gutted if some idiot writes off your 8k car than a sub-2k one


    check out:-

    https://forums.moneysavingexpert.com/showthread.php?t=3803929&page=70

    ......Gettin' There, Wherever There is......
    • addis123
    • By addis123 12th May 18, 9:04 AM
    • 33 Posts
    • 9 Thanks
    addis123
    • #6
    • 12th May 18, 9:04 AM
    • #6
    • 12th May 18, 9:04 AM
    @Joneswa. I think you misunderstood my question. Maybe I didn't phrase it correct. I know exactly why they want me to finance my car and that they couldn't care less about my interests. I just wanted to know what the preferred method of payment was for some of the posters on here.

    @GunJack
    I can't see a lot wrong with what you're saying there!!
    • Svein Forkbeard
    • By Svein Forkbeard 12th May 18, 9:21 AM
    • 565 Posts
    • 1,300 Thanks
    Svein Forkbeard
    • #7
    • 12th May 18, 9:21 AM
    • #7
    • 12th May 18, 9:21 AM
    OP the only question is how much interest can you receive on the cash in the bank versus how much interest will you pay on the finance.

    The only other caveat is how much you want to keep as an emergency fund. Do the maths and then decide.

    If I was in your shoes I might decide to up the car a bit and spend 4k-6k and keep the car a bit longer.

    Alternatively you may decide that you (eg don't have kids yet and) want to go mad for a couple of years and have a nice car, then keep the money in the bank and take out a lease (not a PCP unless the maths favours that) but look for the deal and not the car.
    Last edited by Svein Forkbeard; 12-05-2018 at 9:24 AM.
    • Tarambor
    • By Tarambor 12th May 18, 11:31 AM
    • 3,795 Posts
    • 2,822 Thanks
    Tarambor
    • #8
    • 12th May 18, 11:31 AM
    • #8
    • 12th May 18, 11:31 AM
    @Joneswa. I think you misunderstood my question. Maybe I didn't phrase it correct. I know exactly why they want me to finance my car and that they couldn't care less about my interests. I just wanted to know what the preferred method of payment was for some of the posters on here.
    Originally posted by addis123
    100 on credit card for some lovely juicy Section 75 protection, rest by debit card/bank transfer.

    Another option if you had a card with 0% on purchases or balance transfers is to utilise that to pay for it, put the 8k you would have spent in an account gaining interest. Set up direct debits on the card to repay in full by the end of the 0% offer and then you get an interest free loan and actually put yourself in a better place than paying cash as the 8k would have gained a few years interest.

    In short, if you can get higher interest on the 8k than you would pay on borrowing then put it on borrowing and invest the 8k. If you can't get higher interest on the 8k than borrowing then pay in cash but in either case put a small amount of the purchase on a credit card for Section 75 protection.
    • addis123
    • By addis123 12th May 18, 1:19 PM
    • 33 Posts
    • 9 Thanks
    addis123
    • #9
    • 12th May 18, 1:19 PM
    • #9
    • 12th May 18, 1:19 PM
    Cheers for that.
    • Deastons
    • By Deastons 12th May 18, 2:07 PM
    • 419 Posts
    • 224 Thanks
    Deastons
    Maybe I didn't phrase it correct.
    Originally posted by addis123
    Somewhat ironic.
    • addis123
    • By addis123 12th May 18, 3:40 PM
    • 33 Posts
    • 9 Thanks
    addis123
    Somewhat ironic.
    Originally posted by Deastons
    Not really ironic no. More of that as English is my second language (maybe even third) Amharic being my native tongue, sometimes writing English I'm concerned that I didn't come across as intended. Hence why I thought I may not have phrased my question correctly (please advise that adding the ly to the end of correct is the right term to use)
    Always willing to improve my English Deastons so will try harder in the future.
    • Richard53
    • By Richard53 12th May 18, 4:30 PM
    • 2,771 Posts
    • 2,310 Thanks
    Richard53
    Not really ironic no. More of that as English is my second language (maybe even third) Amharic being my native tongue, sometimes writing English I'm concerned that I didn't come across as intended. Hence why I thought I may not have phrased my question correctly (please advise that adding the ly to the end of correct is the right term to use)
    Always willing to improve my English Deastons so will try harder in the future.
    Originally posted by addis123
    Correct - adjective
    Correctly - adverb
    The phrasing was correct
    I phrased it correctly


    HTH.
    If someone is nice to you but rude to the waiter, they are not a nice person.
    • forgotmyname
    • By forgotmyname 12th May 18, 5:44 PM
    • 27,969 Posts
    • 11,360 Thanks
    forgotmyname
    Yes get it on finance and pay interest on top of the cars purchase price???

    Im sure there is a flaw in that?
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
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