To pay actual money to own a car?

(215 Posts)
Euphemia Fri 04-Apr-14 17:55:09

I heard on the radio that no-one goes into a car showroom with actual cash and buys a car any more. DH and I have always done that.

Apparently most people now take out financing whereby they pay £200 or so a month, get a car, and after two years they can upgrade to a new car.

Are we being utter mugs handing over £1000s all at once, only to lose loads in depreciation the minute we drive away?

DH hates debt, so I'd have to convince him this would save money. smile

sonlypuppyfat Fri 04-Apr-14 17:59:23

I shall watch this thread with interest we've got rid of our old banger and we are saving for a new car, but we know people who like you say get cars on finance.

The only way to 'save' money on a car is to buy one that is 2-3yo, with the big hit of depreciation already taken by the previous owner.

We just got a new car on finance, and the interest when added up is not horrendous as it's not compound like a mortgage. That's they way I understood it. In no way, shape or form should we have bought a new car as we move every 2-3 years. But if we didn't, I'd be the type to pay off in 3yrs, keep for another 2yrs, then upgrade if finances allowed. I'd like the break in between of not paying for a car!

Bonus on our car is we get 3 years of free motoring basically. All services free and warranty for 3 years.

Nomama Fri 04-Apr-14 18:01:25

We were told that when we bought our last 2 cars. BIL was a mocking and superior as he was the day we started renting a house we could never afford to buy.

But we both like to own what we have possession of, so I doubt we would finance a car if we had available cash. We apparently don appreciate depreciation smile

Sister used to do the finance thing, but she too paid cash for a nearly new a few years ago.

I just don't need a new care every couple of years and am quite happy to run the current car into the ground before I buy another one.

gordyslovesheep Fri 04-Apr-14 18:01:57

no you aren't mugs - you have made a choice that suits you

I do the £200 a month thing and change cars every 2 years BUT it costs - about £2/3000 ever change and you never own the thing - it just suits me and my needs right now x

No, paying cash is the most sensible option. I imagine most people can't afford it up front though and it's easier to spread the payments, even if that means paying interest.

We paid cash for ours but it was second hand. We prefer to pay cash for second hand than finance a new one.

I also find, we are MUCH better at paying bills than saving. So depends on your circumstances really.

Alibabaandthe40nappies Fri 04-Apr-14 18:04:22

We always pay cash for cars.

Finance is just another drag on the finances - I know people who have had to sell cars they can no longer afford due to sudden change in circumstances, and be left with a shortfall on the finance.

We never buy brand new, mostly go for something which is either an ex-demonstrator, or has done very low mileage - 2 years old max. Someone else has taken the big hit on the depreciation, and we get a car which is almost new and no debt.

antimatter Fri 04-Apr-14 18:04:33

finance and "free" motoring applies if you don't drive over their mileage limit I believe

anti That would apply on a lease where you hand the car back or buyout at the end, but not on finance, where you are taking a loan to buy the car outright.

McFox Fri 04-Apr-14 18:06:51

We've just bought a car with cold hard cash too. I couldn't bring myself to get sucked into an ongoing lease, but parting with cash to buy a good cad with very little mileage and costing £5/6k less than it would if brand new suits me just fine.

The fact that my dad (former showroom manager for 30+ years) and one of my close friends (current showroom manager) both advise against taking on a car lease says it all!

Caitlyn2014 Fri 04-Apr-14 18:08:33

If you can afford to buy it outright then why not? Why have a debt if you can avoid it? We always by cash and new, every 3 or 4 years, but then we do live where cars are much cheaper than in the West. But that aside - the smell of a new car is the best perfume ever.

Euphemia Fri 04-Apr-14 18:13:01

I'm looking at it over the longer term - what we'd pay out up front, versus what we would pay over two years.

We have the money in the bank, and can easily afford a few hundred a month, so that's not an issue.

I'm more concerned that DH drives about in the cheapest of cars, and waits until they become unreliable before replacing them. confused If he could get a better car for the same outlay over a few years, I'd be happier.

missymayhemsmum Fri 04-Apr-14 18:14:53

I think you just have to decide how much a year you want to spend, and then see what you can get for it. My theory- a £1k car will last a year, a £2k car ought to last at least 2 years, a £4k car has to last 4 years. Anything more is a bonus. But then I drive old vehicles filled with work stuff, bits of toys and pastie wrappers and don't worry when I dent them, so long as they're safe (er and have written a few off driving tired). Most car finance is a rip off, compared with a carefully chosen loan. I suppose someone has to buy a new car, though, so go ahead!

missymayhemsmum Fri 04-Apr-14 18:17:52

Sorry, just read next post. Maybe you should consider what is the safest, greenest, most reliable car you can get for what you want to spend?

antimatter Fri 04-Apr-14 18:17:59

I can see note "Excess mileage (per mile)" when using VW calculator here:
https://www.volkswagen.co.uk/financeCalculator/chooseModel

It isn't lease (I think).

badidea Fri 04-Apr-14 18:19:11

We've always paid cash for cars, never on credit.

Mind you, the most we've ever paid for a car is £1200 (the cheapest £600) so we're maybe at the lower end of the market grin

Our £600 quid car lasted a year, and our £1k cars have always lasted 2-3 years. As long as I get 2 years out of a grands worth of car, I'm happy!

GilmoursPillow Fri 04-Apr-14 18:20:15

That's exactly what we did (pay cash).

When you do the calculator anti on the left it mentions a optional final payment, which is the lease buyout. That's why the mileage is relevant to that deal.

I hope NEVER to take another lease and will have to keep firm reign on DH to not do so. We had a lovely car before our last move, but only ended up with it for 1yr on a 3yr lease. Had to find someone to take the lease over and we lost $10k on that little deal.... Live and learn.

13Stitches Fri 04-Apr-14 18:22:51

We bought our car at 3yrs old, and had to take out finance on it (no savings). The theory being it was a newer car, and we'd avoid expensive repairs. Except we didn't, and yet again we've had to pay thousands to keep it running, as we have with every older car.

We'll need to get a second car this year, and I'm seriously considering a brand new one on HP with services included so I can at least budget month to month. Low tax, no repairs, no MOT. Is that daft?

juneybean Fri 04-Apr-14 18:23:06

I hate the idea of ever having credit, the thought of a mortgage scares me! So I did go into a showroom and drop cash last month... Probably a fool though!

PrimalLass Fri 04-Apr-14 18:24:07

We used our debit card. Is that the same?

18 month old CMax. Half the price of a new one. Think we were just lucky. Our other car we bought new (10 years ago, is still going). But there was a special offer so it was cheaper than a used one.

We are careful stingy when it comes to car buying.

Mmmbacon Fri 04-Apr-14 18:24:18

Bought one new car outright, 6 months later my husband business was stung for 15k, to say we regretted it is an understatement, 3 years later and I still have moments when I think what a waste,

previous cars have always been 3ish years old, low milage models, we drive 2ltr diesels and reliability is very important, my car is now 8yrs old, but we have the "new" car so can afford for mine to be less reliable as dh has access to his work vehicles,

Next time round it will be cash for a 3yr old again, never will we spend money on a new new car,

starfishmummy Fri 04-Apr-14 18:28:33

I have done it via a bank loan, paying cash and last time I paid a hefty deposit and had the rest on a zero percent finance for a period with cashback. Seemed rude not to!!!

AnnoyingOrange Fri 04-Apr-14 18:29:26

I've had a lot of cars over the last 20 years.

Some old some new.

Paid cash for some and financed others.

My first car was an old wreck. Cost me £500 can and lasted for two years. Had to spend quite a lot on it to keep it on the road though and had to put up with breakdowns

My most recent cars have been bought from new and kept for a few years

I love the reliability of a new car and the warranty in case there is a problem

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now