Does "everyone" really buy their posh cars on credit?

[Bottleplant]

Or using some sort of lease arrangement?

A colleague recently bought a £30k car and paid cash. Our boss, (privately and I guess unprofessionally) was having a little jealous bitch about it saying who earth pays cash for a car.

Now, I wouldn't dream of telling anyone such details about my financial situation and I earn less than either of them, but I have a broadly equivalent car and I've never had a car on credit in my life.

To me it seems odd to "buy" a luxury car you can't afford, which I would consider I can't if I can't pay for it.

I understand sometimes people will need to get a car for work etc by whatever means possible, but I was surprised at the suggestion that it's what "everyone" does.

It’s snobbery to judge people. Does every single thing you do make perfect financial sense? Are we going to start slating holidays because they don’t bring a financial return? I don’t know about you, but I travel, I have hobbies, I enjoy good wine. I spend money because it brings me joy of some sort. I’m not sure why we suddenly lose that understanding when it comes to cars. If cars aren’t your thing, fine, but if someone else has the income to service debt for something that they find value in and it doesn’t cause them harm, why can’t we just let them have at it…?

Most people need cars. And most people have very basic housing needs, would you expect someone to buy the smallest, cheapest possible house because that’s all they needed?

I don't expect anything. I don't have any expectations re how people buy their cars. Im surprised to learn that doing it on credit is so widespread, that's all.

the only car I bought on finance was interest free for 3 years and I paid a fairly large deposit but at the end of 3 years I owned it. . I find it amazing how important having a posh car is to some people. I mean I’m fond of my car, she has a name for example but I would not put myself in debt. One of my friends pays monthly more than I did for my interest free car and after 3 years, she still owns nothing.

We pay cash unless someone is offering me a 0% deal! Current car cost 30k and was at a discounted price due to end of financial year. We were going to buy a car that was one year old but this was cheaper. We will keep it 5 to 8 years.

I bought my car new for cash (bank transfer not actually a suitcase of cash 🤣). We’d just moved back from abroad so I think getting financing might have been tricky but the interest rate was something like 7% so I didn’t really consider it. I’ve had it 5 years and will probably keep it another 5 before replacing. In the meantime I’m saving a few hundred quid a month to fund the next one. I’m not snobby about finance, just didn’t seem right for us at the time. If rates come down it might well make sense for me to do it next time.

I think if you're spending 30k on a car then most people would have it on finance. We always pay for ours outright but we spend nearly a 10th of that! We've always still had them for 8-10 years.

There's not much that depreciates faster than a car (10 - 25% in the first year) and I can think of much better things to spend 30k on personally.

I recently changed my car, I could have paid cash but I opted for a PCP deal, as I like to change cars regularly and never want to get ‘stuck’ with a car

We're mid 40s and have always bought 2-5 year old cars outright for £4k-£15k. But my current car is our first ever lease car through an electric car salary sacrifice scheme.

I suspect that’s faux surprise really, it’s been this way since I was a teenager.

You know that a lot of lease and finance deals are on second hand cars? It's not just new cars. And the cost of second hand cars is pretty high for a lot of people, especially if you don't want to take the risk of buying something older that quickly costs in bills.

You don't get a particularly luxury car for 20k for example. Our second hand deeply unglamorous MPV cost just over that.

We bought our current car on PCP as we get more interest on our savings than we pay for the finance deal. All depends on the deal you get.

There was a programme about this on radio 4 recently. The car industry relies on people using finance basically. Otherwise people wouldn't buy the cars.

Pre Covid car leasing finance was often 0-2%.

pcps were cheaper then taking out a loan and buying it outright.

lots of people like to change their car quite regularly as well.

i currently have an xc90 which I own and have had for twelve years but I may do a pcp deal for my next car.

Why did you not put your 12000 into a credit card where you would get some reward from? 😬

We don’t buy expensive cars but our car is always on finance. We choose cars around 5k.
Would love the luxury of savings to buy outright!

Whilst I don't know or pry into other people's finances, I bet it is a large number, not just because of pushy car sales people.

I wish it were not the case, perhaps we would have fewer SUVs and other large cars as a result. If resale value was more important, perhaps some driving non-standards would reduce.

I leased mine at first because I wasn’t sure about switching to electric. Then I loved it so bought it from the lease co for cash. I’d never get finance for a car, as those deals are terrible. If finance is the only option, I can’t afford it.

Most of the time when I go to buy a new car the interest rate they offer me in payments is lower than what my money is earning in a main savings account, not even my high interest savings account. It makes no sense to pay the full value of the car.

buying slightly used doesn’t save that much and requires a full cash payment or comes with a high interest rate.

I never thought I would be a new car person, but they are cheaper if you aren’t buying really old cars.

Everyone has different needs, wants and money sources. We want a brand new luxury car every three years so we lease. It works out roughly the same as buying outright then selling on minus costs of servicing etc except our money is still sitting creating interest in our funds. We can afford it , we can change our mind if we want to and we enjoy it. I don't want a clapped out old banger - been there and done that when young. The people I know who tend to buy cars outright are mostly older and set in their ways.

Of course not. Of course some people do though.
We bought ours outright but lots lease/finance for monthly payments. We had the cash to buy our cars and not be tied into years worth of repayments but not everyone has the same financial situations.
Resale value is important to us and we take very good care of our cars!

I’m not judging anyone, you made the false equivalence to buying a house and that’s what I responded to. I’m sure people would make different financial decisions than I do, circumstances and priorities are different and people make decisions that suit their particular situation and priorities. It’s not a judgement to say I don’t buy cars on finance, nor is it a judgement to recognise it’s an expensive way of buying something that depreciates - folk do all kinds of things that are an expensive way to do it. Good thing we all have choice.

My husband used to work for a luxury car brand and said that people would buy cars on finance when there was a 0% APR even when they had the cash as the money was more useful to them sitting in a bank collecting interest.

I don't know how common this is everywhere but he said he only saw people pay on cash when finance was declined, usually because of a business going bust or something, they'd just put it on the card instead.

We bought ours with savings so own it outright. I really don't like constantly adding more and more direct debits to the monthly outgoings

Never do a lease. Or buy on finance. I own my car outright.