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.

I am very nervous of credit so normally save to buy cars . However I have never had a very expensive car.

Sorry, I’m a bit behind on UK stuff as I moved out some years ago. My dad pays 0% on his car so I just went with that.

Where are you buying luxury cars for £30,000? My Volvo was over 40 and I wouldn't caĺl that luxury. I don't think it would buy you a family sized Ford.

Well of course 🙄 it’s very likely going to be a repeat customer. Leasing creates loyalty

I prefer to invest my money than splash it out in one go on a depreciating asset.

How often is finance 0%? Is that common?
Ive always had second hand cars that are just a couple of years old (other than my first banger at 21) paid for outright. The thought of paying hundreds of pounds a month for a car horrifies me. But, most of the people I know with a car lease it or use PCP (is it the same?). There are a lot of Range Rovers / Teslas / Porsches on my street. No way have they all been bought in cash!

Most car financing is so expensive you’d be better to take a bank loan and pay cash for the car. It’s certainlt not 0%.

We owned our last car outright and had SO many issues with repair costs etc.

Now we have a salary sacrifice electric car through DH's work. Because we're high earners, it's very tax efficient and works out cheap.

So no, we don't own the brand new car, but for tax reasons it's been better finance wise for us than owning the car outright.

I haven’t had a car on finance for about 15 years, but then my current car is my most expensive and it was about £9k (£5k of which was part-exchange for the last one). We’ll keep it maybe another 2 or 3 years then part-exchange it again for a slightly newer one. As long as it’s reliable, comfortable and big enough for everything we need to cart about with a toddler that’s all we need.

Cars depreciate fast, it is usually much better value to only pay the depreciation and not outlay the cash for the full value. Where is the financial sense in that?

I almost always lease or PCP, I just don’t want the liability. It’s not about not “affording it”.

My current car is £172/month for 3 years and £5k deposit. It would’ve been £35k new, worth about £15k if I’m lucky after 3 years. I’m paying about £11k in finance rather than £20k cash. No brainer for me.

This makes no sense 😭

People who can't afford nice things will always find something negative to say about those who can.

I always buy my cars outright but I also never buy them brand new either. Typically they are a year or so old and I keep them for two to three years.

Sorry, I got mixed up. My dad bought his lease car after 3 years and that was with 0% finance.

Still not sure you can get a luxury car for 30k though.

Most people buy new cars on finance because either a) they can’t afford to cash buy or b) If you are well off enough to afford to buy a luxury car for cash most likely you would buy it on finance anyway because you would likely be looking to replace the car every 3 years or so because you can afford to do so. The people who pay cash are usually looking for a 2nd hand car they intend to run long term.

It makes perfect sense if you want a new car every 3 years which plenty of people do.

I’ve been offered 0% financing fairly recently. I don’t usually finance cars but buy outright. I did seriously consider it but in the end decided to not buy a new car which made it even cheaper. Bought a new S-Works bike instead.

I have bought cars outright, but also financed them more recently. It’s not that I’m unable to buy outright, I just quite like changing my car every few years and like the reliability of newer cars.

I think it’s mostly to do with people not being able to have the capital to buy a new car and wanting something reliable.

My first car on PCP was a small hatchback which I did as I needed reliable car for work but didn’t have a disposable £11,000 in the bank that I wanted as I was saving for a house and a wedding whilst renting.

Since then, we’ve had a child and are in the tough financial years of nursery, newish mortgage, COL. We went for a SUV - I wouldn’t call it posh- because we know we want another child in the future and now kids need car seats until they’re like 8 so need more room, plus my family live 4hrs drive away and to visit them regularly with a toddler you need to basically pack your whole house. We certainly don’t have the money in the bank for the car we have but it works, is safe, and allows us to have a healthy emergency fund and a holiday once or twice a year. Ofc if people had more money they would buy outright. I also know a lot of people who get their car through work allowance

We never buy new-new cars but we do buy cash. Its the compromise that me and DH come to - I'd rather buy a banger, he wants a fancy car, we compromise on getting a car we can afford to purchase outright.

I am very, very wary of being tied into monthly payments. Its a hangover from seeing people having their lives fall apart following the 2008 crash and still being tied into these huge payments for cars, kitchens, furniture. It was really awful.

I'm very risk averse though - despite being pretty high earners we've never extended essential bills and mortgage repayments past what could be safely covered on my (lower) salary if DH lost his job or either of us got ill.

We're definitely unusual though, most people I know have car finance, and I would never tell people why we pay cash because frankly I know it is more than slightly paranoid.

Did you not pass Maths GCSE? £20k is a bigger number than £11k.

I have electric cars, no-one wants an old one, I change them every 2-3 years as the technology improves. I don’t want to run a polluting old banger. So I have lovely cheap to run and non polluting EV’s on finance and save lots of money.

And spend the rest of my hard earned cash on ponies, which do not make good economic sense. But it’s yin and yang.

The lease cost on our current car for 24 months was less than the depreciation if we had bought it in cash. Why would we buy, it doesn’t make sense to.

I wouldn’t buy an expensive car outright because you lose so much value when you drive it off the forecourt. Might as well just throw your money away.

Different if you’re buying one that’s a couple of years old that you’re planning to keep and run into the ground.

Most people we know with expensive cars get them through work.

Same here.

Why would you spend cash on an asset that loses at least 15% of its value the minute you drive it away from the dealer?