If you have a car on finance, why?

Cupboarddoorknob · 2025-12-19T16:24:54+00:00

Genuinely curious and not a dig. I’ve only ever owned three cars, my first car my parents bought for me was an old banger, then the other two I’ve bought myself one for £6k which I saved for and then ran it until I realised repairs were silly and sold it on for £3k to cut my losses, I used that £3k and a bit of savings to buy my now car which cost between £3 and £4k and seems to be doing well so far. DH has always bought his cars cash as well. We have friends who have up to £1k a month going out for car payments, all the while they are stressing about their outgoings, not able to save, not living in poverty obviously but it strikes me as total madness to have this monthly expense on a depreciating asset, even if it does bring a level of enjoyment.

autumn1610 · 19/12/2025 16:29

Yes because I could save enough to buy a car outright and needed it to get a job, as my old one (fully owned) was on its arse. However my car on finance was about £150 a month I didn’t get a flashy car was used and have done this 3 times now, I now have a company car but again would finance as I don’t have a bulk amount of money to buy outright but would be able to get a deposit. Sometimes I took a typical bank loan or sometimes through the garage I brought it from both are the same in my opinion

ellesbellesxxx · 19/12/2025 16:29

I do at the moment (first time in ten years!) as the interest rate was lower than what I can get in savings so am better off keeping savings.

HopelesslyNaive98 · 19/12/2025 16:32

Not everyone can afford to buy a car outright. We bought our last car on a 0% credit card and spread the cost over a year - but we were fortunate to have decent enough credit that that was an option tbf.

ScrambledEggs12 · 19/12/2025 16:33

My partner likes to have new cars, and we've already paid off the mortgage.

Original poster

Cupboarddoorknob · 19/12/2025 16:34

Ok to be honest I can totally see the rationale for more reasonably priced cars on interest free or low interest credit. I suppose I am wondering about big money cars on finance or lease cars with big balloon payments which I realise is a different question to what the thread title is asking

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YourZippyHare · 19/12/2025 16:34

I would have thought it was obvious- many people cannot afford to pay outright.

I think what you're really asking is, why do people buy particularly expensive cars, especially on finance? That does seem a bit odd but people have different priorities.

Peridoteage · 19/12/2025 16:34

Yanbu, we always buy cash, second hand 2 yr old cars & keep them until they are knackered. But we are very fortunate to be able to comfortably afford to do that.

But how on earth did you get 3k selling on a car that only started at 6k and was getting expensive to repair?

For most people if they run a car into the ground its worth sweet FA to sell on. Most people buy on finance because they don't have parents funding a first banger, need a car straightaway eg for work, so can't spend a couple of years to save for one.

A lot of people aren't confident about cars and buying a banger can be worrying, most people aren't sure whats a big issue vs whats normal wear and tear on an older car. Bangers also often need ongoing minor repairs to delay avoid expensive bills, easy enough to do if you are interested and able to but many people arent.

SmoothCollie · 19/12/2025 16:34

I mean it can be wasteful but some people have little choice. I'd prefer a bank loan petsonally, but I'm interested in when you bought your car because there's very little half decent available under the 4k you quote.

Original poster

Cupboarddoorknob · 19/12/2025 16:35

YourZippyHare · 19/12/2025 16:34

I would have thought it was obvious- many people cannot afford to pay outright.

I think what you're really asking is, why do people buy particularly expensive cars, especially on finance? That does seem a bit odd but people have different priorities.

Yes exactly, cross posted I think

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Hagnumber4 · 19/12/2025 16:35

When my car dies I won't have a single penny to replace it. I'll have to get finance to buy a new one. I live rurally and we have no bus service so it's a case of needs must

Peridoteage · 19/12/2025 16:35

I do admit i find it weird when people buy cars on finance and replace them every 3 or 4 years. You are constantly financing the depreciation?!

Original poster

Cupboarddoorknob · 19/12/2025 16:35

SmoothCollie · 19/12/2025 16:34

I mean it can be wasteful but some people have little choice. I'd prefer a bank loan petsonally, but I'm interested in when you bought your car because there's very little half decent available under the 4k you quote.

2 years ago, it’s 15 years old with over 100k on the clock but it does what I ask of it

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Original poster

Cupboarddoorknob · 19/12/2025 16:36

Peridoteage · 19/12/2025 16:35

I do admit i find it weird when people buy cars on finance and replace them every 3 or 4 years. You are constantly financing the depreciation?!

Exactly it’s madness?

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RandomUsernameHere · 19/12/2025 16:37

They can’t afford to buy it outright. Just like a lot of people can’t afford to buy their house outright. They could drive a much older cheaper car and they could live in a much smaller less nice house in a cheaper area, but they choose not to.

Original poster

Cupboarddoorknob · 19/12/2025 16:37

Peridoteage · 19/12/2025 16:34

Yanbu, we always buy cash, second hand 2 yr old cars & keep them until they are knackered. But we are very fortunate to be able to comfortably afford to do that.

But how on earth did you get 3k selling on a car that only started at 6k and was getting expensive to repair?

For most people if they run a car into the ground its worth sweet FA to sell on. Most people buy on finance because they don't have parents funding a first banger, need a car straightaway eg for work, so can't spend a couple of years to save for one.

A lot of people aren't confident about cars and buying a banger can be worrying, most people aren't sure whats a big issue vs whats normal wear and tear on an older car. Bangers also often need ongoing minor repairs to delay avoid expensive bills, easy enough to do if you are interested and able to but many people arent.

Think I got lucky with the resell to be honest, I’d also done some expensive repair jobs on it in the previous 12 months (think like 1.5k worth)

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TennisLady · 19/12/2025 16:37

I used to buy them cash, cheaper older models etc.
However my circumstances these days are different and I like a newer car, can afford the finance payments and don’t want a depreciating asset buying a newer car outright.

Original poster

Cupboarddoorknob · 19/12/2025 16:38

RandomUsernameHere · 19/12/2025 16:37

They can’t afford to buy it outright. Just like a lot of people can’t afford to buy their house outright. They could drive a much older cheaper car and they could live in a much smaller less nice house in a cheaper area, but they choose not to.

I don’t think you can compare houses and cars though, as houses are likely to increase in value and you’ve got them at the end of the mortgage term still increasing in value whereas cars depreciate or die

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FancyCatSlave · 19/12/2025 16:40

Because it does not make sense to put cash in to a depreciating asset. If you are buying older, bottomed out cars it is fine. But for newer cars, £40k cash on a car is madness, financing the depreciation is almost always a better call.

I only drive fully electric cars and don’t want to own when the technology and choice is improving all the time. I want to change frequently.

I usually spend up to £300/month on an electric car, which is much better than the cost of fuel and maintenance of an old banger.

FancyCatSlave · 19/12/2025 16:41

Peridoteage · 19/12/2025 16:35

I do admit i find it weird when people buy cars on finance and replace them every 3 or 4 years. You are constantly financing the depreciation?!

Yes that is literally the point. It’s almost always the best way to finance a car- you get to use the asset but pay minimum for it. The goal is never to own it.

SomethingFun · 19/12/2025 16:43

Last car we bought outright was everything you’re meant to do and was 26k. It lasted 5 years, cost £5k when an important part went and that’s on top of mots, services, new tyres etc. We sold it for 12k so it cost £19k over 5 years or £4k a year. You can get a brand new car on lease for less than that every 3 years. Modern cars don’t turn into bangers they turn into liabilities.

Original poster

Cupboarddoorknob · 19/12/2025 16:46

FancyCatSlave · 19/12/2025 16:41

Yes that is literally the point. It’s almost always the best way to finance a car- you get to use the asset but pay minimum for it. The goal is never to own it.

Show quote history

It’s not an asset if you never own it

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Original poster

Cupboarddoorknob · 19/12/2025 16:47

SomethingFun · 19/12/2025 16:43

Last car we bought outright was everything you’re meant to do and was 26k. It lasted 5 years, cost £5k when an important part went and that’s on top of mots, services, new tyres etc. We sold it for 12k so it cost £19k over 5 years or £4k a year. You can get a brand new car on lease for less than that every 3 years. Modern cars don’t turn into bangers they turn into liabilities.

But why not get an older / much cheaper car ?

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Noodge · 19/12/2025 16:47

People say they can't afford to buy a car outright, I feel like I couldn't afford to pay £300+ car finance every month!
I'd rather buy an older car for a few £K and replace every 8 years or so. My current one is on its last legs but I have had it since 2017. I'll spend probably around £5K on a new one, be a bit skint for a while but not have to worry about a(nother) monthly outgoing for however long.

Original poster

Cupboarddoorknob · 19/12/2025 16:49

Noodge · 19/12/2025 16:47

People say they can't afford to buy a car outright, I feel like I couldn't afford to pay £300+ car finance every month!
I'd rather buy an older car for a few £K and replace every 8 years or so. My current one is on its last legs but I have had it since 2017. I'll spend probably around £5K on a new one, be a bit skint for a while but not have to worry about a(nother) monthly outgoing for however long.

This is my mindset too

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Tryingatleast · 19/12/2025 16:50

cheapest car was waayyyy beyond what I could get a loan for and even then I went about to get another shot car!!! our old car was only valuable as scrap. Op no offence meant but it’s one of the silliest questions- why do people use credit? Because at that particular point they can’t afford anything else!!!