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Original poster

How did you buy your car

20 replies

forevermore · 03/08/2011 00:16

We need a new car. What's the best wy to finance it if you don't have cold cash. Mortgage reserve, hp, bank loan, ballon payment PCP?? any advice appreciated. The car we want costs £25K

OP posts:

Alibabaandthe80nappies · 03/08/2011 00:22

Are you dead set on having brand new? We always buy one a few months old which has done its huge depreciation already.

I would think mortgage would your best bet, and then overpay on the amount so that you aren't actually paying for it for the next 20-odd years. I bought my car cash in the end but we did look into financing options. Ballon payment seemed crap, you are paying a new price for an old car essentially.

PogoBaby · 03/08/2011 00:38

we paid for our last car out of savings but then it only cost us £3450 as that was all we could afford.

I did get a bank loan for a previous car, personally try to avoid adding any extra to the mortgage but that's just my own 'thing' IWSWIM

DontWorryBaby · 03/08/2011 00:41

Definitely not mortgage, you'll pay for it about four times over!!

DontWorryBaby · 03/08/2011 00:44

Sorry, missed the reserve bit, ignore me! Think there is a maximum that mortgage providers will offer on that basis.

vickibee · 03/08/2011 07:52

some car companies offer good finance deals ecen 0% apr if you have a big deposit. The only problem with getiing a car on credit id that the loan amt is greater than the value of the car as the depreciation is massive in the early months.

bellavita · 03/08/2011 07:56

We paid cash for DH's.

Mine - the one before this, we paid cash and my current one I traded in and took a 0% finance deal.

trixymalixy · 03/08/2011 08:02

It really depends whether you are the type of person who will keep the car for good or plan to change it every three years. If the latter then normally the finance deals offered by the dealer are best value as they heavily discount the apr in order to sell the cars. With HP and PCP there's also the option to just "walk away" after you have paid half under the halves and thirds rules if the payments are too great or you're in negative equity. The payments would be lower than with a loan if you hand the car back at the end rather than pay the balloon. PCP also gives a guaranteed future value for the car.

If you plan to keep it then using your mortgage reserve would have the cheapest apr, but you would pay more in the long run for the car, unless you are disciplined enough to pay it back at the same rate loan payments would be.

Bank loan is the most straightforward, but the aprs are shocking at the moment.

Hevian · 03/08/2011 08:03

Ha hah madness reigns

trixymalixy · 03/08/2011 08:04

Also you can get gap insurance to cover the risk that the car is written off and the value has depreciated to less than the finance on it.

mumblechum1 · 03/08/2011 08:08

Paid cash for mine, but it was only £7k. DH bought his through a scheme at work, it cost about £60k and payments were about £800 pm which was bloody ridiculous in hindsight, but it's still going strong 12 years later.

I normally avoid any type of borrowing, would rather save for an old banger.

asecretlemonadedrinker · 03/08/2011 08:12

Look out for a 0% finance deal. Never a loan, the car will lose value so quickly and you wil still be paying off a few hundred a month for a car worth a few grand

Tw1nkle · 03/08/2011 08:18

25K for a car - you must have money to burn!!!!!

Xenia · 03/08/2011 08:28

If you have £25k in cash easily available by all means spend that type iof money on a car. if you don't then it's probably better to buy cheaper cars. two of our children's cost £800. Never buy new.

No wonder this nation is in so much debt when people spend money they don't have on goods they don't need.

thestringcheeseincident · 03/08/2011 08:30

Cash. Always only cash. But we don't have fancy cars.

KristinaM · 03/08/2011 08:32

I never thought i would say this but i agree with xenia

Awomancalledhorse · 03/08/2011 08:36

Why do you need to get a brand new car?
Which car is it that you want?

coastgirl · 03/08/2011 08:46

We just bought a 60 reg car - looks and smells like a new car, has under 10000 miles on the clock, less than a year old, but we paid 2/3 of the brand new price. Traded in our old car, 50% cash deposit, 0% interest on the rest over two years. As a nearly-new car it's not MOT eligible for two years and is still under warranty - I would hate to have been the person taking a £5000 hit after 10 months!

stressheaderic · 03/08/2011 09:14

coastgirl - I did similar last year. Had it a year, still feels brand new and has only cost me two new tyres so far.

BrandyAlexander · 03/08/2011 12:15

you want to get into debt to buy a £25k car? why?

Fizzylemonade · 05/08/2011 16:06

We buy 1 year old cars when the previous ones are dying, still under warranty, all the problems should have been sorted. We did cold, hard cash, saved like demons, traded our old car against it.

Would not put myself in debt for a car. A house, yes, a £25k car, never.

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