buying outright vs finance

[blooblies]

Can anyone educate me in the merits (or otherwise) of buying used cars outright vs finance? We've always bought outright for single k figures (so cars >4 years old) thinking this was the best way to save money in the long run, but a friend recently tried to persuade me otherwise. I didn't really understand, am a bear of little brain. Is finance a savvy option? I'm not keen on tying up my monthly finances even further than they are already and would prefer the initial hit and deal with the aftermath of that.

If the finance is interest free, then yes it is worth it, if you wish to budget for it. This is because you will be gaining interest (although not much) on your savings.

If the finance has interest then it is better to pay outright if you have the funds. This is because you will be paying a higher rate of interest than you will be receiving on your savings.

That was my thinking. Why would an accountant advise someone to pay by finance then, if it is not necessarily 0%?

ahhh brain hurt

The asset will depreciate whether you buy with cash or finance. Unless you have some hot shot financial systems where you would otherwise use the cash to fund a more lucrative investment, just pay cash.

0% finance usually means the price of the car is higher than the cash price, so you're paying more even though you're not paying interest

so get quotes for both

but are finance cars (not 0%) priced lower than cash price cars?

I don't think there are finance cars as such - most dealers don't do 0%, so their cars are priced at £x & then they have links to finance houses & will quote you for that

\link{http://www.chapelhouse.co.uk/\this dealer seems to specialise in 0% finance} & their prices are def on the high side

(when I said higher than the cash price I think I meant higher than you'd pay for the same car elsewhere )

The only reason to buy on finance is if you need (or want) the car immediately and you don't have the full cash sum.

If you have the cash, use it; you will not get a better rate on your savings account than the finance rate you will be paying (otherwise everyone would get loans and stick them in savings).

"But what if we have an emergency and need the cash?" Then get a loan at that point, or use a credit card (which is a short term continuous loan anyway).

Stay clear of finance IMO