Chris NottAH Fabrications

View Poll Results: Cash OR Finance?

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  • Cash

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Thread: Cash VS Finance

  1. #1
    sjahS3's Avatar
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    Thumbs up Cash VS Finance

    S3 has been first car I've got on personal finance with the "balloon" payment.

    Just wandering how other people have done it..

    Vote now!

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    Option number 3 - company car

  4. #3
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    As above

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    Cash all the way - couldn't be doing with all the messing with finance companies. Plus it means you can't sell the car before the finance period is up without jumping through all sorts of hoops.

  6. #5
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    Pretty much a bit of both. I don't have a company car and never will....because i'll never work for anyone else. I have issues with authority figures and taking orders i think.
    Anyway i put half the value of the car down in cash and had the rest on finance. Its a big outlay but works a hell of a lot better if i decide to trade it in before the end of the finance term! I'd never go for the balloon payment scheme simply because you never know what the future has in store, and if you can't afford to pay that kinda money now what's to say you'll be able to down the line? Bit risky.
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  7. #6
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    Quote Originally Posted by PNH80 View Post
    Pretty much a bit of both. I don't have a company car and never will....because i'll never work for anyone else. I have issues with authority figures and taking orders i think.
    .
    I dont work for anyone else either. Still have a company car.

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    Personally I finance my cars, they are depreciating assets. I'd rather put my cash to better use.

    When I come to sell them I pay off the finance.
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    Cash. The afghan desert is awesome for saving. Not many shops about.
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    Why pay cash? Do you not have mortgages etc?
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  11. #10
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    are these purchases brand new or used??

  12. #11
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    Quote Originally Posted by marriedblonde View Post
    Why pay cash? Do you not have mortgages etc?
    Why pay interest on a loan when you don't have to?
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  13. #12
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    Agreed!

    Quote Originally Posted by marriedblonde View Post
    Personally I finance my cars, they are depreciating assets. I'd rather put my cash to better use..
    Agreed.. IMO you'd be crazy to part with >20k cash on a car which depreciates as soon as you drive off the forecourt.

    For your everyday Joe Bloggs with a mortgage, wife/partner and 2.4 children it's the most feasible way of getting into a new 20k+ car.

    -Sal-
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  14. #13
    L60N
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    In an ideal world surely cash is better for the following reasons:

    - Great bargaining tool
    - You wont be paying APR
    - One less thing to worry about

    :P

  15. #14
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    Finance. If I had 20 odd grand lying round it would be going into a house
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  16. #15
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    Quote Originally Posted by Matt View Post
    Finance. If I had 20 odd grand lying round it would be going into a house
    Even now??
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    Quote Originally Posted by L60N View Post
    In an ideal world surely cash is better for the following reasons:

    - Great bargaining tool
    - You wont be paying APR
    - One less thing to worry about

    :P
    You ll tend to have more bargaining power if you take out a finance as the company make alot through interest payments

  18. #17
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    If you have the money today say 20 or 20k loan its CHEAPER to do a loan.

    Do the maths on the interest you would loose by shelling out 20k cash and its marginally cheaper than loaning it and keeping the 20k in savings.

    Personally have cashed mine tho. No morgage etc etc. Not an S3, a 2nd hand 2.0TDI but still.

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  19. #18
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    Quote Originally Posted by Crisis View Post
    If you have the money today say 20 or 20k loan its CHEAPER to do a loan.

    Do the maths on the interest you would loose by shelling out 20k cash and its marginally cheaper than loaning it and keeping the 20k in savings.
    The only way putting money in savings and getting a loan would be cheaper is if the loan APR was less than the savings interest rate.
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  20. #19
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    Paid cash for our Sportback, although around half of the money came out of a car I sold that was covered by a personal loan.

    Generally though, my view is that finance is best for anything that depreciates, even including the extra cost of interest. This way, you're only really paying for the depreciation.
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  21. #20
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    Quote Originally Posted by L60N View Post
    In an ideal world surely cash is better for the following reasons:

    - Great bargaining tool
    That's not true. The commission dealers can earn on finance deals through finance companies can be amazing - on a used car, it can be almost as much as their profit margin. So they'll be more than willing to negotiate a deal where you've financed it.
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    Quote Originally Posted by staz1000 View Post
    Why pay interest on a loan when you don't have to?
    because the cash can be invested so you earn more than the monthly payments plus the cost of borrowing the money

    paying cash for a car is throwing money away

  23. #22
    Crisis's Avatar
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    When we are saying finance are we on about a money loan? Or are we on about PCPs and all that fancy rubbish.

    End of the day is you pay full price for the car, credit/finance or cash the depriciation is always there.

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    I've financed my soon to be arriving S3 with the Audi PCP scheme. It gives me a guaranteed future minimum value (or lump sum to pay after 3 years) of just under 15k. So over 3 years I've financed the other 11k + 4k deposit.

    This way I'm only really paying the depreciation over 3 years, and as I won't be keeping the car after 3 years, I'll just trade it in to clear the 15k lump sum.

    Done this with my previous 2 cars and in both cases ended up with a small amount of equity left in the car after clearing the lump sum to put towards the deposit on the next car.

  25. #24
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    Cash top up from trade in of previous car.

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  26. #25
    Dorsprung Turch Vechnique

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    On this subject - i have a finance package which runs for a couple of years.

    If i sold the car privately, then paid off the rest of the finance is that shady?

    I know technically i don't own the car untill the final payment but do many people do this?
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  27. #26
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    Quote Originally Posted by sleep envy View Post
    because the cash can be invested so you earn more than the monthly payments plus the cost of borrowing the money
    How or earth do you think you can do that? Interest on borrowed money will always be more than on saved.

    paying cash for a car is throwing money away
    That's a ridiculous statement.
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    Depending on how much the motor is ,I like to put in a good lump sum...up to half,finance the rest, & keep some cash in the bank, as people have said, you never know whats round the corner that you might need some cash for. However I dont think I would ever completely finance a car-as in the whole amount.
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    Quote Originally Posted by staz1000 View Post
    How or earth do you think you can do that? Interest on borrowed money will always be more than on saved.
    You can find several high interest deposit accounts where you can up to 15% interest, while a motor loan comes in at 6.9% (over here anyway). When you sell the car you would then be in profit, so to speak, since your interest earned would outweigh the interest paid 3:1.

    I still prefer to pay in cash rather than have regular monthly outgoings.

  30. #29
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    15%??!! I have looked in the back of the papers for their high interest account recommendations but I have never seen anything that high!

    I had some money in an investor ISA and it gained 10% in 3 months, and when the american credit crunch hit I ended up out of pocket by 5% before I'd managed to pull it out!

    But either way yes I'd prefer not to have the outgoings anyway.
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    Quote Originally Posted by staz1000 View Post
    How or earth do you think you can do that? Interest on borrowed money will always be more than on saved.

    That's a ridiculous statement.
    I said investing not saving - if you can make a compound return of 10% minimum if you APR is less than 7.5% you are making profit

    there are a number of relatively low risk investments that will yield this

    it maybe ridiculous to you but to me it's a no brainer as I'm not throwing money away but rather earning it and all it takes is an hour or two of my time a week

  32. #31
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    Quote Originally Posted by staz1000 View Post
    Why pay interest on a loan when you don't have to?
    I have a mortgage which is possibly the most expensive loan. I'd rather pay that off quicker. It makes more sense.

    J.
    Married and blonde yes, but still a guy with a poor taste in usernames!

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    Quote Originally Posted by L60N View Post
    In an ideal world surely cash is better for the following reasons:

    - Great bargaining tool
    - You wont be paying APR
    - One less thing to worry about

    :P
    In an ideal world if I had no mortgage then yes I would agree. But I have a mortgage and I try to pay off as much off that as possible.

    J.
    Married and blonde yes, but still a guy with a poor taste in usernames!

    Mercedes Benze E-class 350 sport convertable, black, pacha grey leather, 19" AMG rims, HK stero and a few more toys
    VW Scirocco 2.0Tsi GT with Revo stage 2, evoms induction kit, lowered, short shift, miltek
    BMW 330 Coupe M sport Black, Black leather, Nav and a lot of other options.
    BMW Z4 Coupe Sport in black with a few toys - going friday and gonna be missed by my lad.
    A3 2.0Tdi S-Line DSG. Gone but not forgotten

  34. #33
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    Quote Originally Posted by sleep envy View Post
    I said investing not saving -
    Sorry, my mistake. I've been burned a couple of times from investments. The main one was 911. I was only 21, had saved 4 grand from my pitance wage and then lost a grand in a day. More recently as per the above and that was in a low risk investment.

    Quote Originally Posted by marriedblonde View Post
    I have a mortgage which is possibly the most expensive loan. I'd rather pay that off quicker. It makes more sense.

    J.
    But the loan/finance APR would mean you'd end up paying more surely?

    I can't do maths this morning as I discovered Mackeson Stout last night.
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  35. #34
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    I see what your saying but... My car loan is a lot less than my mortgage. So 3 years of interest on a car loan is a lot lesst than reducing my mortgage term by say a year for example. Although by not paying for my car in cash and paying a chunk of the mortage means I have reduced the term by around 2 years.

    Does that make sense?

    J.
    Married and blonde yes, but still a guy with a poor taste in usernames!

    Mercedes Benze E-class 350 sport convertable, black, pacha grey leather, 19" AMG rims, HK stero and a few more toys
    VW Scirocco 2.0Tsi GT with Revo stage 2, evoms induction kit, lowered, short shift, miltek
    BMW 330 Coupe M sport Black, Black leather, Nav and a lot of other options.
    BMW Z4 Coupe Sport in black with a few toys - going friday and gonna be missed by my lad.
    A3 2.0Tdi S-Line DSG. Gone but not forgotten

  36. #35
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    Quote Originally Posted by staz1000 View Post
    Sorry, my mistake. I've been burned a couple of times from investments. The main one was 911. I was only 21, had saved 4 grand from my pitance wage and then lost a grand in a day. More recently as per the above and that was in a low risk investment.
    that's the thrills and spills of investing - plus it best if you spread the risk about

    Quote Originally Posted by staz1000 View Post
    But the loan/finance APR would mean you'd end up paying more surely?
    not necessarily as you'll have agreed at the outset the amount it will cost you to borrow the money (based on a fixed or capped repayment mortgage), if you can pay it back before the term ends you're still payning back the same amount - the only difference is you are reducing the risk of having to pay more if the market moves towards the end of your loan when you remortgage

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    Don't forget the tax on the interest from any savings/investments (up to 40%) though so you can't compare the two APR values directly, and as has been mentioned, the length of the loans/saving may be different so you have to look at the total cost, not the cost per year (i.e. a lower APR over a longer period of time will be more expensive).

  38. #37
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    Quote Originally Posted by PNH80 View Post
    Pretty much a bit of both. I don't have a company car and never will....because i'll never work for anyone else. I have issues with authority figures and taking orders i think.
    Anyway i put half the value of the car down in cash and had the rest on finance. Its a big outlay but works a hell of a lot better if i decide to trade it in before the end of the finance term! I'd never go for the balloon payment scheme simply because you never know what the future has in store, and if you can't afford to pay that kinda money now what's to say you'll be able to down the line? Bit risky.
    Same here and car is mine from day one... I can sell it whenever I want and pay the finance. Why use my money to get an depreciating asset if I can use someone elses and use my money for the important things...

    Pedro
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    Quote Originally Posted by newbiecrg View Post
    Why use my money to get an depreciating asset if I can use someone elses and use my money for the important things...
    agree with the idea but the 'depreciating asset' makes no odds unless it appreciates...

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    Quote Originally Posted by marriedblonde View Post
    I see what your saying but... My car loan is a lot less than my mortgage. So 3 years of interest on a car loan is a lot lesst than reducing my mortgage term by say a year for example. Although by not paying for my car in cash and paying a chunk of the mortage means I have reduced the term by around 2 years.

    Does that make sense?

    J.
    Not really because you're comparing the total mortgage vs a much smaller car loan.

    You can only really compare the part of the mortgage that is the same size as the car loan and as the mortgage APR will be lower than a standard loan you will end up worse off if you took the loan out. i.e 20k of a mortage at say 5% APR over three years is cheaper in term of interest than a 20k bank loan at 9% over three years, so it make more sense to keep the debt in the mortgage and pay for the car with cash.

  41. #40
    windsurfer

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    OK but what i mean if I have 30k in the bank and I wanted a 30k car I would put 15k on the car and the other 15k on something that will appreciate like a business or something like that...

    Pedro
    FOR SALE: S3 Phantom Black, left hand drive, Xenons, FBMFSW, bucket seats, BOSE, rear parking sensors, armrest, interior light package, Symphony II+. Full Audi service history and 4 new Michelin Pilot Sport 2. 18500 miles PM for details! I want to give it away have a good family reason. For a quick sale around 19.5k PM only if interest is genuine! Thanks

 

 
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