Finance

[mike150]

I've a BMW S1000R bike for sale for about 4 months now, I was asking a fair price at 7500...………..now its 7000...……...if no one wants it soon BMW will be buying off me and they reckon they'll get 8000 for it. I've only had 1 enquiry and he's been pestering me for the whole 4 months now with an offer of 6500 which is a lot less than trade.

Sickening.

Has no one any actual money any more?

 

[Cossers]

It's not even that. It's having £xk sitting on the drive depreciating Vs having it working for you.

Anyway in this case I doubt it's finance. Loans are easy to get and rates are lower than most finance offerings. Probably more of a case of no warranty. Could always offer a warranty with the car through a 3rd party.

Suppose it depends on what your driving, I’ve only ever bought 1 new car outright, depreciation was about 50% after three years, all others have been at close on bottom and actually headed up! Tbh most cars ive owned have cost me nothing (apart from running costs) and actually made on some of them over what I paid, thing is, I’ve found it very hard finding a way to make my savings work in any way that’s worthwhile.

 

[RickyB]

@Coog correct about the loans and so much cheaper. I point this out to many customers and a lot of the response is just you do it we can’t be bothered with the hassle!!! So saving a few £1000 now is hassle for people.......Not everyone thinks logically like you or myself.
@MarkM got it right, ‘if I can’t afford, I don’t have it’

 

[J55NI]

That would be intresting! I’d say it will be lively, always quite the tetchy subject on pistonheads.

It would be interesting to hear what way others view it and approach it without it being made into a who can or cant afford xyz etc. I know a few of the guys on Instagram I follow actually finance the supercars to.

 

[Cossers]

It would be interesting to hear what way others view it and approach it without it being made into a who can or cant afford xyz etc. I know a few of the guys on Instagram I follow actually finance the supercars to.

Totally agree, could open my eyes up abit and possibly change my mindset on the subject.

 

[NickR]

I don’t personally see the issue with finance. I don’t buy anything I can’t afford to repay. I like to keep my savings as just that.

I understand the whole “can’t afford it, don’t own it” aspect too. In all honesty how many people buy a car outright nowadays without some sort of finance whether that be a personal loan, PCP, HP etc.

 

[Coog]

It would be interesting to hear what way others view it and approach it without it being made into a who can or cant afford xyz etc. I know a few of the guys on Instagram I follow actually finance the supercars to.

Big business does it too even if they are cash rich.

 

[J55NI]

Big business does it too even if they are cash rich.

That was my next line I know a few wealthy people who also finance the vehicles and have the opinion of invest the money elsewhere for returns.

 

[WSM]

The whole “if I can’t afford it I don’t buy it” is a fallacy at a certain point. IMHO. I finance/PCP because I change so very often (need to stop that) because you do your ballix in.

But if you think changing costs nothing you’re silly the finance still has to be paid every month

I prefer monthlies as opposed to laying out £200K. That’s completely unaffordable

 

[suckindiesel]

The cars I sell aren’t overly dear, but I tend to find people will either finance the lot or finance none of it. Whose to say whether they could afford to buy the same car outright or not, I don’t assume anything, but as some have said they can’t have a pile of money sense if financing rather than taking personal loan in first place.

 

[gixermark]

I think generally nowadays people are not cash rich.... many are comfortable, but most just living month to month... and happy (or prepared) to just spend what they have, hence the classic sales line of how much can you afford per month!!

There’s a balance to it... we’re only here once... and with interest rates now.. money is ‘cheap’ per say.... and savings are making little to nothing, albeit you can still make money investing (not as much fun as a Supercar mind you!!)

Personally, with interest rates being so low... there is never a better time to tap away at the mortgage as nearly every £ is going against the capital if you are on a decent deal... clearly i’m Getting boring!!

 

[Lappintyre]

Good thread, subscribed

 

[sam_man]

As many of you have pointed out I think there is a severe shortage of cash among everyday people now with many living month to month.

I’ve had two cars on PCP, loved both for a few months until the novelty wore off - then hated them as I viewed them as a waste of money.

Last few cars I’ve had I bought outright, which I love. The car is yours, no monthly repayment to worry about and you can use the money for something else - at the end of the day everybody’s circumstances will be different.

 

[gixermark]

Interesting thing is, at school we were never really taught about money mgt. other than basics of accounting or specifics or running a business (basics)

My 10 year old daughter actually asked me last week about wages, money generally... and when are you ‘taught’ about managing money... was an interesting question, and I don’t think we are!! Hence in some ways we only get our initial feel for money from our parents..

People are generally wary of financial advisors.... the money program on TV highlights how little a lot of people know.... maybe there is a market for just decent honest advice/training.... also pull in advice per that house thread on here.... maybe that’s my calling! Not sure people would pay much for it though.... maybe i’lL stick to my day job!!

 

[Dub_cub 89]

The less people know about managing their money the more profitable they are as customers, it’s no accident that most people haven’t a clue

 

[gixermark]

That's very true!!!

 

[Dan.86]

Really hate this stance that if you don’t own your car outright you can’t afford it. If I had the £30k to buy my current car outright I still would lease or finance it. I can more than afford my car monthly, in fact it’s a pleasure to see something I work for each month come out of my account and to see it sitting in my driveway. It may be leased but it’s exclusively mine and I don’t see it as any less mine.

I actually prefer the mindset I have on my monthly payments. I’m not paying my car off, I’m paying to use it and it suits our needs. I also hate selling cars and maintaining my daily driver after having to do it for the last 15 years.

Even if you do save for your car to buy it outright your still doing without a set amount of money each month for a set period of time. Nobody ever queries your ability to afford to save do they?

It’s a choice

 

[redanni]

Really hate this stance that if you don’t own your car outright you can’t afford it. If I had the £30k to buy my current car outright I still would lease or finance it. I can more than afford my car monthly, in fact it’s a pleasure to see something I work for each month come out of my account and to see it sitting in my driveway. It may be leased but it’s exclusively mine and I don’t see it as any less mine.

I actually prefer the mindset I have on my monthly payments. I’m not paying my car off, I’m paying to use it and it suits our needs. I also hate selling cars and maintaining my daily driver after having to do it for the last 15 years.

Even if you do save for your car to buy it outright your still doing without a set amount of money each month for a set period of time. Nobody ever queries your ability to afford to save do they?

It’s a choice

Bravo Sir

 

[MarkM]

Really hate this stance that if you don’t own your car outright you can’t afford it.

You’re reading too much into some comments imo, in my own case, saying I won’t have it if I can’t afford it doesn’t mean finance is for people with no money, it means finance isn’t for me, in fact I couldn’t afford what a lot in here pay per month, and signing for £X amount for years for cars messes with my head lol

It’s the way I was brought up, I’ve always worked towards a goal, saving when I had the opportunity to and as I previously said, running a business means committing monthly cash to, what is in my case, a luxury, would’ve ended in tears in previous years, even now, when things are good, my mindset hasn’t changed.

 

[Dan.86]

You’re reading too much into some comments imo, in my own case, saying I won’t have it if I can’t afford it doesn’t mean finance is for people with no money, it means finance isn’t for me, in fact I couldn’t afford what a lot in here pay per month, and signing for £X amount for years for cars messes with my head lol

It’s the way I was brought up, I’ve always worked towards a goal, saving when I had the opportunity to and as I previously said, running a business means committing monthly cash to, what is in my case, a luxury, would’ve ended in tears in previous years, even now, when things are good, my mindset hasn’t changed.

Different strokes for different folks. I don’t normally like to rant lol.

In my own circumstances I seen the amount of money I’m paying over 3 years having my car and paying roughly 11k total versus paying 30k (which I don’t have) and the amount “spent” being the depreciation at the end of those 3 years. So I’m just doing it the other way round knowing it’s the only way I could drive the car I’m driving.

 

[WSM]

YOLO. Spend it all.

Thanks, Dad

 

[Darragh]

I’m trying to do a deal to get a bigger and better recovery truck at the minute and am falling flat on my face, it’s under 10k and will take the business to the next level and open me up for heavier work, yet my own bank chased me as it’s a business loan ( I’m done with them lol ) hitting the credit union today

The thing is I have perfect credit, I’m not in any debt and if I want I can go and get a brand new car 30k on finance without any hesitations, you work to pay the car we’re as the truck is working to pay itself plus the business is starting to get serious work, if I get my way I will have enough money we’re I won’t need banks or loans in the future

So yes I’m really pissed of at the minute lol

Ps I sold my golf recently for £5500 and it was a long time advertised, was near getting a friend to set up finance for the new owner but an old school person come along with the cash, so hold out some people are still old school

 

[Chris_702]

Comments such as 'if you don't have the cash to buy your car outright, you can't afford it' and the likes do make me laugh.

Regardless if I had £20k spare to buy a car, if there was a decent finance package available and I felt comfortable with the monthly repayments - I'd sooner lease/finance it before handing over the full £20k.
Plus, if you have a budget of £20k but consider finance (your budget could actually increase based on your monthly budget) and you can then end up looking at a younger car like for like aslong as you are happy with the monthlys.

If you aren't using the car day and daily, you could explore the route of 'Sale or Return' with some dealers. Myself, @RickyB , @Jas Lad etc may have an interest in helping and it could also quicken the sale with warranty provided, finance offered etc.

 

[neil-c]

Depends how you look at it as has been said before. A lot of people are crap with money so don't actually work out the costs to see which would benefit them more. And the definition of value is subjective- some people value lower monthly costs over total costs at the end of a time period, say 3 years.

Running a few numbers;
3 year old car at £25k cash should get you something tasty. Personal loan of £25k costs £726/month over the 3 years you'll keep the car based on 3.6% interest. Car devalues at 20% per year so when you own it outright the car is an asset worth £12,800. Including depreciation (£12,2000) and finance costs (£1157) its cost £13,357 or £371/month. Assumes no break down costs occur.

Alternatively brand new E class E200 AMG, 1 month down payment and 35 month lease with 10k miles/yr will cost you £460/month (random selection of a car from online). Total costs over the 3 years of £16,560. (ps pet hate is people telling me how their car only costs them £x/month in repayments and forget about that 12 month initial payment at the start! lol)

So you're £83/month (£2,988 total) better off in total cash terms in this example over the 3 years. To achieve that £83/month saving you've had to have the cash flow to invest £266/month (£9,576 over the three years) into the asset.

Is that value for money? Do you want to shell out an extra £266/month to be £83/month better off? Could you have made that £9,576 work better for you (invest in a business, take a holiday [or 3] with the family). What kind of second hand car do you want to drive? Are you happy to handle break downs and repairs yourself?

All very subjective answers. The key thing is most people never think about these sort of financial questions.

 

[purplea4T]

Depends how you look at it as has been said before. A lot of people are crap with money so don't actually work out the costs to see which would benefit them more. And the definition of value is subjective- some people value lower monthly costs over total costs at the end of a time period, say 3 years.

Running a few numbers;
3 year old car at £25k cash should get you something tasty. Personal loan of £25k costs £726/month over the 3 years you'll keep the car based on 3.6% interest. Car devalues at 20% per year so when you own it outright the car is an asset worth £12,800. Including depreciation (£12,2000) and finance costs (£1157) its cost £13,357 or £371/month. Assumes no break down costs occur.

Alternatively brand new E class E200 AMG, 1 month down payment and 35 month lease with 10k miles/yr will cost you £460/month (random selection of a car from online). Total costs over the 3 years of £16,560. (ps pet hate is people telling me how their car only costs them £x/month in repayments and forget about that 12 month initial payment at the start! lol)

So you're £83/month (£2,988 total) better off in total cash terms in this example over the 3 years. To achieve that £83/month saving you've had to have the cash flow to invest £266/month (£9,576 over the three years) into the asset.

Is that value for money? Do you want to shell out an extra £266/month to be £83/month better off? Could you have made that £9,576 work better for you (invest in a business, take a holiday [or 3] with the family). What kind of second hand car do you want to drive? Are you happy to handle break downs and repairs yourself?

All very subjective answers. The key thing is most people never think about these sort of financial questions.

The TOTAL cost of my car - 2018 Skoda Superb Sportline is £7640 over 24 months - I’d probably lose more in depreciation over that time - I agree with @Dan.86, it’s not because I can’t afford the cost of the car, but if I bought it outright I’d be spending a fortune more and it’s costing me money twice each month - payments and the unseen one, depreciation.