Payment options

Thanks for your help guys. I'm going to stick to the mortgage option I think. Will do plenty of overtime to try and pay it off asap.

(08-04-2012 04:44pm)RacingSnake Wrote:  Can't help on your suggestions, but the OP was asking questions on 2 different approaches to pay for the car, neither of which were in the pay for car outright approach.

I actually find the 'holier than thou' posts of those who "pay cash" or feel the need to announce they paid for it on "debit card" is very condescending.

I've had to finance to pay for my evoque, no way would I ever be able to afford near on £50k to 'drop' on a car, I just couldn't afford it.
I do however have no issues in borrowing to get what I want right now, as long as I can afford to pay for it, and understanding full well that it'll cost me an extra £x,000 over the next few years, I struggle to understand why I must be made to feel like I am not worthy to own such a car.

Bluebear seems to have offered the only constructive response here.

The PCP deal from LR is not great, but there are others around if you would wish to use a regular finance deal, though they do seem to vary between 7.9% and 9%.
Some even allow you to overpay too which could also be useful if you do get extra income from investments or bonuses.

Are you suggesting my post was holier than thou??

Of course it wasn't I just suggested long term lending was not a good way to pay for a car.

I was lucky enough to be able to pay cash because i sold 2 cars and saved hard. It was actually slightly less than 30k anyway, not 50k as you suggest. I dont do car loans, If i only had £500 to spend on a car I would buy a £500 car rather than get a loan. Thats just the way i am (i have been driving around in a£500 for 7 months before getting my evoque). Its the same as I could probably get a £200k mortgage if i want but i choose to have a one less than half that. If somebody wants to get cars or anything else on finance than thats their personal choice. I just avoid debt wherever possible.

Nobody has suggested that anyone is not worthy of owning any car.

With a little hindsight, I should have sat on my reply for 10 mins before hitting reply, so I do apologise.
It was spawned by an observation that any thread regarding finance is replied to with 'I paid cash' or 'I have no debt' etc etc
But I guess it's no different from the Fuji vs Firenze or Dynamic vs Prestige debates. (Fuji Dynamic is clearly the best )

I was only able to raise 20% for this, so short of delaying or cancelling (neither were an option ) I had to go the finance route.
I could hit by a bus tomorrow and never lived for now.... I mean I hope not, because I actually don't collect until next week! lol

RacingSnake...........Like you I have to save to buy a car, but I have always saved the money first so I guess I would be a cash buyer. I'm not wealthy by any means, I just don't like the thought of giving my hard earned money to some loan company.

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(08-04-2012 05:23pm)ED209 Wrote:  I was lucky enough to be able to pay cash because i sold 2 cars and saved hard. It was actually slightly less than 30k anyway, not 50k as you suggest. I dont do car loans, If i only had £500 to spend on a car I would buy a £500 car rather than get a loan. Thats just the way i am (i have been driving around in a£500 for 7 months before getting my evoque). Its the same as I could probably get a £200k mortgage if i want but i choose to have a one less than half that. If somebody wants to get cars or anything else on finance than thats their personal choice. I just avoid debt wherever possible.

Nobody has suggested that anyone is not worthy of owning any car.

I agree with these sentiments exactly.

No, the criticism was aimed at me. I was brought up not to borrow money for things, so I bought my Evoque from savings.

(08-04-2012 07:02pm)BTS18 Wrote:  but I have always saved the money first so I guess I would be a cash buyer.

Fair do's,.
The sale of my last (decent) car went into the mortgage, and my April bonus is going on a marriage in the Seychelles (in May)... If I were to save for this car, it would probably take about another 4 years! lol.

So I would rather take the 'hit' on interest per month and have the car now... rather than in 4 years, by which point I probably wouldn't want the car anyway - or rather, would want something else?


Seriously, I'm not taking anything away from those that pay cash, great for them (and you). My comments were based around the repsonse to any question around finance with comments around how cash is best, and how people have always saved up etc etc. It wasn't an option in the question, therefore shouldn't be an answer... we would ALL love to be able to reach into our deep dark pockets, but sometimes, thats just not possible.



ETA: didn't want to upset anyone, but sometimes things just need to be said. I'll say no more on the matter.

(08-04-2012 05:23pm)ED209 Wrote:  Of course it wasn't I just suggested long term lending was not a good way to pay for a car.

You are of course correct in that long term lending is not a good way to fund anything, especially a car. However, the mortgage option described by the OP is not a long term option, it is much cheaper, shorter and flexible than any other loan I can think of with the modern offset mortgages he has.

It is an odd feeling, borrowing against your mortage for short term lending, and for a lot of people still completely unheard of.

It mostly comes from the likes of Virgins One Account, offset mortgages, or where you are allowed to borrow back any overpayments.
It is a VERY cheap way of borrowing, as long as you are disciplined in paying back the extra borrowing as quickly as possible.

An interesting thread and I note that most of us have similar core values in that we are conditioned to buy things and either do it from savings or via finance at the most preferential rate we can find.

On reflection whilst the above is a good and solid approach to the purchase of almost everything we routinely buy in our lives - with one exception and that's most motor vehicles.

If you sit and think about it for a while - you buy something for say £40k and after three years, if you are really lucky, it's worth £20k - not exactly a great investment is it? If you want to get really depressed you can work out just how much money the vehicle loses just sitting on your drive each day.

3 years ago a friend finally convinced me to look at private contract hire as a means to acquiring a vehicle. I investigated carefully and concluded that effectively renting a vehicle for an agreed period and mileage was actually much less expensive and considerably less risky than buying outright or on finance. The vehicle still depreciates as it would have if I'd bought it myself - but it isn't my problem because my name isn't on the V5.

In truth many of the leasing companies either get a discount from the supplying dealer (maybe not on an Evoque) or a retrospective rebate and quite possibly a guaranteed buy-back price for the vehicle at the end of the contract direct from the manufacturer. Either way as private individuals we can't access these kind of deals ourselves but we can reap the benefits in the form of rental prices that are often lower than the monthly depreciation we would have carried personally.

To move from the 'all mine/I own' mindset to one of private contract hire is quite a big leap - though the end result is exactly the same (you drive the car you want) and it costs you less. Although technically you have no 'right to buy' at the end of the lease most leasing companies will give you a price roughly the same as the trade price in a dealer (so in your favour).

So is this completely mad? Actually it isn't and LR Finance do Private Contract Hire themselves - the deposit is typically 3 months payment in advance so most of your hard-earned cash stays where it should be, in your bank account. Once I got my head around it then it really was an absolute no-brainer.

Even if you have a vehicle on-order you can still set up a PCH deal - all the dealer wants is paying, they really don't care what name goes into the V5!

Hi Devonian.
I have taken a lump from my mortgage to fundmy RRE. I too looked at numerous finance options including the 9.9% dealership offer.
I have set up a 4 yr sub-mortgage so I know exactly how much the car 'owes' in my payments. I can pay up to 10% overpayments in years 1&2 without penalty, then I am free to pay whatever after two years without charge or fees.
For me this was the most cost effective way to pay for my little luxury.

It's down to personal choice, but why borrow at a higher rate if you don't have to? Even the man at First Direct agreed with my rationale!!!

Just enjoy the car!