Pay cash for car ?

[Markusinuk]

Hi All.

I do not want to turn this post into an 'ability to pay' type post. However, I am curious to know who here buys their (Audi) cars for cash. By this I do not mean 'get a loan and then pay for car' - I simply mean take the cash out the bank and drive the car away .....

I am getting an A5 3.0 TDI and I am able to buy for cash if I wish (first time ever being in that position). My inital hunch was that this is the best way to go - no interest, car is mine from the word go. Also, suppose the car is worth say £20,000 in three years time then all the equity is mine to use (perhaps put more down and get a RS5 then ). With PCP deals, loans and the like you have to end up paying more in the end ......

,,,,,, unless you never consider your car purchase as a 'purchase' and instead just think about it as a 'service' rather than 'goods'. In some ways this makes sense since cars loose so much value ....

... but still feel if the cash is there then a 'non loan' route is the best ...

Any comments or views people?

rgs

Mark

[Golfer]

Mark, I always pay cash plus PX on all my cars, If I can't aford it I don't buy it. I never have debts not even a mortgage now. Lucky no just worked hard and invested well.

I understand many on here buy via "Loan" an for there good reasons.

I know I am on a looser from day one and my money is P*ssing down the drain at warp speed, BUT it's my money and my life which may be long or short, so I enjoy my cars, and if I go next week I can say "I bought just what I wanted"

[Scotty]

A guy I work with and myself have discussed this many times.

I'm from the school of I only get stuff when I can afford it. I hate paying someone interest.

He's in the school of "I'm happy to pay a bit more if it means I can get it earlier".

I guess both have their merits and also disadvantages.

[NewNiceMrMe]

Same here, just not an Audi.

[Alastair_A3]

[ QUOTE ]

Mark, I always pay cash plus PX on all my cars, If I can't aford it I don't buy it. I never have debts not even a mortgage now. Lucky no just worked hard and invested well.

I understand many on here buy via "Loan" an for there good reasons.

I know I am on a looser from day one and my money is P*ssing down the drain at warp speed, BUT it's my money and my life which may be long or short, so I enjoy my cars, and if I go next week I can say "I bought just what I wanted"

[/ QUOTE ]

Im that same, if i cant afford something i wait untill i can

The only debt i have is a huge mortgage

[Chav]

Shoving £50K into a car is stupid IMO.

You can make your money work harder for you with good wealth management/investments etc.

Debts are only bad if you cant afford them - and 99% of companies make money by loaning money so they can make even more money. The ultra cautious people tend to make less.

[Calm Chris]

I've never like debt, hate credit and have sorted out the millstone mortgage by years of over payment.

I have liquidity and could buy a few very high value cars via a simple cheque.

However I would (and have in the past) part finance a car with borrowings. Reason being that if I pay £25k for a car cash and 3 years later I sell for £12k I've 'lost' £13k from my nest egg.

So I tend to borrow £10k over 2 / 3 years, buy at £25k taking £13k hit on sale- logic being that I've only lost £2k of my initial capital.

I know the loss isn't the true financial picture, but a mix being a decent deposit and a loan paid monthly is like pay as you go deprication.

Something I'm happier with.

[Booster]

Thankfully the majority of people need finance to purchase their cars

[badgera]

I always though in an ideal world that I would just pay cash. But I'm no longer sure this is the best thing to do, I think it depends upon how often you are intending to swap you car, it's values and the resale.

If your planning to keep the car for say 3 years and move on the PCP route might actually save money.

Late last year Audi were doing great deals on A6, I think the figure was about £350 per month. This was for the 2.0TDI, but this is still around £30k's worth of car. Over the 3 years you pay £12600. Assuming that you don't make anything in trade in (i.e. you just get back any deposit paid) then you are £12600 down. Of course the car is going to have depreciated, £12600 is 42% of purchase, so not a bad rate. Therefore you have taken the hit on depreciation but still have your £30k in the bank on which you have been making interest so would be something like £4k up on the whole deal.

Of course this doesn't work for everyone, but a work collegue of mine has just bought a new Volvo S80 (for cash) after taking an £18k hit over 18 months on his previous S80. He could have leased his previous car for way less that £1k per month so been much better off with PCP.

[theduisbergkid]

[ QUOTE ]

Thankfully the majority of people need finance to purchase their cars

[/ QUOTE ]

[Waylander]

I bought mine with "cash":

stumped up half the amount in readies and slapped the rest onto my Egg card with 0% for a year [via getting back to authorise overdraft for an hour for the shortfall, buying on switch and then doing BT to Egg] then just switch from 0% deal to 0% deal. Will be paid off hopefully within the next 6 months [3 and 1/2 years later!]