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Is it a smart move to buy a car and to finance it?

Discussion in 'General car Chat' started by ViFeiler, 7 June 2017.

  1. ViFeiler

    ViFeiler Full member

    Messages:
    12
    From:
    SG
    Car:
    MB Kompressor
    I need a car. I observe that some consider their purchasing and financing in a vehicle financing organization. I heard, it can do all the leg work. It's convenient and one can even get a good deal. How true is it? How can it help me save cash? I'm still thinking if I would push with my plan in purchasing and consider a car financing. What's your advice?
     
  2. Lunchmoney

    Lunchmoney Track Warrior

    Messages:
    660
    From:
    Bournemouth
    Car:
    '98 JDM Impreza STI
    Finance will always be more expensive than paying everything upfront. If you can save up until you can afford what you want you'll be better off.
     
  3. Yugguy

    Yugguy Torque King

    Messages:
    4,786
    From:
    Rugby (expat Preston lad)
    Car:
    Merc C220Cdi Elegan
    There are pros and cons on both sides. I saved up and bought mine outright. It's an older higher-end car so has all the bells and whistles. And if I were to lose my job or whatever, I wouldn't have to give it up, where if it was on lease or finance I could lose the car.

    Flipside is it is older, I have a 2 year warranty but after that I'm gambling it won't break down.

    Lease cars, especially if you don't do too many miles, give you more peace of mind as they're covered comprehensively by the manufacturer warranty.
     
  4. obi_waynne

    obi_waynne Administrator Staff Member Moderator

    Messages:
    40,404
    From:
    Deal, Kent UK
    Car:
    A3 2.0 TDI
    There are so many cheap finance options out there now. Try someone like Zopa - they are new lenders and if you are credit worthy you get brilliant rates.

    I would tend to go for a car that is a few years old so it's had some depreciation, which is the biggest hidden cost in owning a car.

    Most finance deals, PCP and hire plans get you to pay the depreciation costs as you go. Save £1000's by getting a slightly older car.
     
  5. HyoTrout

    HyoTrout New member

    Messages:
    6
    From:
    SG
    Car:
    BMW X3
    I agree, finance can be more expensive. But there are institutions, other than banks, who offer low interest rates. Maybe you can check online.
     
  6. ViFeiler

    ViFeiler Full member

    Messages:
    12
    From:
    SG
    Car:
    MB Kompressor
    Thanks for all your replies. Just to give you a heads up, I tried to visit both my commercial bank and our local credit union just to have a glimpse of their car financing offers. Obviously, the loan rates and terms given by the credit union for auto purchase seems to be more attractive to me. The only thing though is that, they nominate the dealer instead of my actual choice. Is this really the case or should the loan be rejected in case I refuse getting from their nominated dealer?

    Paying in cash will be much cheaper because I also compared the over all cost and surprisingly for banks, its as if I am paying for 1 and 1/2 worth of the car. LOL.
     
    Last edited by a moderator: 20 June 2017
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