Thinking of a car next year and got my eye on either a BMW M240i or a 370Z Nismo. Both used as I would not get a new car (personal preference)
Thing is, I’m currently debt free and don’t want to finance the car … however, I’m looking for opinions of others and their views.
So the cars can be had for 22k … I plan to pay half cash and half with a low APR loan (3.4%) over 3 years. I like to own them rather than lease and also it means Im never upside down as the car will be worth more than the outstanding loan amount.
I can easily and comfortably repay the monthly amount and makes less than 10% of my monthly take-home.
Cars are my passion and for me, it’s money I’d feel happy spending … Just not 100% on the borrowing part as I got myself out of a hole years back but now totally transformed.
Plan B is to wait another 8 months and save some more and buy it all cash.
I can’t give you any advice on loans or anything but if you really want the car, save up! Much better to be debt free and own it outright than to be in debt for something you don’t need. That’s just the way I am though
I strongly advise you to wait eight months and buy outright. I always think it makes more sense to do this if you have (or will soon have) the money, as even the smallest amount of finance will find you paying a great deal more than the car is actually worth.
It’s what I’ve done with my cars and I’ve been very happy to do so. I’ve always owned them outright.
My general principle of never wanting to add unnecessary debt applies to all areas of spending, not just cars.
Yep, echo the others here. If you can buy outright, do so, being debt free is so liberating (haha sorry!)
Remember, borrowing is stealing from your future self!
(But I understand the neeeed for a nice car, just picked up a fabulous Mini Cooper S as a daily driver and it is fun fun fun. Does need a mortgage for the fuel bill though…)
Personal preference is also pay straight up but I tend to pay under £10k so it’s much easier to achieve. (I also run them for a decade or more before changing so I’m not a ‘car person’ in that sense.)
Generally, I’m in the “buy it outright camp”, but that’s usually for lower value items.
It also depends on your personal situation - Is there anything in the next 3 years which would need cash? How are the rest of your savings? Etc etc (rhetorical question, you don’t need to tell me ).
For some people, paying £16 per month (if my maths is correct), for the luxury of keeping £11,000 in the bank for an emergency would be worth it (£16 is the interest per month I believe).
It’s certainly something I’d consider, and if I had no other savings, I’d probably end up doing it.
Especially given the fact you’ve said you are debt free (congrats), and the payments would be less than 10% of your incoming payments each month.
Either way, I don’t think you can pick a wrong choice - Only you can weigh up those options and work out what you are comfortable with.
Remember the protection offered by Section 75 of the Consumer Credit Act 1975 means it’s worth paying for some of the car with a credit card. It only has to be 1p for the Act to have effect, but if you have sufficient credit and the cash to cover it, you might as well pay for all or a good chunk of it on a card, and pay it right back come statement time.
).
