How do you pay for a car?

I usually spend cash having put the dosh aside in a fund.

My friend always goes down the route of a PCP type of payment. His argument is, his present car covers the deposit, the payments are low (I'm not convinced as anything not 0% isn't a low rate in my book), then when the contract is up, he rolls the vehicle over as the deposit for his next one.

I really don't like the fact that you never actually own that vehicle until you pay a lump sum at the end of the contract, of course unless you roll it over again and again. Surely this ties you to one marque? What happens if you retire and cant afford a lump sum could you face having to write off all the money you have paid?

Call me confused dot com if you want, but I cant get my head around his logic. Updated- Waiting for a Scotland v England 6 Nations home win. 24th Feb 2018
Gone-1972 88 SWB Soft top
Gone-1981 24v FFR Lightweight
Gone-2009 Freelander 2 TD4 GS manual
Gone before it bankrupted me- 2008 Discovery 3 TDV6 Auto
2013 Freelander 2 SD4 GS Auto

How do you finance your house? The vast majority of us rent or buy on mortgage for 25 years; so the house belongs to someone else for all that time, and we don 't bother that we haven't bought it outright. So car finance is no different. Buying on finance enables you to have the use of the car that much earlier.

Apparently when you see deals like 0% finance it has already been factored into the selling price so you really should go down that route for a new car. I used to pay cash but now settle for some finance on the grounds that I can usually invest money at a higher rate of return than I am paying the finance company and also the salesman gives me a better deal on the trade in if he is getting commission on the finance. When I last traded in the guy said that if I took some finance he would give me an increased trade in that would pay the interest on the loan over 3 years. 3 x FL1 2 manual + 1 auto
5 x FL2 4 manual + 1 auto
Now Discovery Sport P250 MHEV SE

One clear advantage of a finance deal is if the value of the car drops significantly below expectations. I did this once on a FL1 - at the end of the deal the car was worth less than the final payment, so I just handed it back. You have to be careful that there is no damage, and that you don't intend to exceed the stated mileage, or they can charge you extra.
It might have been worth my while to do this with the DS - trade in value is a bit less than I expected, possibly due to a lot of moaning on the DS forum (and despite its being my best LR vehicle to date!). Ex AA Series III LWB Safari - Gone
300TDi Disco (bought new - terrible car) sent back after 18 months
Freelander 1 Estate - leased, given back at end of lease
200TDi Disco (bought from a mate with 100,000 on the clock) - Gone
Disco 2 TD5 - sold and exported to France
FR2 TD4 GS - Gone
FR2 SD4 HSE - Now changed for a DS
New model ex-demo Evoque S 180 in white
Unable to order a new DS, so gave up. Now have a Volvo S90 Recharge.

If you change your car every 3 years, then it's the easiest way to do it.

All you are doing is financing the depreciation, something that would happen anyway.
Only difference is you don't have to find a massive lump sum upfront, and find a way to get rid at the end

Pay cash so you can modify it as much as you want. Procrastination, mankind's greatest labour saving device!

Acoustic insulation ARB TPMS 3xARB air compressors After cooler Air tank On-board OCD pressure air/water cleaning Additional 50L fuel Carpet in doors ABE 2x1kg Waeco 28L modified fridge Battery 4x26ah Solar 120w Victron MPPT 100/20 DC-DC 18amps 175amp jumper plug Awning 6x255/60R18

^ agree.

I just don't like the idea of not owning my car.

If need be get a loan, pay it up and pay it off.
Even with a loan it still feels like your own car.
But the extra smiley bit is when you pay it off and it really does become yours.

You going for a D4 then McS  FL2 now gone and have a couple of items left for sale:-

Brodit active iPhone holder + Brodit dash clip,
Bluetooth Music Streaming Module.

Assuming that:

A) You have the cash.
B) You have no better, potentially more tax efficient, use for your readily available cash than tying it all up in buying a car.

You are not tied to one marque on pcp if you trade with a broker like drive the deal or similar. Personally I always finance my cars and hope to get a few years payment free driving after I paid for it. Had my Disco for 7 years after finance was paid off. Only down side is that you tend to spend that money on other things then it's a shock when you need to buy another car. Landrover - turning owners into mechanics since 1948

2014 Orkney grey Freelander SD4 GS.
2004 Zambezi silver Discovery 2 Td5 (Gone)
1963 Surf blue Morris Mini Minor Super de Luxe (my little toy)

People who finance cars in general get more expensive cars that they don't have the money for & end up on the finance treadmill.

I can service my car when & where I like, change insurance, it's also cheaper down under if it is a non finance car. My car is 100% private so no tax benifits except lower annual registration costs. Procrastination, mankind's greatest labour saving device!

Acoustic insulation ARB TPMS 3xARB air compressors After cooler Air tank On-board OCD pressure air/water cleaning Additional 50L fuel Carpet in doors ABE 2x1kg Waeco 28L modified fridge Battery 4x26ah Solar 120w Victron MPPT 100/20 DC-DC 18amps 175amp jumper plug Awning 6x255/60R18

It doesn’t need to be for business use to get a tax benefit.

If I borrow to pay for the car, I pay between 2.9% and 6.9% interest. If I use my spare cash to top up my pension, I get 40% of it straight back from the tax man

And if your pension is at maximum already?

How does it work then? Regards

David

Lovely i6 has now gone, but not me......

Please let me know if anything in my post offends you, as I may wish to offend you again......

If your pension’s at the maximum already then I’d say that’s a nice problem to have!

Down under I won't get a pension, too many assets, not that I have bucket loads. Have retired very early so if I can't live off what I have now I can forget about any chance of living off a pension.

All cars I have owned have paid cash so I know how much I can spend. Procrastination, mankind's greatest labour saving device!

Acoustic insulation ARB TPMS 3xARB air compressors After cooler Air tank On-board OCD pressure air/water cleaning Additional 50L fuel Carpet in doors ABE 2x1kg Waeco 28L modified fridge Battery 4x26ah Solar 120w Victron MPPT 100/20 DC-DC 18amps 175amp jumper plug Awning 6x255/60R18

Me too......retired early and took pension.......now just wasting time

Tigger......no problems here  Regards

David

Lovely i6 has now gone, but not me......

Please let me know if anything in my post offends you, as I may wish to offend you again......