New answers tagged car
0
Your valuation is 200% above market costs... Where are you looking at cars with wires hanging out.
The simple answer: buy less than 110k miles, one careful owner, MOT'd, and test drive it, you can get deals under 1500k pounds.
The not simple answer:
I paid two awesome cars from less savings than you did. I used a search engine and put in limits of 150,000km ...
0
Most of the answers are focused on the fact that in your situation you absolutely shouldn't be spending so much on a car (and they're for sure correct). But I just wanted to answer what I suspect was your intention in the question: "Should I pay in cash or pay in monthly installments"
and the answer is that it depends. Where I'm from it's very ...
2
You shouldn't be getting financing from a dealer
You should be going to your local bank(s). Lots of people write financing for cars, but the dealers take more profit than anyone, so their deals are usually more expensive than anything else.
Sometimes their partnerships with the highly motivated manufacturers can yield a better bargain, but that only applies ...
0
Spending the bulk of your savings on a £3000 car is a bad idea. You'll need to have a lot of money back for repairs, because repairs are very expensive when you pay others to do them.
At that funding level, the only sustainable option is DIY car maintenance.
You are simply being unrealistic to think you can take an older car and dole money out-of-pocket for ...
6
Your choices are clear:
If you like the car and want to keep it, then buy it. The purchase price is in your contract from 3 years ago and they can't charge you more than that. Since you're 26K under mileage, you're very likely to be getting a bargain. (Sounds like you think it's $7K-ish.) Any dealer of your car manufacturer can assist you with the sale, or ...
2
I wouldn't finance and pay interest if you don't have to.
In your position, something to consider, is a 2-4 year old car with an extended warranty. In general, I don't think extended warranties are worth it, but one scenario where I think they are worth it may apply to you:
If you are not considering purchasing a used car primarily because you don't want to ...
6
Trying to be polite to a car dealer is the surest way of losing money. Don't don't worry about it, they have the thickest skins of any profession, surpassed only by repo men and tow truck drivers, especially since he's bullshitting you about damages. They DO need to do an inspection, when they transfer ownership, but that's standard for legal reasons and it'...
0
Buying used cars is more expensive in the long run, and you have the money to buy a new/barely used car
Edit (clarifying for the comment below): I'm all for buying cars with up to 10/15k miles already on them (and still has some factory warranty) that are a cheaper than a full priced new car, what I'm against is what the top answer is suggesting "Buy a ...
4
It's very likely that your lease is with a finance company (e.g. GM Financial for GM cars) and the dealer isn't really involved. Typically, at the end of a lease, you can return your car to any dealer, not just the original dealer. If your lease allows that (read it, it probably does), then you can completely ignore everything the dealer is telling you. ...
2
As the new vs. old question is addressed well in other answers, I'd like to address the question of loan vs. cash.
Although taking out a loan costs additional money over the long run, there is a key advantage of a loan that has not been mentioned in other answers:
Regular payments on a car loan will build positive credit history. It sounds like you're pretty ...
2
With few exceptions, if you borrow money, you will pay interest. That means you are paying extra for that money. This interest makes whatever you buy significantly more expensive.
There are only 2 advantages to taking out a loan and not using the money you already have:
You will have more money available for emergencies and the unexpected (and life rarely ...
21
Always pay cash. If you cannot afford a new car right away, buy a used one. If you cannot afford a used car, you are in no position to afford a car loan.
Whether 75% of your savings is too much, is depending on your cash flow. I am sure my first car (during university times) cost me more than 75% of savings. And after I started working, I got another car ...
49
I just bought my daughter a car. A 2018 just coming off lease. 21,000 miles, and about half the price of the same car new. The money saved on insurance alone is significant. Her prior car was driven to 200,000 miles, and only the last 30,000 or so was heavy on repairs. In hindsight, we should have made the move at 150,000 or so. So her new car has about 80% ...
8
It all depends on the interest rate being offered. You cannot make a generalization.
New car loans from the manufacturer are subvented. This is a major benefit to buying new. This means the manufacturer pays part of the financing cost out of its margins, in order to encourage sales of new cars.
I recently got a new car loan at "0%" APR. In reality, ...
3
Yes, pay cash from savings to buy a car. 75% of your savings is probably fine, depending on your total savings and income level. This does not scale linearly, so concrete numbers would be helpful in better answering your question.
All cars have mechanical problems. Used cars probably have fewer than you think. New cars are a high price to pay to avoid them.
28
There is a shortage of used cars on the market right now as a result of the pandemic. It's an incredibly hot market for used cars, and the dealer is trying to secure what sounds like a very lightly-used car so they can make a nice profit. I've been regularly hearing of people being bought out of their leases early just so the dealers can have the additional ...
17
Be direct. "I would like to purchase the car, and am happy to talk financing options with you. I do not want to return the car." Just say that, every time they call.
Then, as Hart said, do some research into financing through banks - either your bank, a local credit union/bank, or a big national bank; each has its advantages, I tend to go in ...
96
If your current savings represents 15 months of salary and the car you are looking at purchasing costs 75% of your current savings, that means that buying a car that costs 11.25 months of your current salary. That is an insanely expensive car relative to your means. From a financial perspective, buying this car would be devastating. I would strongly ...
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I feel like they are pressuring me to do something I don't want to.
Not to mention they are literally calling my number twice a week
leaving a voicemail.
Of course they are, they want to make money by selling it themselves and more money by selling you a new lease.
What option do I have?
If your lease agreement specifies a post-lease purchase price and ...
2
I personally would never recommend loaning money to a stranger. However, there are some used car dealerships that will sell your vehicle on consignment. Typically they charge either an upfront fee, a percentage of the sale, or both, and they handle cleaning the car, showing it, and selling it. Many of them handle financing too.
I can't be sure of this, but I ...
3
Contrary to other answers, this is possible and does happen. (Other answers are correct that it's often a bad idea, but that's not part of your question.)
This is called owner financing or seller financing. It's more common with houses, but it's possible with a car. In general, this kind of financing follows the same steps as financing from a corporate ...
5
Selling an item by becoming the lender, involves nothing but risk. When a bank makes a car loan, they calculate the risk.
They estimate a% will run into financial trouble.
they estimate b% will fail to insure the vehicle and it will be lost to accident or theft.
They estimate c% will just stop making payments for other reasons.
They factor in inflation ...
2
Congratulations. You have saved enough money now, to setup a needed purchase that won't take place for another 2 or three years, if there are no surprises.
Lets run some numbers. You have saved $20,000 and that would buy you a 3 year old make and model X. Your concern is that in 2 or 3 years the car price would have risen higher
the measly interest would ...
34
Is there a way it is normally done that wouldn't involve a lot of risk for me or a bunch of extra work?
This is the real question and the answer is no. The other answers go over the general reasons why you wouldn’t do this. As referred to in the other answers generally either the buyer arranges financing themselves at their bank or the dealer will help ...
47
You’re asking about a hypothetical situation where someone sells a vehicle privately on an instalment plan.
Even with (commercial) car dealers, my experience has been that with car sales (as opposed to hire-purchase and the like), the dealer gets their money in full upon release of the vehicle. Any finance is done with another entity. The lender gives the ...
4
What if your buyer doesn't pay his insurance (or bother to carry full coverage) and wrecks the car? Then you're reduced to having to sue for your money. You don't bear legal/financial responsibility for any accidents they have as long as they (the buyer) are titled as the owner and you simply put a lien on the vehicle. Still, any uninsured/underinsured ...
2
-Short answer: No. If your main concern is hedging against Used Car inflation over such a short time period your best option would be to buy the car now.
All of your other options are gambles (due to the short time frame and the potentially double digit inflation for Used Cars). You could hedge against Core inflation using an I-Bond or TIPS, but that won't ...
3
This seems like over-planning. A car is just one of many things (though one of the larger things) you will presumably buy over the next few years, and you will hopefully be saving additional money over that time as well. A few percentage points of uncertainty about car price inflation seems lost in the noise.
Just keep a reasonable amount in a low-risk ...
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