Here is my profound question to the experts..... How is best to buy a car...?
I believe if there are financial wizards on here, this thread may just improve the quality of our lifes.

£49k CLS for example

Lets look at the facts...for a high mileage user.

1. PCP - No good for personal purchase, as you are paying 5k interest EVEN with a 17k deposit. Thats borrowing 32k and being charged 5k for the privelage. Yes there is a GFV ( gauranteed future value ) but surely this virtue is negated by the fact that your paying and extra 10% for the car in the first place.

1a. LEASE PURCHASE- This is normally to be avoided, this is a sure fire way to royally "****" yourself. Your car will never be worth what you're balloon is. You are taking the power and giving it back to the dealer so they can get you in a new car, your paying silly interest. And you have that wonderful feeling that your balloon isnt gauranteed, your mileage needs to be watched, and that you are kinda only BORROWING the car...trust me it stinks.

2.CASH - Well even the most ****-like salesman will tell you this isnt the best way to buy a car. The cash dies when you put it in the vehicle, its buying power is finished and your investment ie the car is a sinking ship.


3.HP - Provided you can affort the high pcm payments this seems logical.. you look at the interest rate for borrowing the money see how much more for the car you are paying for the option to spread the payements and decide if its viable for you.


4.CLEVER INVESTOR ROUTE - I just figured this out...
Imagine if you decided on a car, lets say a CLS or an S class for 60k and you decided that you wanted it in 18 months or 2 years, how about you create some compound interest savings options that will accrue the total fund. For example you decided to put £1400 per month into the fund ( not accurate ) for 2 years. Wouldnt this be a good option.

SO NOW WHAT

Its over to you... I have often wondered how the rich buy cars... the rich arent stupid they are more frugal than we are... they drive db9's and ferraris thru careful money allocation and management...

It would be fruitless and frankly stupid for me to ask a person in a dealership for this advice, as would it be for you. These people are employed and are only doing a job with their given brief. They dont care about you, nor what is right, their job is to show you how you can "buy" their finance in a way that suits you. Fair enough I suppose but they will never be honest.

My advice to you before you give me your advice... is to gain evidence from the finance man about what his wife drives and how he has paid for the car, get proof of this and see if he is selling you what he would sell his own wife. I very much doubt he is.

I am not saying they are crooks...far from it. I just think that Car dealers need to be more flexible in their financial product... ie being truly honest for one. I think if they were to take a leap of faith and do that, the sales of cars would sky rocket.

So being sensible, I turn to those who WILL be honest... YOU... You may have already a high spec car, you may be a finance guru, you may be , like me, wanting to find out the most sensible way to part with your money, and make the car buying joy even more joyous.

Howard Ritchie

 

What is PCP? What is HP?

 

I believe PCP is a drug and HP is a technology company

 

PCP = Personal Contract Plans

HP = Hire Purchase

 

Wow, you are a very "Smart" guy :p :p

 

MAAA , silly me some of you are in the US and thus have a completely different financial thing goin on.
Hm! stratches chin..... the mighty merc savoirs havent saved me yet.

 

Ya, this guy is only 17, a moderator of MBWorld, goes to school, completes his homework, knowledgable about Benz, at nearing the 20K post mark

 

I ran the numbers when I purchased my CLS and I found that cash worked out best.

Borrowing money, you pay more interest than you make putting the cash in the "bank" (you cannot rely on the percentages of the stock market short term).

Leasing = renting and at the end you walk away.

This is for a personal car, I'm sure deductions for business use is a differnt story.

 

Cash is best way, paid cash for all my cars, money talks when you slap them in the face with green.

But my next car i think i will put like 10k down and make payments on the rest, while at the same time using half in mutual funds and the other half in just buying and selling random things that i can squeeze profits out of.

I'm in college right now and one easy way i make money is buy books from amazon.com that are still in circulation for like $10.00 or even like 5.00 and go to my school and sell them back for like 20-40. Its amazing how people just give their books away on the internet, gotta love it.

 

Haha I love you guys.

 

I just paid cash and financed $14000 of it for 1 year.. And I'm hurrying up and paying that off fast anyway as I HATE car payments.

 

Don't walk into a dealership with a sack of fish & chips . . . unless you own all fo the shops in a 5 mile radius.

 

Very nicely written.

I just can't feel bad about paying cash for the entire purchase.

I too hate financing and I have eliminated all debt down to a house mortgage that costs me $750/mo.

 

Nice Job Tishers! I've done the same thing but my mortgage is 867 a month, you can never go broke if you don't anybody anything!

 

Ricky your 17?

 

Interesting timing that this thread came to life today, the day I sent a $12,500 payment to UMB Bank to pay off the CDI... Now I wait 10 days for the pink slip!