Poll: Do you buy brand new car with full payment?

masterboy123

I wonder if there are people out there who buys a brand new car with a full payment on purchase?

colm_mcm

They are rare enough but they’re out there.
When I sold cars you’d have the old money types that would just write the cheque for the amount there and then. Very rare though.

Heres Johnny

We bought 2 cars last year with full payment upfront, they were both used and they were both about €20,000 each. 2014 BMW and a 2014 Audi.
So we could have bought a new car with cash (but not the type of cars I like they are well out of my cash range!!)
I put money aside now for when I change again in the future instead of funding a loan.

Always bought my cars outright, they are usually a good bit cheaper and older but didnt have another use for the cash this year so just went for it

If somebody buys their first car without a loan and saves instead of borrowing it is very possible to keep this cycle going.

terrydel

Heres Johnny wrote: »

We bought 2 cars last year with full payment upfront, they were both used and they were both about €20,000 each. 2014 BMW and a 2014 Audi.
So we could have bought a new car with cash (but not the type of cars I like they are well out of my cash range!!)
I put money aside now for when I change again in the future instead of funding a loan.

Always bought my cars outright, they are usually a good bit cheaper and older but didnt have another use for the cash this year so just went for it

If somebody buys their first car without a loan and saves instead of borrowing it is very possible to keep this cycle going.

Very few people can save at that level given the enormous cost of living in this country.
I've bought 3 cars in my life, only one for me. The dearest was 11k or so for a car for my dad, but I bought that after getting a nice redundancy payment.
The two other cars were 6k and 1.4k.
I've spent 10k or so buying myself a nearly new motorbike also.
I wouldnt even consider spending anything above those figures on a car to be honest, even with a loan, never mind shelling it out in cash.

fits

Bought last two cars with cash (not new). You think very long and hard about spending the cash after saving it whereas it’s much easier to spend money from a loan. I detest paying interest so that’s me.

CoBo55

With 0% finance why would you do that?

Sexual Chocolate

Was always of the assumption that a lot of retired folk generally buy and pay in full. Or the rich.....

CoBo55

CoBo55 wrote: »

With 0% finance why would you do that?

First time buyer... where can I shop around for such a thing?

bee06

I bought my last car (brand new) outright and currently waiting for my next car to be delivered that I’ll also be paying for in full. I’m not rich but I’m very good at saving with a well paid job. My husband bought his car last year outright as well (used but new enough).

lmimmfn

CoBo55 wrote: »

With 0% finance why would you do that?

While 0% is great, you can get a discount buying a new car with cash( better discount if not trading in) that you won't get with 0% finance.

I did both a few years ago, generally though 0% is better if you save regularly and your savings would only cover the car as better to have cash in reserve for emergencies but if you had 70k in the bank and buying a 30k car I would pay cash and get it for 29k or so.
0% also usually has a 30euro monthly fee to cover servicing so over 3 years that's 1080euro. Paying cash the servicing is free.

Heres Johnny

terrydel wrote: »

Heres Johnny wrote: »

We bought 2 cars last year with full payment upfront, they were both used and they were both about €20,000 each. 2014 BMW and a 2014 Audi.
So we could have bought a new car with cash (but not the type of cars I like they are well out of my cash range!!)
I put money aside now for when I change again in the future instead of funding a loan.

Always bought my cars outright, they are usually a good bit cheaper and older but didnt have another use for the cash this year so just went for it

If somebody buys their first car without a loan and saves instead of borrowing it is very possible to keep this cycle going.

Very few people can save at that level given the enormous cost of living in this country.
I've bought 3 cars in my life, only one for me. The dearest was 11k or so for a car for my dad, but I bought that after getting a nice redundancy payment.
The two other cars were 6k and 1.4k.
I've spent 10k or so buying myself a nearly new motorbike also.
I wouldnt even consider spending anything above those figures on a car to be honest, even with a loan, never mind shelling it out in cash.

Off top of my head the cars I've bought were 1999 316i e36 13k (with a loan, the only one I've ever got and sold it for 12k a year later), 8k 2000 318i e46, 5k 1999 318i e46 (yes I went back in years but I moved to UK that year), 8k e39 530i 2001, then didn't drive for 3 years as living in City centre, 3 k e39 525i 2004, 5k e60 523i 2007, then these 2 last year for 20k each, a 530d m sport and an a6 s line both 2014. Just had the cash so went ahead with it. I do save a lot and I have some small investments going so can do it.
Can't afford the big German saloons I like in cash though, but I reckon the 530d will be replaced with a 530e g30 in cash in about 3 years time when they fall to a manageable level

deathtocaptcha

CoBo55 wrote: »

With 0% finance why would you do that?

To stop you from spending money you don't have and prevent you from feeling wealthier than you actually are which could compromise your future financial standing.

masterboy123

So far it's interesting to see the results:

55% - NO
45% - YES

I expected higher percentage for No.

Comhrá

Always paid cash for new cars over the years.

I'd be open to a PCP in the future though, if I got a 0 % deal on a model I

liked. I have very low annual mileage so wouldn't have an issue there.

BarryD2

deathtocaptcha wrote: »

To stop you from spending money you don't have and prevent you from feeling wealthier than you actually are which could compromise your future financial standing.

This, apart from a car bought years ago on some sort of hire/ purchase scheme, just saved since a bit each year and used that to fund a nearly new car. Keep that for c 8 years till it starts to cost more serious repairs, rinse & repeat.

Don't have to worry about mileage or the odd scratch from country ditches. Just keep it serviced and works out well enough.

Mad_maxx

lmimmfn wrote: »

While 0% is great, you can get a discount buying a new car with cash( better discount if not trading in) that you won't get with 0% finance.

I did both a few years ago, generally though 0% is better if you save regularly and your savings would only cover the car as better to have cash in reserve for emergencies but if you had 70k in the bank and buying a 30k car I would pay cash and get it for 29k or so.
0% also usually has a 30euro monthly fee to cover servicing so over 3 years that's 1080euro. Paying cash the servicing is free.

I've asked for cash discount deals down the years, it never made a bit of difference

Saving a grand by paying cash in full is madness, very poor use of capital, you would need to be getting it for 27 k

Mad_maxx

Sexual Chocolate wrote: »

Was always of the assumption that a lot of retired folk generally buy and pay in full. Or the rich.....

The rich are not afraid of debt and understand it

CoBo55

lmimmfn wrote: »

While 0% is great, you can get a discount buying a new car with cash( better discount if not trading in) that you won't get with 0% finance.

I did both a few years ago, generally though 0% is better if you save regularly and your savings would only cover the car as better to have cash in reserve for emergencies but if you had 70k in the bank and buying a 30k car I would pay cash and get it for 29k or so.
0% also usually has a 30euro monthly fee to cover servicing so over 3 years that's 1080euro. Paying cash the servicing is free.

You can refuse the service pack, I did, it isn't obligatory. You can still haggle, I saved 2k by shopping around.

Sonny noggs

Bought my current car (2010 reg) new with a cheque, will do the same with the next new car I get.

CoBo55

Mad_maxx wrote: »

The rich are not afraid of debt and understand it

I'm not rich and understand debt... Stupid statement.

Mad_maxx

Mad_maxx wrote: »

The rich are not afraid of debt and understand it

We're talking regular car purchases here. Not debt that's being put to use.

Mad_maxx

CoBo55 wrote: »

I'm not rich and understand debt... Stupid statement.

A lot of people have an instinctive aversion to debt, you regularly hear people advising people ( who happen upon a lump sum) to pay off tracker mortgages

Mad_maxx

[Deleted User] wrote: »

We're talking regular car purchases here. Not debt that's being put to use.

Availing of sub 3% debt to finance a car purchase is good business.

You could then potentially use the thirty grand to make home improvements, personal loans are close on 8% in most cases

deathtocaptcha

deathtocaptcha wrote: »

To stop you from spending money you don't have and prevent you from feeling wealthier than you actually are which could compromise your future financial standing.

This shows a very poor understanding of how to manage your finances.

masterboy123 wrote: »

So far it's interesting to see the results:

55% - NO
45% - YES

I expected higher percentage for No.

I don’t think people read the question or are ignoring it. Most of the posts are people buying sub 10k cars for cash I bet the same people are voting in the poll. It should only be people who buy brand new cars who vote.

No way the real figure for new cars being bought for cash is anywhere near 45%.

ShadowHearth

Kole Odd Suspicion wrote: »

This shows a very poor understanding of how to manage your finances.



I don’t think people read the question or are ignoring it. Most of the posts are people buying sub 10k cars for cash I bet the same people are voting in the poll. It should only be people who buy brand new cars who vote.

No way the real figure for new cars being bought for cash is anywhere near 45%.

This. I was a bit surprised on how many people buy with cash Brand new cars, then I sow posts where people talk about second hand older cars. So poll itself is botched.

I voted no, as my current car was very first new car I ever bought. If I had 25k, I would still have taken finance. I prefer spending banks money and have my own for emergency. With very low apr rates it's a small price to pay. My PCP is at 0%. I am good at managing my money and do maths before I sign up for any finance. So far, it worked.
When I was younger and bought old cars, and would finance half of it, even if I could buy it out right. Again, same reason as before - I better have extra cash if car poops itself. Worked out well too.

Mad_maxx

Mad_maxx wrote: »

Availing of sub 3% debt to finance a car purchase is good business.

You could then potentially use the thirty grand to make home improvements, personal loans are close on 8% in most cases

People are interested in shiny things, not good business. For the average person, they just spend more on their car and then have less money to invest elsewhere. A new iPhone wouldn't be a good purchase over a phone a third the price just because it's interest-free.

Kole Odd Suspicion wrote: »

No way the real figure for new cars being bought for cash is anywhere near 45%.

You're not going to get a realistic picture of society from a Motors forum.

It's like doubting a poll in a fitness forum saying no way 50% of people go to the gym over three times a week. Or looking at a guitar forum poll incredulous that over 35% of people in Ireland own guitars worth over 1,000euro.

Mad_maxx

[Deleted User] wrote: »

People are interested in shiny things, not good business. For the average person, they just spend more on their car and then have less money to invest elsewhere. A new iPhone wouldn't be a good purchase over a phone a third the price just because it's interest-free.



You're not going to get a realistic picture of society from a Motors forum.

It's like doubting a poll in a fitness forum saying no way 50% of people go to the gym over three times a week. Or looking at a guitar forum poll incredulous that over 35% of people in Ireland own guitars worth over 1,000euro.

That's like " so random"

CoBo55

Mad_maxx wrote: »

That's like " so random"

A nice way of saying it's gibberish..

Varta

Mad_maxx wrote: »

Availing of sub 3% debt to finance a car purchase is good business.

You could then potentially use the thirty grand to make home improvements, personal loans are close on 8% in most cases

I feel as though I've been transported back to the celtic tiger days. What if someone does as you suggest and then suffers an income drop?

rob316

When alot of PCP deals are 0% I couldn't seen any point in paying your own money up front.

Some people don't like the idea of owing money, I'm the opposite if I owe you money that's your problem

rob316

Varta wrote: »

I feel as though I've been transported back to the celtic tiger days. What if someone does as you suggest and then suffers an income drop?

They'll possibly default on the payments, the car will be repossessed but they will still have their 30k. Like I said if its a few % or less that's cheap money, makes no sense using your own.

CoBo55

CoBo55 wrote: »

A nice way of saying it's gibberish..

What I said was gibberish?

Varta

rob316 wrote: »

They'll possibly default on the payments, the car will be repossessed but they will still have their 30k. Like I said if its a few % or less that's cheap money, makes no sense using your own.

Nope, he suggested using the 30 grand for home improvements, which is why I was reminded of the tiger years.

Mad_maxx

Varta wrote: »

I feel as though I've been transported back to the celtic tiger days. What if someone does as you suggest and then suffers an income drop?

A thirty grand purchase via pcp is not going to be what sinks anyone and having dropped thirty grand in one lump will leave them more short should job loss occur , that isn't me advocating for new car purchases, I'm arguing in favour of using cheap debt to one's advantage given the opportunity

Most people could do with making home improvements in the sense of insulation or general reductions in heating bills, if you need thirty grand to do this you will pay at least 6.8% for a personal loan, this makes splashing out a thirty grand lump on a car foolish if you can finance the car for under 4% max

Even maintaining reserves is sensible

Mad_maxx

rob316 wrote: »

When alot of PCP deals are 0% I couldn't seen any point in paying your own money up front.

Some people don't like the idea of owing money, I'm the opposite if I owe you money that's your problem

Many are raised to view debt as inherently bad

Mad_maxx

[Deleted User] wrote: »

What I said was gibberish?

Unrelated abritary comparisons

TheShow

0% finance is a no brainer, keep you cash in your back pocket for a rainy day.

Mad_maxx

TheShow wrote: »

0% finance is a no brainer, keep you cash in your back pocket for a rainy day.

Under 3 % is a no brainer

Varta

Varta wrote: »

I feel as though I've been transported back to the celtic tiger days. What if someone does as you suggest and then suffers an income drop?

You can’t just hand the car back and walk away. You will lose out to an extend but you won’t have a nose around your neck.

Even if you have a car loan not pcp you can sell the car and clear the loan if needs be.

I really don’t get people fear of finance, it’s a valuable part of any persons financial planning and management.

3rdDegree

TheShow wrote: »

0% finance is a no brainer, keep you cash in your back pocket for a rainy day.

I didn't think you can still get 0% finance anymore. I certainly haven't come across it since the "good times" have returned.

I'd have thought that if you can afford to buy a new car straight, without obviously clearing out all (or a huge chuck of) your savings, it's better than paying interest. Not an expert by any stretch, but surely paying interest on a loan for a heavily depreciating assert is not good?

But the reality is, most can't splash out on a brand new car, pay cash and have enough savings left for a rainy day. I really can't see how the results of that poll are a true reflection.

Heres Johnny

TheShow wrote: »

0% finance is a no brainer, keep you cash in your back pocket for a rainy day.

To play devils advocate here, 0% finance is on only brand new cars. Cheap credit pushing people into new cars as opposed to used cars where there will be a higher interest rate, 0% is some carrot to dangle in front of someone.
Now however, you are into the steepest depreciation curve your car will ever face.

If its buying new car in cash v 0% and there is absolutely no discount for buying in cash, then 0% is a no brainer.

Buying a new car at 0% because you think its great to have free credit where all you wanted in the first place was a used car then its not a no brainer.

But slightly off topic.

In my particular case, I bought used cars and would have had a significant interest rate so bought in cash.

Mad_maxx

Heres Johnny wrote: »

To play devils advocate here, 0% finance is on only brand new cars. Cheap credit pushing people into new cars as opposed to used cars where there will be a higher interest rate, 0% is some carrot to dangle in front of someone.
Now however, you are into the steepest depreciation curve your car will ever face.

If its buying new car in cash v 0% and there is absolutely no discount for buying in cash, then 0% is a no brainer.

Buying a new car at 0% because you think its great to have free credit where all you wanted in the first place was a used car then its not a no brainer.

But slightly off topic.

In my particular case, I bought used cars and would have had a significant interest rate so bought in cash.

Thread doesn't apply to used cars

Mad_maxx

3rdDegree wrote: »

I didn't think you can still get 0% finance anymore. I certainly haven't come across it since the "good times" have returned.

I'd have thought that if you can afford to buy a new car straight, without obviously clearing out all (or a huge chuck of) your savings, it's better than paying interest. Not an expert by any stretch, but surely paying interest on a loan for a heavily depreciating assert is not good?

But the reality is, most can't splash out on a brand new car, pay cash and have enough savings left for a rainy day. I really can't see how the results of that poll are a true reflection.

That's the kind of principalled opposition to debt I was referring to

CoBo55

Mad_maxx wrote: »

Unrelated abritary comparisons

Couldn't have said it better myself.

BarryD2

Mad_maxx wrote: »

I've asked for cash discount deals down the years, it never made a bit of difference.

Cash is the lifeblood of any business. Ask anyone selling something whether they'd prefer to be paid in full up front or in installments over a period of time. If they say the latter, you'd want to be thinking why? What are the advantages to them and how much extra are you paying to cover the risk and ongoing 'paperwork'?

All these low finance deals are marketing exercises and ultimately you're paying for them.

TheShow

I have 0% PCP on my car, bought new in 172 and will be looking for a further 0% deal when it comes time to change it.
Alot of the car brands are offering 0% finance on new vehicles.
In reality, I think the OP is referred to new car purchases. You wouldnt get 0% on a used car.

If you don't have the savings for a used car, most likely CU loan or bank loan at 8%, and depending on the loan amount, a loan at 8%+ could cost as much on monthly repayments as a 0% agreement so, depreciation aside, I'd rather have a new car than potentially buying someones problem car.

TheShow

BarryD2 wrote: »

Cash is the lifeblood of any business. Ask anyone selling something whether they'd prefer to be paid in full up front or in installments over a period of time. If they say the latter, you'd want to be thinking why? What are the advantages to them and how much extra are you paying to cover the risk and ongoing 'paperwork'?

All these low finance deals are marketing exercises and ultimately you're paying for them.

in terms of a car purchase, it makes little difference to the car dealer. they will still get the funds in one lump sum and most likely some commission from the finance house too.
So essentially they probably make more margin on a car they sell via finance.

beggars_bush

Saving for anything is always a better strategy.

I know people who have bought their cars on finance, furniture on finance, electrical appliances on finance just to have all new.
No way is that sustainable.

It's a bad habit to have and I think a lot of people will spend too much on a car when they mainly look at the monthly cost

beggars_bush

beggars_bush wrote: »

Saving for anything is always a better strategy.

Is it though? Spending years making do without while you try to save or have it now and pay it off over the time while having the comfort and enjoyment of the product.

Once you can afford the finance/loan then it’s a very viable and often sensible choice.

There is a ingrained fear of finance in some people, they almost see it as a badge of Honour that they have no loans etc, whereas other are happy to borrow within their means to have the comforts they want.

Mad_maxx

BarryD2 wrote: »

Cash is the lifeblood of any business. Ask anyone selling something whether they'd prefer to be paid in full up front or in installments over a period of time. If they say the latter, you'd want to be thinking why? What are the advantages to them and how much extra are you paying to cover the risk and ongoing 'paperwork'?

All these low finance deals are marketing exercises and ultimately you're paying for them.

The garage you bought from isn't lending out the credit. ( deutsch bank or bnp Paribas probably are)

Toyota in Galway or mullingar get their total before you drive out their gate

Mad_maxx

TheShow wrote: »

I have 0% PCP on my car, bought new in 172 and will be looking for a further 0% deal when it comes time to change it.
Alot of the car brands are offering 0% finance on new vehicles.
In reality, I think the OP is referred to new car purchases. You wouldnt get 0% on a used car.

If you don't have the savings for a used car, most likely CU loan or bank loan at 8%, and depending on the loan amount, a loan at 8%+ could cost as much on monthly repayments as a 0% agreement so, depreciation aside, I'd rather have a new car than potentially buying someones problem car.

In 2019, almost every single automaker is hand in glove with the banking sector, margins are so small for automakers, in order to sell large volumes, they need easy credit facilities