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Cash or Finance

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couplands

Member Since: 26 Oct 2006
Location: Peak District & Cornwall
Posts: 230

2012 Discovery 4 3.0 SDV6 HSE Auto Sumatra Black

Cash or Finance

If you had the cash to buy a D3, would you use the cash for the car or take finance and invest the cash.

cheers

simon

11th Dec 2006 5:49 pm

Pelyma

Member Since: 06 Jan 2005
Location: Patching, Sussex
Posts: 15496

Cash every time DS3 TDV6 HSE - Silver with Alpaca (old one) Gone
DS3 TDV6 HSE- Silver with Alpaca (new one) Gone
D4 HSE Lux - Montalcino Red Gone
Porsche Cayenne V8 Diesel S

11th Dec 2006 6:03 pm

cheddarwards

Member Since: 07 Aug 2006
Location: Somerset
Posts: 169

2006 Discovery 3 TDV6 HSE Auto Java Black

There are an awful lot of variables to consider, but ultimately it boils down to how much will borrowing the money cost versus how much will you make by investing the money elsewhere.

Say you were to borrow the money on a personal loan at 5.8% APR (always cheaper than full payout hire purchase) how much could you make on an investment over the same timescale?

One thing to consider is what if something unexpected happened & you needed some cash in a hurry - if it was ploughed into the D3 it is more difficult to get out.

I had a very similar issue when I purchased my Disco, but I ultimately chose to pay cash, with the thought that if I needed cash in the future I could get a personal loan.

HP with a balloon is another option, but obviously you pay interest on the outstanding balloon for the full period of the agreement & this can add up to a lot of money over 3 or 4 years.

11th Dec 2006 6:07 pm

Pelyma

Member Since: 06 Jan 2005
Location: Patching, Sussex
Posts: 15496

I'm an investment adviser and I would pay cash. Limiting your liabilities gives you more flexibility IMO. Yes over the period that I have owned a D3 my money would have earned more invested but if the worse happens I only have to worry about selling the car for what I can get and not getting enough to pay off a finance company. But like everything in life, what's good for me might not be good for you - perhaps I should rephrase that

DS3 TDV6 HSE - Silver with Alpaca (old one) Gone
DS3 TDV6 HSE- Silver with Alpaca (new one) Gone
D4 HSE Lux - Montalcino Red Gone
Porsche Cayenne V8 Diesel S

11th Dec 2006 6:53 pm

couplands

Member Since: 26 Oct 2006
Location: Peak District & Cornwall
Posts: 230

Thanks for the views.

From my simple calculations the cost would be roughly equal, but the advice that suggests a debt free purchase is easier to manage if/when things go wrong is the way I'd prefer to go.

cheers

simon

Last edited by couplands on 12th Dec 2006 7:13 am. Edited 1 time in total

11th Dec 2006 10:54 pm

dochummer

Member Since: 02 Nov 2006
Location: Pacific Northwest
Posts: 69

x2. I would pay cash. Much less stress overall... - and the bank won't dictate the type of insurance coverage to get... 2005 Zambezi V8 SE

12th Dec 2006 6:25 am

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