Advantages of buying car/motorcycle with finance over buying with cash?

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hsv
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#1
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#1
Advantages of buying car/motorcycle with finance over buying with cash? Do people do this because they don't want to save up or are there any other advantages of purchasing with finance over paying with cash? Suppose this can relate to other purchases as well.
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DotDotCurve
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(Original post by hsv)
Advantages of buying car/motorcycle with finance over buying with cash? Do people do this because they don't want to save up or are there any other advantages of purchasing with finance over paying with cash? Suppose this can relate to other purchases as well.
I bought mines on finance as I wanted a newish car, that is very fun to drive, decent on fuel and that would last me the next 5 years. It wasn't that I didn't want to save up, it was just easier and I get the car years earlier this way. All I am forking out is an extra £1500 over the 5 years.

Once I hit 25 I can decide whether to keep my hot hatch or trade it in for something even more fun.
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jusdorange
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(Original post by hsv)
Advantages of buying car/motorcycle with finance over buying with cash? Do people do this because they don't want to save up or are there any other advantages of purchasing with finance over paying with cash? Suppose this can relate to other purchases as well.
cars are different from other loans

but to answer your question

the majority of cars are bought on finance, and dealers usually give some sort of discount because it works well for them

works well for you because essentially you fix depreciation

you have that spare cash to invest elsewhere, may get more on that return than the apr charged for the car, on a side note, APR for cars is at a historical low, so no better time to get it

where it doesn't pan out, is for smaller cars, the repayments are too high, better to buy outright
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hsv
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#4
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(Original post by jusdorange)
cars are different from other loans

but to answer your question

the majority of cars are bought on finance, and dealers usually give some sort of discount because it works well for them

works well for you because essentially you fix depreciation

you have that spare cash to invest elsewhere, may get more on that return than the apr charged for the car, on a side note, APR for cars is at a historical low, so no better time to get it

where it doesn't pan out, is for smaller cars, the repayments are too high, better to buy outright
fix depreciation because the dealer agrees to buy the car/motorcycle at a certain price with some finance offers, is that what you mean or fix depreciation in some other way?
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JC.
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#5
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If you're buying brand new and you've got the cash, you can often get a better deal by signing up to the finance, paying the first payment and then settling the finance as opposed to just handing over cash.
The dealer will get a kickback from the finance co so there may be a little more wiggle room in your favour.

No point having finance if you've got the cash though - it just costs you more in the long run. Even on 0% it's still a big debt over your head.

If you do insist on having finance, make sure you have gap insurance too. You'll be glad if you did and need it!
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hsv
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#6
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(Original post by JC.)
If you're buying brand new and you've got the cash, you can often get a better deal by signing up to the finance, paying the first payment and then settling the finance as opposed to just handing over cash.
The dealer will get a kickback from the finance co so there may be a little more wiggle room in your favour.

No point having finance if you've got the cash though - it just costs you more in the long run. Even on 0% it's still a big debt over your head.

If you do insist on having finance, make sure you have gap insurance too. You'll be glad if you did and need it!
What about when buying used? Or is the principle the same.
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JC.
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#7
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(Original post by hsv)
What about when buying used? Or is the principle the same.
Nope, when you're buying used cash is king if it's a small independent.
It won't neccesarily have to go through the books!

I wouldn't buy from a car supermarket. The amount they have across cars is unreal. Although, you'll get a bit more come back if there's problems - so again swings and round abouts.

The best deals used are from private sales in terms of outlay.
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