TRL Helpdesk - Car Finance

[Mister C]

I've never had a new car and now I'd quite like one. I've been a heavy saver all my life and have a number of investments which are doing ok at the moment.

So after a bit of research I'd like the new Land Rover Discovery Sport. When I say new I'd buy a nearly new to save on the immediate depreciation so I reckon I'm looking at £32k for the one I want.

Does anyone have any recommendations on the most efficient way of paying for this?

I'm currently leaning towards taking a bank loan which are as low as 2.9% atm. I have a good credit score so it shouldn't be a problem getting this rate.

I'm not so keen on PCPs as I won't own the car at the end after paying a significant amount and that doesn't feel right to me.

I could cash in some investments but it seems that 2.9% is a very good rate to be borrowing at.

Anyone have any advice? Is there anything I'm missing?

Thanks in advance

p.s I know there are many other possibly better ways I could spend my money but I'm not asking for advice on that  

 

[ckn]

I saw this quite interesting article on this subject in the Telegraph at the weekend.  It all depends on your attitude to debt really but you do seem to pay a premium for buying outright.

Leasing and PCP really are skewed towards the premium market as the "balloon payment" is often tied to residual value.  A Ford with a 33% residual after 3 years will cost way more than an equivalent Audi with a 50% residual.  (Those residuals are completely made up as I've no idea what residuals are these days)

[jacksy]

Im about to get another car and im going to get it with a loan.

[Mister C]

Cheers both. I'm becoming more convinced that a nearly new approved used car with a loan is most economical. Plus keeping it for 5 years!

[jacksy]

Im going for 5years too.

[gazza77]

Probably depends in part how long you want to keep it, and what you'll do for your next car. 

PCP, you're looking at a large lump sum or no car come the end of the term. If you're going to do the same again, that's probably fine. Buy outright, and once the loan is paid, you still have the car and no further cash is required if you don't want to change at that point.