Car Finance Options Mr Goodkat

#1
Hello



I am looking for some advice on financing a new car.



Looking at cars in the £20-25k bracket (nearly new not new to avoid VAT)



I have a car to trade in that is likely to part ex for a grand or two over the outstanding finance.



I see I have a few options:

- Pay cash for the car from savings and not have to pay interest on the money owed

- HP spread the cost over the term then own at the end of the agreement but monthly payments would increase

- Bank Loan decent facility with my bank and more flexible term

- PCP to keep monthly costs down with the option of balloon payment or change car at the end (annual mileage may be an issue)

- Combine some savings with one of the above



All of the above could be funded with my car allowance.



I am debt free other than mortgage, small 0% credit card debt that will be paid off before the rate expires in August and current outstanding car finance to be cleared in part ex deal



Views welcome....



Thanks for reading



Mr Goodkat

#2
Do you have enough savings to cover the "rainy day" and buy the car out right?



If you do, and dont have some inside knowledge on vast changes on 2nd hand car prices in the near-mid term, then why pay interest on a loan (call it HP, PCP or anything else) when you have money sitting their earning less interest that you could pay it off with?



Obv if you have no contingency fund or that money is there for a buy to let investment for your pension or such then its a more complex decision

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