I am in the very fortunate position of potentially spending £30k on a new (to me) car. I have money set aside which we have saved, again luckily my wife and I can save at a crazy rate. Its a lot of money but not an amount we would never be able to get to again.

This is for a 2020 car with good spec, I think I will be getting a good deal. I expect to do a lot of miles but keep it 5+ years.

Do you think it is wise to buy outright? The reason for us is to stay away from monthly repayments and giving 7%+ to the bank for no reason. Keeps our household balance sheet simple and lean.

Some of you must spend decent wedge on family cars etc. Any advice or thoughts?

I've bought all my cars outright. Hardly mega money though:
2004 = £5,500 on a brand new Ford Ka (DU54DVX where are you now...).
2012 = £480 on a Ford Sierra (guess what happened to that!)
2015(?) = £1020 on a Ford Puma (eBay)

The only big (for me) spend was 2013 when we bought a brand new family car - Kia Ceed estate. We took the finance deal, as it was the only way the dealership would allow us to get the price down to where we wanted it (they would take cash, but only if they removed the £1k discount they were offering for signing up for credit with them). We let one month of the credit arrangement pass, then rang up and paid off the balance in full without any penalty.

I think it's all down to personal preference and what else you'll do with that cash. Some people think they can put their cash somewhere else and make more money than they're paying out in interest/etc for the things they have on finance. As you can guess, I'm not like that!

Tesco's doing loans at 4.9% and with inflation running around that, you won't be paying any interest (essentially).

If you use finance and have issues with the car, the finance company could become responsible for the vehicle and will deal with the seller. Definitely put some on a credit card for the same reason.

A lot of garages don’t want cash they have to look after it and take it to a bank last two I have bought they asked me not to pay in cash

Thanks for responses so far. To build on some comments:

Using a finance to get a better deal is not an option, I did ask that as I know it's an incentive for the salesmen and therefore are happier to do a deal.

I like the idea of sharing risk with a credit card company or finance company. Personally I wouldn't trust a finance company to step in, I Tesco, for example, would not give two hoots if the car was sold with issues. I don't actually have a credit card (I know that's strange but I just don't) and even if I did it would be only about 25% of the risk.

Finally, when I say cash it's obviously not paper stuff. They won't accept suitcases for money laundering reasons. It will be a bank transfer.

Any other thoughts or advice?

If they were doing interest free finance then it would be a different situation. Load me up to the max and I would just stick the money elsewhere earning interest. Not the case though.

I've also only ever paid 'cash' (bank transfer or card these days thanks to money laundering rules)

My last one was just in a few months back - with the way s/h prices are just now I looked at the loan/finance options and nothing I saw was good enough to stop me playing cash

I guess if I could have found savings/investments offering guaranteed returns significantly higher than loan/finance I might have made a different choice - but as it was the finance deals were north of 11% and the best savings account was 2.5% at the time


In terms of the risk, I've always either tried to buy from really good local garages with first class reputations (still a couple left up here)

or if not at least trust my own abilitiy to inspect the car - I walked away from 3 others the same day I picked the last one
(Not sure how good the AA/RAC type inspection is these days but it did save a couple of my mates who know nothing about cars from some real lemons)

I bought my current car new for £18k. Paid £1k on credit card and rest bank transfer.

The only concern if that is the correct term is if paying it in full then that is the money gone converted to a car which you can't retrieve easily if times change, say you lost your job etc. or for any of life knocks. Where as if you put the money in the bank or somewhere it would not lose interest and paid a finance deal automatically from that then you could access it any time if the need arises.

I'm assuming this is a Telsa?

Whilst it's nice to have the money as cash, I'd be very surprised if many (if any) car dealers would be intersted in taking sums like that in cash.

They'd want it paid straight in to a bank and verified as genuine for starters.

SWMBO and I recently purchased a 2nd hand car. Fortunate enough to be able to to purchase outright (we have the same distaste for finance). It was done by paying with a debit card at the car dealer. Don't mind admitting it's the largest amount I've spent as a single transaction on a debit card. I even spoke to my bank first to verify it was OK to make a transaction of that amount - yes it was/is.

If I we you, I'd have th money in the bank and pay by debit card or possibly bank transfer. Doing it that way you at least get some traceability on the payment. Value, date, time, payer, receiver etc. You'll get a payment receipt from the dealer too.

I tried to buy a car from a dealer with cash a few years ago and was told they could only accept the money from a recognised UK bank account. It was to do with money laundering IIRC So I would think it unlikely any dealer you would want to buy a car from would take cash.

I always buy cars outright, I'd never buy a car I couldn't do that with.

I'd never buy a car that new due to the depreciation, but that's your choice entirely!

By cash, I assume he means bank transfer, not turning up with 30K in notes

[Edited on 26/5/2023 by coyoteboy]

quote:

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Originally posted by Mr Whippy
The only concern if that is the correct term is if paying it in full then that is the money gone converted to a car which you can't retrieve easily if times change, say you lost your job etc. or for any of life knocks. Where as if you put the money in the bank or somewhere it would not lose interest and paid a finance deal automatically from that then you could access it any time if the need arises.

I'm assuming this is a Telsa?

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quote:

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Originally posted by coyoteboy
I always buy cars outright, I'd never buy a car I couldn't do that with.

I'd never buy a car that new due to the depreciation, but that's your choice entirely!

By cash, I assume he means bank transfer, not turning up with 30K in notes

[Edited on 26/5/2023 by coyoteboy]

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Last car I sold which was quite a-bit more than that. one person turned up in brand new Hi vis uniform and claimed to be a scaffolder offered cash. When I said no problem I’ll meet you at the bank we can pay it in together he soon made his excuses.

Second person turned up with a carry bag full of cash with a genuine story so I said the same to him, we agreed a deal and went to the bank to pay it in.

This is when I found out what a pita cash is. Even the bank wouldn’t help me with it there was no one there to count or authenticate the money.

I had to use one of the paying in machines which only accepts £2k at a time! A whole hour later the lot was paid in. I used to think cash was king but I won’t ever deal with large amounts of cash like that again

I bought a car last year...opened a Credit Card account offering British Airways companion voucher when you spend £xx...used that card to buy the car, paid off the card straight away, now I have a free flight I can redeem.

You may not want the flight offer specifically, but I suggest looking at Credit Card purchase offers and doing it this way. (even cashback offers, you're getting something back at least)

quote:

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Originally posted by christim
I bought a car last year...opened a Credit Card account offering British Airways companion voucher when you spend £xx...used that card to buy the car, paid off the card straight away, now I have a free flight I can redeem.

You may not want the flight offer specifically, but I suggest looking at Credit Card purchase offers and doing it this way. (even cashback offers, you're getting something back at least)

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1. I would only pay cash if I could take immediate ownership and drive out the same minute. Otherwise you could be an unsecured creditor if the seller went "bust" between taking your cash and delivering the vehicle - when MFI went into admin I know some people got their kitchen price refunded because they had bought on credit card while a young just married couple had paid cash and lost the lot....

2. I believe a credit card, covers the full purchase price up to £30K, even if you only paid the deposit (say 5%) on the card and cash for the rest. If there are any problems with the car you will be able to get the full cost back from the card company....

quote:

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Originally posted by bi22le
I am in the very fortunate position of potentially spending £30k on a new (to me) car. I have money set aside which we have saved, again luckily my wife and I can save at a crazy rate. Its a lot of money but not an amount we would never be able to get to again.

This is for a 2020 car with good spec, I think I will be getting a good deal. I expect to do a lot of miles but keep it 5+ years.

Do you think it is wise to buy outright? The reason for us is to stay away from monthly repayments and giving 7%+ to the bank for no reason. Keeps our household balance sheet simple and lean.

Some of you must spend decent wedge on family cars etc. Any advice or thoughts?

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1. Get a credit card.

(Seriously, look at getting an interest free one; I just paid off a ~£10k credit card which was interest free for 18 months as I was coming to the end of the interest free period. I've had a few of these over the years when I've known I would have a big expense to pay and I'd rather not wipe out a bit chunk or all of my liquid savings. You can keep that cash somewhere sensible, ready to repay but no need to do so instantly whilst you're borrowing at no cost. Just don't get carried away and spend the money you need for the repayment)

2. Use it for deposit to get the protection mentioned.

3. Pay balance only on collection (as much as possible on the interest free card, balance 'cash'

4. Pay off credit card when appropriate to avoid paying interest.


Unless you have religious reasons for avoiding credit cards I would suggest that it's good practice to put your usual monthly expenditure on a credit card rather than only using debit cards and then pay off in full automatically from your current account by direct debit. This gives you the additional legal protection on all usual expenses and means that if your card is stolen/cloned whatever then the tea leaves are spending the banks money, not yours and generally, again, you have better protection.

When I bought my daily (M240i vert) I could have bought it outright. I opted to pay half cash and half bank loan. Mostly so I didn't spank too much of my savings. Loan will be paid of this year. Because of the stupid prices of used cars it's worth not far off what I paid for it! For the first time in my life I'm now considering buying new, mostly because work has introduced a salary sacrifice scheme.

I always buy without a loan. Was lucky that I was able to buy my first car cash. I then put money aside as if I'd got a loan. Used the savings to buy the next car. Done it ever since. When I was out of work I stopped putting the money aside to reduce my outgoings but still had the car to use. If I had a loan I'd have to pay it or lose the car.

It is scary when you make the payment and see that money going out of the account. I also always pay the deposit on the credit card to give the insurance. In reality you need to spend more than 100ish for the credit card protection to kick in. Dealers don't like the credit card as they don't get 100% of the money as the credit card claws a few percent back.