How much????????

[guytaylor]

Have been looking at an expensive Z3m and am still undecided so today I called a BMW dealership re a z4m coupe, they had a red one in at £28.4k, 7k miles, 2006.

I asked for some quotes on a lease deal over 2 years and the total cost (non-maintained) was over £17k!!!!!!!!!!!!!!!!!!!!!!!

They basically wanted my car down (2001 330Ci Sport, 62k miles, black, probably circa £8k trade value), plus £2k deposit down, plus £299 a month. What a joke! GFV at end of 2 year term was £17.5k. Joke.

I will stick with the hunt for a S50 m coupe....................

[exdos]

Have been looking at an expensive Z3m and am still undecided so today I called a BMW dealership re a z4m coupe, they had a red one in at £28.4k, 7k miles, 2006.

I asked for some quotes on a lease deal over 2 years and the total cost (non-maintained) was over £17k!!!!!!!!!!!!!!!!!!!!!!!

They basically wanted my car down (2001 330Ci Sport, 62k miles, black, probably circa £8k trade value), plus £2k deposit down, plus £299 a month. What a joke! GFV at end of 2 year term was £17.5k. Joke.

I will stick with the hunt for a S50 m coupe....................

The cheapest way to buy anything is..............cash. It's no big secret. Why not keep your present car for another 2 years and save the £299 per month and all the other costs associated with the lease deal you've described, then you will have the £17k and you can then act as your own bank for future purchases?

[Chris]

One problem with that John... people (including myself) want things now, not next year not next week, but NOW! I personally couldn't wait to get the coupe so put half of it on finance.

I did however get a personal loan which got me a far better deal than the one guy mentions!

[exdos]

One problem with that John... people (including myself) want things now, not next year not next week, but NOW! I personally couldn't wait to get the coupe so put half of it on finance.

I did however get a personal loan which got me a far better deal than the one guy mentions!


I understand that people want things NOW and if you don't have the cash then you pay through the nose for the privilege. APRs of around 17% are being charged at present when the very best interest rates on savings are at around 6.7%. Likewise, if you have cash, then you are in a better position to pick up bargains, whereas if you always need finance you're invariably buying at full price plus interest. I've managed to get through life without ever borrowing a penny (except a house mortgage) and I've had just about everything I've ever really wanted, including racehorses. True, I've had to save and wait to have these things, but it's always been worth the wait and made the "having" more special because it's like a dream come true when the longed-for thing happens.

You should do some simple calculations of the cost of interest over, say, a ten year period and you'll soon see that your money will buy you about three times as much, if not more, if you pick up bargains with cash. Do the same calculations over, say, a forty year period (your adult life) and you'll frighten yourself with the amount of money you're wasting on paying interest for anything. Einstein once said: "The most powerful force in the universe is compound interest." so why not let it work to your advantage rather than your mega-disadvantage?

[Chris]

It's a nice way of looking at things, but in reality it just isn't the way my brain works. I see something tasty, i want it, i realise i can have it now if im willing to pay a little interest.. i buy it :) As long as you can comfortably afford repayments, and you are aware of the premium you are paying, i don't really see the problem.

Just out of interest (no pun intended) do you, or did you have a mortgage??? ;)

[guytaylor]

Don't mind paying a bit of interest, to date have never had a car on a loan or finance but to move up to a good z3m I will probably get a small loan rather than use my savings.

I think that at least if I get a loan I am in some way adding cash into an asset (as long as it isn't depreciating faster than capital repayments) rather than pxssing it up against a wall at the weekend......

Cheers

[exdos]

It's a nice way of looking at things, but in reality it just isn't the way my brain works. I see something tasty, i want it, i realise i can have it now if im willing to pay a little interest.. i buy it :) As long as you can comfortably afford repayments, and you are aware of the premium you are paying, i don't really see the problem.

You are fooling yourself BIG TIME when you say; "a little interest".

I've just knocked up a simple spreadsheet calculation for you. If you are paying, say, £1000 per year in interest payments then if instead you saved that same £1000 each year you can see what Einstein was saying. The value of that saved money increases exponentially as the years roll by. More makes more. What you save now, whilst you are young might provide a few luxuries in your old age rather than you having to work until you drop like most of your generation will have to do.

http://www.z3mcoupe.com/photopost/data//500/53Saving_1000_per_annum.jpg

Just out of interest (no pun intended) do you, or did you have a mortgage??? ;)

I did, and it was a superb investment.

[exdos]

Don't mind paying a bit of interest, to date have never had a car on a loan or finance but to move up to a good z3m I will probably get a small loan rather than use my savings.


That's illogical. It's cheaper to use your savings than to pay interest to borrow money equal to the value of money you already have.

[Chris]

John, im getting your point, but i think you are slightly missing mine...

I would never get so 'financed up' that i was spending all my spare money on repayments. I am always in the posistion where i save money as well as finance a car. I said comfotably afford the repayments, meaning i am willing to sacrifice a small amount of money i could save in order to have the car i desire at the time. I beleive owning something like a coupe is worth it, but each to their own.

[cragg711220]

Just to add my 2 cents.

Chris echos my thoughts completly and the fact that it was an car as special as an MC was the only reason I took a loan to finance the car. (5.4% over 2.5 years)

I just wanted an awesome car while I'm still young and before the financial drag of marrage (one day) and kids (god forbid!) take effect and I will be confined to a diesel fiesta.

[exdos]

Chris,

I do understand your point absolutely. You want things NOW!

All I'm attempting to do is to suggest an alternative way that you can live like that once you've built up a "bank" of your own and then you'll also be able to have more because you're not wasting money on interest.

Each to his own.

[fastdrive]

more ot.
but who give the 6.7 percent of investement?

[exdos]

more ot.
but who give the 6.7 percent of investement?

The Bank of Scotland/Halifax are presently offering 6.87% Gross on a Halifax Websaver Fixed Rate Fixed Term Account with a minimum investment of £500 with 3 Months notice.

Those of you who like to invest in Equities for your ISAs: are you aware of the "pound cost averaging" method of investing which ensures that you minimise the negative effects of market fluctuations?

[Broccers]

My isas performed so badly I gave up on em but I am all ears if they can make decent returns for those that know how.

[Chris]

Dont ISA's have a 3k limit, making that chart Exdos posted a bit ambitious?

Either way, everyone has their own ideas of what's important to them. If you can afford it, do it in my opinion :)

[Broccers]

Dont ISA's have a 3k limit, making that chart Exdos posted a bit ambitious?

3k Invested tax free per year however I'm sure the lump sum would be liable for tax or is that only when you take it out ?

[Chris]

Im not sure, and apologies to Exdos, i didn't realise they were 3K per year, I thought they were 3K in total.

Anyway, pointless worrying now, i have my Coupe and im not selling it...yet!

[Shunt]

Just to get back on topic fellas £28.4k is a cheap Z4MC, I'd presume it's lacking a NAV system. I'd agree with Exdos though, the best way of buying is using cash, next best is a cheap loan. On no account would I go down the balloon route, Sytners tried everthing to persuade me to keep the money in the bank and take thier balloon option. I wonder why they were so keen?

Anyway, as you're not married and don't know better, get it NOW.

I remember my Alpine GTA Turbo @ 21, had to take my Mum along to verify my finance :auto:

[exdos]

My isas performed so badly I gave up on em but I am all ears if they can make decent returns for those that know how.

Simon,

Mine did the same. The whole of the British public have been shafted by the Financial Services industry and aided and abetted by the government's ISA tax-free bait.

Like most, I used to leave my annual ISA investment until the last few days before the end of the tax year and invest in one lump. BIG MISTAKE! You end up competing with everyone else doing the same at the same time at the end of each March if you are investing in Equities, so you always end up buying at a high price in a fluctuating market. Bad Move.

If you intend to use your full ISA allowance and either, do a full £7k per annum Equities ISA, or do a £6k 50:50 split between equities and cash for your ISA, then it is far better to split your total investment into 12 equal monthly investments, so that you buy your equities at monthly intervals, so that you buy into "monthly snapshots" of the markets. This is "pound cost averaging". What it means is this: since the stock markets are always going up and down, sometimes by pretty large amounts, if the stock market is at a short-term high one month, your monthly money buys less shares, but if the stock market is at a short-term low one month the same monthly payment buys you more shares. At the end of the 12 months you have bought your equities at an "average" value of the stock market rather than risk lumping your full ISA allowance on at an annual high. This way you tend to see consistent gains that the Equities markets have shown for most of their history except in the period from 2000 to 2002.

It's certainly not rocket-science and is as simple as compound interest to understand, but very worthwhile knowledge for thus of us who prefer our money to work for us once we've done the hard work in earning it in the first place.

I hope you find this enlightening. :thumbsup: :cheers2:

[exdos]

Im not sure, and apologies to Exdos, i didn't realise they were 3K per year, I thought they were 3K in total.


Chris,

No worries. As always, I'm only trying to impart words of wisdom. I'm afraid that all my knowledge will evaporate when I'm dead you see. :lol: :lol:

[guytaylor]

I can use a spreadsheet too Exdos......

Say £5k borrowed over three years at 6.7% (cheapest on moneysupermarket), total credit charge £517 over three years if repaid monthly.

£5000 in my 6% account (lets forget tax eh to keep it simple?), goes up to £5955 after three years if interest paid yearly, plus I have had less money available to pxss up said wall as I am paying off the car.........

Views??

[exdos]

3k Invested tax free per year however I'm sure the lump sum would be liable for tax or is that only when you take it out ?

You have to specifically "earmark" the money (£7k, £6k or £3) of your original ISA investment as a Maxi or Mini ISA, and that original capital and all the interest/profit it earns is tax free provided that the capital remains within an ISA "vehicle". If you want to transfer the original investment (including interest/profit) to another ISA vehicle, then you have to have it transferred to the new provider using specific transfer forms so the Inland Revenue can see the audit trail, showing unbroken ISA investment. Your ISAs are the last investments that you should EVER cash in because ALL the interest you gain each year is compounded thus giving you the full benefits of the miracle of compound interest. If you can afford it, you should at least do the £6k split ISA, every year from the moment you start earning because, as my table shows in my earlier posting, in forty years time, another £1,000 invested in the year 2048 will yield about £15,000 in interest in 2048 and £6k invested each year would yield £90k in that year alone. :hurray: :hurray: No wonder Einstein was as impressed with this as he was in "black holes".

[coupe fan]

Yes, guytaylor, if you use your braincells, borrowing money is not such a bad option.
I have looked up my 2003 loan documents for my MC.

£15,000 borrowed at 6.9% APR - total charge for credit £1,331.25p.
1 X £544.23p
29 X £544.38p

And never ignore the fact that over that 30 month repayment period, the actual value/buying power of the of the cash required for each repayment is diminishing month by month due to inflation. Then couple that with the 'fact' that, all things being equal, my earnings gradually go up over that period making it more affordable to make each repayment.

In fact come to think of it, I would advise anyone with £15,000 cash to borrow this amount at a low rate, and stick it on 3 months notice at a bank/building society. This allows you to gradually drawdown amounts to repay the loan whilst having the flexibility of having a disposable lump sum to use for other purposes/investments/emergencies if they should arise.

I seem to recall seeing an advert on telly last night for a bank or building society which is offering 12% in the first year for savers; didn't see the rest of the terms.

[guytaylor]

Yes, not saying we should all take out loans we can't afford but they make some sense as part of a "personal financing package".

Borowing money is not always a bad idea.

[top pup]

The Bank of Scotland/Halifax are presently offering 6.87% Gross on a Halifax Websaver Fixed Rate Fixed Term Account with a minimum investment of £500 with 3 Months notice.

Those of you who like to invest in Equities for your ISAs: are you aware of the "pound cost averaging" method of investing which ensures that you minimise the negative effects of market fluctuations?

I'm looking for a good savings account so I had a look, and if I found the right account it runs for a three month term, so what happens after three months? Can you take the money out and then open up a new Fixed Term Account at whatever the current rate is?

[Broccers]

Yes that's right pup - you get the money transferred back after the term to the totally rubbish rate initial account needed to access the higher rate account - I know cos I have one ;-)

Each to their own.

You could get knocked over by a bus tomorrow or another vehicle (government scheme) you are using to save your money gets scrapped and you lose ? C la vie.

[pdwarren]

Sytners tried everthing to persuade me to keep the money in the bank and take thier balloon option. I wonder why they were so keen?

Quite! I had the same thing from Sytners. They were selling it so hard that I didn't even need to look at the figures to know that I didn't want it.

Paul

[exdos]

You could get knocked over by a bus tomorrow or another vehicle (government scheme)

My Dad got knocked down and was trapped under a bus in 1957 and he recovered and lived until 2005. I never thought I'd live to my present age, but I have. Living for today has great attractions, but for most of your days (all except your last), there is a tomorrow.

There's absolutely no right or wrong on this subject. It's what sits comfortably with your own take on life.

[wadh0070]

I can use a spreadsheet too Exdos......

£5000 in my 6% account (lets forget tax eh to keep it simple?), goes up to £5955 after three years if interest paid yearly, plus I have had less money available to pxss up said wall as I am paying off the car.........

Views??

If only we could forget tax eh! But we can't and that's why borrowing money and having savings is (almost) never a good idea.

The exceptions:

1) If your savings are going into an ISA and you can afford to leave them there (and thus get the tax benefit)

2) Because you should always (if you can afford it) have something put aside to cover the unexpected costs in life. Homeowners out there might feel my pain of a leaking roof - you don't want to be forced into borrowing to cover the "normal" unexpected payments.

In my view, if you own your own home you are best paying down your mortgage, if you have an arrangement that then allows you to re-borrow this money when you want to buy something worthwhile (an MC, for instance).

By the way, is this the most boring thread ever?