Cash or finance?

[Andjons]

My latest correspondence with the increasingly inaccurately named Lotus "Customer Care" now indicates a June '23 build / July '23 delivery (moved from Q2 '24) . After reading posts on here, though, I suspect this is likely to slip.
Anyway, I was wondering what sort of proportion of people are cash buyers, compared to finance. If you are on finance, have you gone for PCP or HP? If PCP, are you anticipating keeping the car with the balloon payment?

 

[vantager]

My latest correspondence with the increasingly inaccurately named Lotus "Customer Care" now indicates a June '23 build / July '23 delivery (moved from Q2 '24) . After reading posts on here, though, I suspect this is likely to slip.
Anyway, I was wondering what sort of proportion of people are cash buyers, compared to finance. If you are on finance, have you gone for PCP or HP? If PCP, are you anticipating keeping the car with the balloon payment?

These are depreciating toys in my view - they are about want not need - so I dont buy them unless I can pay cash. The last thing I need is to pay more (interest) - and I am not able to use interest as a tax deduction!

 

[vantager]

My latest correspondence with the increasingly inaccurately named Lotus "Customer Care" now indicates a June '23 build / July '23 delivery (moved from Q2 '24) . After reading posts on here, though, I suspect this is likely to slip.
Anyway, I was wondering what sort of proportion of people are cash buyers, compared to finance. If you are on finance, have you gone for PCP or HP? If PCP, are you anticipating keeping the car with the balloon payment?

Are you saying they will deliver the car (up to) a year early (June 23 not Q2 24)? What region, may I ask?

 

[Andjons]

Are you saying they will deliver the car (up to) a year early (June 23 not Q2 24)? What region, may I ask?

Surrey, UK. Deposit was November 2021. I think there are a number of people with a similar experience.

 

[LuckysDad]

Never finance a depreciating asset.
It's a double loss.

 

[vantager]

Are you saying they will deliver the car (up to) a year early (June 23 not Q2 24)? What region, may I ask?

Surrey, UK. Deposit was November 2021. I think there are a number of people with a similar experience.

I am in Kent. Put a deposit down Feb 2023 (this year) after a test drive but want the i4. Lotus Customer Care told me q2/q3 2024 build - which is OK. Sounds like you deserve yours - you have waited long enough.

 

[Lotustoronto]

I consider finance vs cash situation dependent on your situation. Now, generally you shouldn’t buy the Emira unless you could pay cash… however depending on rates, it may be beneficial to finance. If you have a greater use for your capital in some sort of investment (stocks, inventory for a business, cash flow etc.) that typically you can not get financing for, then I would consider it. Also if the finance is closed or open makes a difference. If I finance for a year and decide to payout and only paid 1 years worth of interest, but returned better elsewhere, then that is what I would do.

Typically, paying cash for a car is the best result, but there are many examples where a finance puts you ahead.

 

[Nova]

Never finance a depreciating asset.
It's a double loss.

Not really a hard and fast rule. Financing is okay if the interest rate is lower than whatever investment return you are getting.

 

[2BIG2FAIL]

I'm not going to finance - the extra delays giving the opportunity to stack up some more cash combined with rates in a much higher place than where they were during initial deposit make an outright purchase much more attractive in my opinion.

 

[Cutting42]

Cash buyer here, tend not to borrow as a rule and investments not doing better than any finance rate currently available. I

 

[Cachaco131]

Cash buyer here. I feel these are toys and my personal view is these should not eat into your credit capacity. I don't know many people that will do much better on their personal investments than current borrowing rates. And it's not like the quantum is large, say you get a spread of 200bps, on 50k. Not really worth it. If there were real tax benefits like in a mortgage, maybe I'd consider it.

And peace of mind.

 

[kitkat]

Not really a hard and fast rule. Financing is okay if the interest rate is lower than whatever investment return you are getting.

Yeah that’s the sensible approach, it should be viewed in the current medium term economic environment.

 

[motorpool]

Never finance a depreciating asset.
It's a double loss.

There are lots of reasons to finance .... use your capital for better results (I have two loans at 1.89% but my investments for the payoff are averaging 7-10), build credit, have slush avail for other unplanned events, etc. Now, lots of people can't properly manage money and use finance to get in over their head but financing can be a reasonable method to acquire a toy. Plus, if you keep for a long period of time, then the interest is minimized as it's spread out. I personally wouldn't finance at today's rate but I don't view finance as a bad thing.

 

[GlobalPilot777]

I can finance the car for 2.45% with a 20% downpayment, and if I put that saved money towards my stocks/etf’s… i’ll get a net return of now approx 15% annual (used to be 25% in the previous years, add to that the dividend payout and the compound interest). In times where there is 14% inflations.. you better not keep cash… finance it (wether its a car or house) for low interest rates beats by all means buying cash. Even if the value after 2/4years has dropped 50%

 

[2BIG2FAIL]

I can finance the car for 2.45% with a 20% downpayment, and if I put that saved money towards my stocks/etf’s… i’ll get a net return of now approx 15% annual (used to be 25% in the previous years, add to that the dividend payout and the compound interest). In times where there is 14% inflations.. you better not keep cash… finance it (wether its a car or house) for low interest rates beats by all means buying cash. Even if the value after 2/4years has dropped 50%

None of this adds up to me. Where are you getting a 2.45% loan? And if you could generate 15% return (which you say is low) consistently, you would be the most successful fund manager of all time. Maybe I'm missing something?

 

[Cachaco131]

None of this adds up to me. Where are you getting a 2.45% loan? And if you could generate 15% return (which you say is low) consistently, you would be the most successful fund manager of all time. Maybe I'm missing something?

Lol totally agree. We have the next Warren Buffet amongst us. I work for a 500bn+ asset manager. We'd love to hire @Globalpilot777 as we do not get those returns.

 

[GlobalPilot777]

None of this adds up to me. Where are you getting a 2.45% loan? And if you could generate 15% return (which you say is low) consistently, you would be the most successful fund manager of all time. Maybe I'm missing something?

2.45% carloan… Welcome to Dubai habibi

Maybe this year a tat bit less than 15%, but 12% on average for the past 5 years is not bad add to that compound interest plus dividend..

Its not difficult to be your own fund-manager, however if you don't understand how to do it and let your funds be managed by a fund-manager.. then expect to buy them a nice Armani suit and a Porche or in our case a Lotus Emira with your own money.. because they easily take 2-5% from your funds to manage it for you.

Oow and another thing.. all of this for capital gains with 0% tax because… Dubai.

 

[Cachaco131]

2.45% carloan… Welcome to Dubai habibi

Maybe this year a tat bit less than 15%, but 12% on average for the past 5 years is not bad add to that compound interest plus dividend..

Its not difficult to be your own fund-manager, however if you don't understand how to do it and let your funds be managed by a fund-manager.. then expect to buy them a nice Armani suit and a Porche or in our case a Lotus Emira with your own money.. because they easily take 2-5% from your funds to manage it for you.

Oow and another thing.. all of this for capital gains with 0% tax because… Dubai.

Ah nope. Institutional asset managers don't pay even 80bps to fund managers (private markets). In the public markets they pay pips.

Anyway, Buffet watch out.

 

[LotusB]

2.45% carloan… Welcome to Dubai habibi

Maybe this year a tat bit less than 15%, but 12% on average for the past 5 years is not bad add to that compound interest plus dividend..

Its not difficult to be your own fund-manager, however if you don't understand how to do it and let your funds be managed by a fund-manager.. then expect to buy them a nice Armani suit and a Porche or in our case a Lotus Emira with your own money.. because they easily take 2-5% from your funds to manage it for you.

Oow and another thing.. all of this for capital gains with 0% tax because… Dubai.

You're showing us history, not the future. You didn't account for the risk. However, I will say that if you can get a 2.45% loan and pay 0% tax on capital gains, that's pretty amazing. That unique situation doesn't apply to the rest of the world. I'd probably take advantage of it - but would still recommend that you be in a position to pay cash for the car, if needed.

When risk shows up, it's usually not pretty. No debt = no headaches

 

[hagen111]

You're showing us history, not the future. You didn't account for the risk. However, I will say that if you can get a 2.45% loan and pay 0% tax on capital gains, that's pretty amazing. That unique situation doesn't apply to the rest of the world. I'd probably take advantage of it - but would still recommend that you be in a position to pay cash for the car, if needed.

When risk shows up, it's usually not pretty. No debt = no headaches

Dubai…1000 usd per month on air conditioning. What the rest of world pays for car loans, you can spent in Dubai on air conditioning ;-)

I would finance at 2.45%. You can put your cash in short term EU government bonds with 1 year duration and receive like 3.5%.

I would finance or lease in case you buy with your business. Depreciate or lease the car on 2 year term 80.000kms/year. And after 2 years you opt to buy the car for residual value. And then move to private and pay VAT. Its not a bad option.

For me…no business, no loan at 2.45%…but sold my Exige V6 for top money last year, and left the money with the dealer as a further downpayment on the Emira. Remainder I pay from own account. Werther the money in the account depreciates through inflation by 15% a year or depreciates via the Emira, doesn’t really make a difference. Except the Emira will be a lot more fun!