I used LRFS to finance mine, I did get a quote from one of the companies on Piston Heads & LR matched it, although I think it was only circa 1.5% lower on the apr.

I sort of have a different approach, I finance mine as I get an allowance for no company car & a mileage allowance for business use so look that they should equate on a monthly basis but each to his own.

Its a superb car enjoy Paul
L405 now sold

I must be a numpty and too trusting. I always buy my cars for cash - but then that's why I don't buy new.

I only just realised that at the end of a PCP term, there is essentially no equity in the deal, and the GMFV is not what gets put towards a new car. You literally pay a huge deposit, pay a mortgage like amount each month and then come the end of the agreement (assuming there are no overage charges for mileage) you end up walking away with nothing to show for it.

I had wrongly assumed the GMFV would be the deposit on a new one, whereas in real life you are unlikely to walk away with any equity from the agreement.

I guess if you're ok with that, it's fine. I like to own a car, look after it, and be able to sell it when I like, and the value I sell it for DOES become the deposit on a newer one! Discovery 4 HSE
1998 110 TUM HS FFR Hard Top XD WOLF
1982 Series 3 Hard Top

*Gone:L462 D5 HSE LUX, L663 Defender 110 HSE, Discovery 3 HSE, 2014MY Range Rover Sport 5.0 Supercharged AB Dynamic; L405 Exec Vogue SE 4.4, 5.0 Supercharged Autobiography, Defender TDCi XS CSW, Defender TD5 HT, Vogue SE TDV8, Vogue TD6, RRSport SC 4.2V8, Classic 3.9 Vogue Auto, Land Rover Series 3 SWB

Actually I think that provided the APR is reasonable it makes much more sense to finance a depreciating asset as otherwise one is constantly consuming capital whereas financing it means that the depreciation is met out of income which makes much more sense.
Where is the logic in the argument for not financing a depreciating asset?

Last July When I purchased my VSE LR finance were offering 2years free servicing and 2 MOT's if I took £10k for minimum of 6months.
I did the sums and got 2 full services + 2MOT's with any required work for less than £500. (By settling in full after 6th payment.

martinf wrote:

Actually I think that provided the APR is reasonable it makes much more sense to finance a depreciating asset as otherwise one is constantly consuming capital whereas financing it means that the depreciation is met out of income which makes much more sense.
Where is the logic in the argument for not financing a depreciating asset?

However you buy the car it will depreciate at the same rate

So I paid £8k deposit plus a monthly payment which effectively covers the depreciation over 3 years on the car.

£40k - So if car is worth more than £44k the guaranteed value after 3 years I will have a deposit if worth any less I just give the car back.

I prefer to keep my cash to give business flexibility etc.

We do not have a business overdraft as we as directors prefer to provide the working capital personally, and as you will appreciate there are peaks & troughs and you have to be ready for all.

Fortunately we are currently in a peak - got money on deposit paying 1% interest & I am paying interest personally that I do not need to but that as far as I'm concerned a small price to pay to drive a great car & sleep at night knowing if a customer goes bust that we can get through it without having to be beholden to the bank manager or anyone else.

Lots of times in the past I'm pleased that I have not had the cash tied up in cars.

No way is right or wrong, different people different circumstances and as has been said before, if everyone bought everything with money they had rather than borrowed new & used car sales would stop overnight Paul
L405 now sold

Greg_D wrote:

martinf wrote:

Actually I think that provided the APR is reasonable it makes much more sense to finance a depreciating asset as otherwise one is constantly consuming capital whereas financing it means that the depreciation is met out of income which makes much more sense.
Where is the logic in the argument for not financing a depreciating asset?

The logic is that the depreciation is a constant regardless of how you pay for it. Financing doesn't make the depreciation go away, you just pay finance charges on top.

If you have a use for the money that will earn you a greater return than the cost of the finance, then great, but other than that finance is just another cost to add to the bill.

Also, if you don't need the money to pay for any investments over the term that you plan to run the car, then even that justification doesn't hold water.

Selling finance is a major profit centre for car dealers. 'Business managers' sell f&i and often earn more than the salesman. Go in with a good rate elsewhere and they will negotiate. There will be targets for x% of sales via lrfs, so rate matching will be the norm.