In this video I tell you how I bought a Porsche at 21 years old and compare the various financing options for the car and whether a new or used car is better.
Bank loan.
A bank loan is often financed at a low interest rate of 3-5% and is very easy to arrange. It also comes with the benefit of not being tied to the car (unsecured) and therefore when you sell the car you don't have to repay the loan. However, in the UK these tend to max out at £25,000 which can therefore be difficult to finance very high end vehicles.
HP financing.
HP financing is often at a higher interest rate (say 5-8%). With HP finance you will also be paying off a larger chunk of interest each month compared to PCP and therefore it is cheaper overall. However, this is a form of secured financing and therefore when the car is sold the loan is repaid at the same time.
PCP financing.
PCP financing is often at a slightly lower rate to HP financing and also benefits from a lower monthly payment than HP. However, this lower monthly payment is caused by a large amount of capital and interest being saved until the end as a 'balloon payment'. There is also a mileage allowance which is very expensive to exceed.
Lease/Personal Contract Hire.
This form of financing benefits from the lowest monthly payment (other than my secret tip mentioned at the end) and also has no balloon payment. However, there is less customisation available as it is usually only available on a base model car and any additions increase the cost significantly. There is also a mileage allowance which is very expensive to exceed.
New vs used.
Depreciation follows an exponential decay method which means that there is a lot of depreciation at the start (ie first 3 years) but not as much after that. As such, you will always lose less money on a car that is 3 years old+ compared to a brand new car.
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The information in these videos shall not be construed as tax, legal, insurance, construction, engineering, health and safety, electrical or financial advice. IF stocks or companies are mentioned, Thomas MAY have an ownership interest in them -- DO NOT make buying or selling decisions based on Thomas' videos. If you need such advice, please contact a qualified accountant, solicitor, insurance agent, contractor/electrician/engineer/etc. or financial advisor.
This is not an advertisement of property for sale and shall not be construed as anything other than an opinion for entertainment purposes only.
#CarFinance #NewVsUsed #Porsche
Bank loan.
A bank loan is often financed at a low interest rate of 3-5% and is very easy to arrange. It also comes with the benefit of not being tied to the car (unsecured) and therefore when you sell the car you don't have to repay the loan. However, in the UK these tend to max out at £25,000 which can therefore be difficult to finance very high end vehicles.
HP financing.
HP financing is often at a higher interest rate (say 5-8%). With HP finance you will also be paying off a larger chunk of interest each month compared to PCP and therefore it is cheaper overall. However, this is a form of secured financing and therefore when the car is sold the loan is repaid at the same time.
PCP financing.
PCP financing is often at a slightly lower rate to HP financing and also benefits from a lower monthly payment than HP. However, this lower monthly payment is caused by a large amount of capital and interest being saved until the end as a 'balloon payment'. There is also a mileage allowance which is very expensive to exceed.
Lease/Personal Contract Hire.
This form of financing benefits from the lowest monthly payment (other than my secret tip mentioned at the end) and also has no balloon payment. However, there is less customisation available as it is usually only available on a base model car and any additions increase the cost significantly. There is also a mileage allowance which is very expensive to exceed.
New vs used.
Depreciation follows an exponential decay method which means that there is a lot of depreciation at the start (ie first 3 years) but not as much after that. As such, you will always lose less money on a car that is 3 years old+ compared to a brand new car.
Social media
Instagram - ThomasJamesYT - https://instagram.com/thomasjamesyt
TikTok - ThomasJamesYT - https://tiktok.com/ @thomasjamesyt
Subscribe for more property related content - https://youtube.com/channel/UCRTndpz_fpcVcoVe0QF1IgA
The information in these videos shall not be construed as tax, legal, insurance, construction, engineering, health and safety, electrical or financial advice. IF stocks or companies are mentioned, Thomas MAY have an ownership interest in them -- DO NOT make buying or selling decisions based on Thomas' videos. If you need such advice, please contact a qualified accountant, solicitor, insurance agent, contractor/electrician/engineer/etc. or financial advisor.
This is not an advertisement of property for sale and shall not be construed as anything other than an opinion for entertainment purposes only.
#CarFinance #NewVsUsed #Porsche
Hi Thomas, Firstly your an absolute inspiration! I'm 19 years old at university studying Computer Science. I know i will not use my degree as my career straight away however it gives me something to fall onto. Can you make a video explaining buying a 3 bedroom property as a investment? Can you include all the due diligence.
Hi Mate,
Another great video. I would just suggest getting a phone stand or something just to stabilize your recording device, makes the videos easier to watch if the footage is stable. 🙂
Let me know if you have any further questions on car finance or cars in general