Top tips on all your money queries
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What is the main topic discussed in this episode?
And we have a caller. Colm in Ballin and Slow in Galway is on the line. Good morning, Colm. What's your question?
What questions do listeners have about buying a new electric car?
Good morning, David. My question for Eoin is about buying a new car, buying a new electric car. And is it a good idea to go for a zero finance option?
Okay.
Buying a new electric car.
Okay, Conor.
One of the pitfalls.
One of the problems you have on asking me about buying a new car, I am not on the new car company's Christmas card list. Neither am I on the credit card company's Christmas card list. They don't like, I'm not a fan of a new car. And I know there's an argument about electric cars and all of this, right? What I would say is, let's just concentrate on the 0% thing. And I want you to just think about it. There's two ways. If I was the manufacturer of a car, the way I would sell the idea of how I, or I'd explain the idea of how I could provide 0% is, I would say, look, we make loads of money selling cars and we have all this money sitting in a bank account and we're making no interest in that.
Is 0% finance a good option for purchasing a car?
So we might as well give it to our customers at 0% so they could buy our cars off us. And that kind of makes sense. And if that was the wheel I was spinning, that's exactly what I'd be saying if I was spinning that. That yarn, not yarn, that's just a lie. That's probably true, possibly true. But that's the way they kind of portray it. I kind of feel that might be right, but I think there's a possibility that what's going on here, let's imagine the brand new car is actually €38,000. And then they say, you know what, about 85% of people actually borrow to buy their new car. So 85% of our customers, if we just up the price to €40,000, now this is a thesis, this is an idea of mine, right, before I get in trouble.
But imagine that this was to be true. They upped the price of it to 40,000 euros. It only affects 15% of their customers who are buying with cash. They're not getting any finance. And then they can tell everyone else that it's a 0% finance deal. That's a theory. And I'm happy to be questioned on it. But the way it would kind of make sense to me because... Nobody wants to give out money for free, even if it's their own money to buy their own products. So I just think the price of it is baked into it, into the price, the sticker price of the car in the first place. And I hope that makes sense, Colm. Ultimately, what I would say is, is there's a couple of questions in your question. Should you trust, should you take the 0% finance?
And the second one is, should you be buying an electric car? And is that the right thing to be doing? And I'm sure there's better people like Geraldine could come in here and talk to us about the pros and cons and the mechanics of it and everything else. But what I would say on it is, is that my preference, and this is my own personal preference, is two-year-old cars are great cars to buy.
Yeah, doesn't the car lose 20% of its value as soon as you drive it off the forecourt?
Yeah, and depends on the model. And I've actually said this on air here before and I got a phone call afterwards and a really nice guy rang me from one of the car dealers and said, own your figures, we're all off. So I'm going to give him broad spectrum. You can lose anywhere between 20% and 60%. And it was 60%, he had a problem, but I hope he's listening. But 20% and 60% in the first two years on the value of the car. And to me... I'd much prefer to buy a second-hand car. The technology is up to date. And that's not even a sweet point, by the way. That's just my sweet point personally. I'm not giving financial advice. I'm giving personal advice here. That's the sweet point for me because the technology is up to date.
You've a reasonably new model. The mileage should be low. And I really like cars. That's my guilty pleasure.
Okay. Do you like the smell of a new car? Yeah, but you can buy that.
You can buy that in a motor factors. Any decent motor factors will sell you that smell for a good price.
Okay. I must invest in some of that for my 16-year-old car. But anyway, Colm, is that your question answered?
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–0:07
2
What questions do listeners have about buying a new electric car?
0:07–1:00
3
Is 0% finance a good option for purchasing a car?
1:00–8:09
4
How does the value of a new car depreciate over time?
8:09–9:51
5
What should you consider when buying a second-hand car?
9:51–14:43
6
How can you effectively manage a fixed-rate mortgage?
14:43–19:43