Have I got this right? It seems to good to be true...
Option 1: You buy a New M3 for £40470 its cost is that, £40470.
Option 2: Wife and I each put £20k in a 4yr fixed rate ISA at 5.5%.
We buy a new M3, £1200 down on PCP, paying £499 per month for 48 months.
Come 2027 we cash out the ISA, which matures at £49552, yielding a tax free growth of £9552. We'll need another £5576 to make up the option to buy at £15128.
Total cost of taking the 0% route:
Downpayment = £1200
48x£499 monthly = £23952
Interest earned + £5576 to buy outright = £5576
Total cost = £30728
You'd have to be mad to buy a M3 with cash, right now right?
- Further thoughts.... Right, I'm imagining it's now 2027. I have spent just £30728, but inflation has eroded the value of the £40k I invested. Still, I have a 4yr old M3, and it's still worth, what? £20k. And a portion of its depreciation has been offset against income tax re its business use.
Somebody needs to talk me out of this before I bite the bullet.