funding a used aston- how do fund yours?

funding a used aston- how do fund yours?

Author
Discussion

Cpb1702

Original Poster:

418 posts

114 months

Saturday 4th July 2015
quotequote all
Finance or outright purchase?

id like to buy used but will need finance

any good advice / guidance appreciated

SlartiF430

1,828 posts

153 months

Saturday 4th July 2015
quotequote all
Always buy cash outright. Unless you can't afford to. Finance ends up costing loads more and makes it harder to upgrade your car if your payments aren't covering loan+depreciation.

I'd consider finance to buy a much better car. For me that's a 458 or Vanq convertible but I'm not doing it for the above reasons.

Russwhitehouse

962 posts

130 months

Saturday 4th July 2015
quotequote all
Cash!

divetheworld

2,565 posts

134 months

Saturday 4th July 2015
quotequote all
If it deprecates, don't take out a loan to do it.
..........Unless it's in a country with a name ending in 'ski or 'stan. Then it's best to use someone else's money. smile

Probably not that helpful. Short answer, cash.

marknash99

661 posts

106 months

Saturday 4th July 2015
quotequote all
If you have the cash spare in the bank to use then definitely use that instead of taking out a loan. But it sounds as though you need finance. So do it. If you can afford the repayments why not? Interest rates are low, depreciation in Astons is low relatively speaking (talking about the 5yr old plus ones) Life is short, live for now but sensibly and pull the trigger.

I'm not ashamed to admit, I haven't bought my Aston out right, I put a chunk of cash down and financed the rest. Yeah ok I could have saved for the next couple of years or so and looked to buy out right, but I could die next month, I could lose my job or get ill, then I would have never have owned as Aston. I can easily afford the repayments and the little bit of interest I'm paying is money well spent to be driving around in my V8V Roadster - especially the way the weather is right now!


Cpb1702

Original Poster:

418 posts

114 months

Saturday 4th July 2015
quotequote all
marknash99 said:
If you have the cash spare in the bank to use then definitely use that instead of taking out a loan. But it sounds as though you need finance. So do it. If you can afford the repayments why not? Interest rates are low, depreciation in Astons is low relatively speaking (talking about the 5yr old plus ones) Life is short, live for now but sensibly and pull the trigger.

I'm not ashamed to admit, I haven't bought my Aston out right, I put a chunk of cash down and financed the rest. Yeah ok I could have saved for the next couple of years or so and looked to buy out right, but I could die next month, I could lose my job or get ill, then I would have never have owned as Aston. I can easily afford the repayments and the little bit of interest I'm paying is money well spent to be driving around in my V8V Roadster - especially the way the weather is right now!

What % did you put down? Did aston provide the remaining finance? Presume yours is five years old so minimum depreciation?

timbals

64 posts

107 months

Saturday 4th July 2015
quotequote all
Cpb1702 said:
Finance or outright purchase?

id like to buy used but will need finance

any good advice / guidance appreciated
You should do what is best for you financially. There are lots of options from PCP to HP to personal loan. Create a spreadsheet and calculate what the car will cost you over how long you want to keep the car (probably 2-3 years?), remember to put in depreciation plus the gap between retail and trade plus a bit more (it will be older and with more miles plus wear and tear). Also remember cars with > 40k miles seem to drop off in price too.

I think even the cheapest 35k dealer aston is only going to get you ~26k when selling it back to the dealer (I don't know for sure, just what people have written on the forums)

So the cheapest way to do this is with cash. However, this is only if your cash is sitting in a pile at home. If you have it invested well then it might be cheaper to finance the car.

The second cheapest way is a personal loan with a bank. This presumes you have a credit rating good enough to get the 3.6% being offered at the moment, it is an unsecured loan so it is difficult to set up and depends on what the bank thinks of you. The bank might offer you an interest rate of 20% on the loan so make sure you check what rate you are actually getting.

The next cheapest way is a Hire Purchase loan, this is secured against the car but you're looking at interest rates > 6.5%. It is very easy to set up and you would be guaranteed that rate. This pays off the car completely over the term so the repayments will be large unless you have a big deposit or the car is cheap.

The most expensive way on a used car is PCP. The interest rates are less competitive. At the end of the term there is a balloon payment before you own the car. It is the most expensive way to do this, but the most affordable in terms of monthly and initial outlay. PCP isn't usually available on cars older than 5 years.

Remember, the more you borrow the more it will cost.




Jon39

12,779 posts

142 months

Saturday 4th July 2015
quotequote all

Full payment, or debt?
I am sure that you know really, but perhaps some points are worth repeating.

Debt is great fun to begin with, for example Greece.

The recently popular borrowing system involving a 'balloon' payment is a wonderful trick. It certainly does sell more cars, because the 'balloon' payment is intended to be unaffordable. So, hand the car back, or buy another car with PCP once again, which is what usually happens. All very ingenious, because every three years many customers buy another car, another debt plan, and just as their warranty expires, they can begin another warranty period for 'their' car (which they do not actually own).

The lender gets your money (profit), and the salesman gets your money (commission).

Once they are three years old, Astons have been holding value fairly well, but it is probable as with most makes, that the forthcoming replacement models will reduce the values of present cars. Do the late DB7 cars have lower values than the early Vantages?

Each year that you wait, your dream car will become cheaper.




Edited by Jon39 on Saturday 4th July 23:14

Gdc

220 posts

141 months

Saturday 4th July 2015
quotequote all




timbals said:
You should do what is best for you financially. There are lots of options from PCP to HP to personal loan. Create a spreadsheet and calculate what the car will cost you over how long you want to keep the car (probably 2-3 years?), remember to put in depreciation plus the gap between retail and trade plus a bit more (it will be older and with more miles plus wear and tear). Also remember cars with > 40k miles seem to drop off in price too.

I think even the cheapest 35k dealer aston is only going to get you ~26k when selling it back to the dealer (I don't know for sure, just what people have written on the forums)

So the cheapest way to do this is with cash. However, this is only if your cash is sitting in a pile at home. If you have it invested well then it might be cheaper to finance the car.

The second cheapest way is a personal loan with a bank. This presumes you have a credit rating good enough to get the 3.6% being offered at the moment, it is an unsecured loan so it is difficult to set up and depends on what the bank thinks of you. The bank might offer you an interest rate of 20% on the loan so make sure you check what rate you are actually getting.

The next cheapest way is a Hire Purchase loan, this is secured against the car but you're looking at interest rates > 6.5%. It is very easy to set up and you would be guaranteed that rate. This pays off the car completely over the term so the repayments will be large unless you have a big deposit or the car is cheap.

The most expensive way on a used car is PCP. The interest rates are less competitive. At the end of the term there is a balloon payment before you own the car. It is the most expensive way to do this, but the most affordable in terms of monthly and initial outlay. PCP isn't usually available on cars older than 5 years.

Remember, the more you borrow the more it will cost.
what he said

if you have all the cash its straightforward but you're taking the depreciation on the chin, it probably falls 10%+ when you drive it out of the dealer

i p/xed my old vanq s as deposit on my DB9 volante - an ex AML fleet car, higher mileage but cheaper price for age and fully works serviced with new tyres - and financed the balance with a HP loan

then a few months later when i could get better credit i paid the majority of the HP balance with a personal unsecured bank loan which has much lower interest rate so much reduced monthly payments


66MK

374 posts

106 months

Sunday 5th July 2015
quotequote all
For me, I waited at least 20 years whilst I saved up the money to buy my Aston. I walked into the dealer having done my research (everyday, for all of those 20 years!) and I bought exactly the model and year and spec that I wanted. Only two had come up for sale that year and I bought the second one. It is mine. Having paid for it out right I have an Aston Martin in the drive that I can afford and for me, that was the target.

Anyone can leverage and get the money to buy one, 'afford' for me doesn't mean being able to service a debt.

Wait, buy it cash and you will deserve it. Borrow and if you are honest with yourself, you just won't quite feel the same.

Having said that, if time is not on your side, sell everything you have except the garage, borrow as much as you can get and buy one - they are stratospherically.....list of superlatives.... amazing!

biglaugh

PS have a spare 10K available for misc. costs....BR exhaust, full detail, carbon bits and bobs, etc etc etc! smile

Edited by 66MK on Sunday 5th July 02:16

bogie

16,342 posts

271 months

Sunday 5th July 2015
quotequote all
In the past ive financed cars on personal loans, but only ever had 1 new car in my lifetime, that started life a company car which I bought at the end of the lease

The Aston was a cash purchase, I had a great year in 2007 and bought the car I wanted at the time....still I was semi sensible, used models were in short supply but a 12 month old one came up for £20k off list and took the initial sting out of the depreciation

Usually I would try to put 30-50% down and buy a 3-4 year old car that's not depreciating too much, pay it off in 2-3 years max, keep it another few years. Id sooner be in equity on a 3 year old £50k car than in negative equity on a new fully financed £100K one. Its nice to have a few years between cars without any payment commitments, that gives you time to do that old fashioned thing like saving up for the next one wink

Finance is ok so long as you know what the real cost is. As mentioned above, PCP is just renting, the payments usually cover the depreciation, that's about it. It enables people to drive cars they would not otherwise "afford" by deferring a lot of the capital, secured against the car itself. You just have the privilege of paying the extra interest on that capital you are never paying off

If you are happy renting a car for fixed monthly payment then sure PCP is fine, just accept that's what you are doing




simonr100

640 posts

116 months

Sunday 5th July 2015
quotequote all
I bought mine for cash but it was only £40k. I didn't want finance, had spare cash and wanted an Aston.
I have bought cars on finance many years ago and hated making the payments even though I could pay them easily.

AdamV8V

1,379 posts

155 months

Sunday 5th July 2015
quotequote all
66MK said:
For me, I waited at least 20 years whilst I saved up the money to buy my Aston.
If finance is one way for people to not have to wait 20 years to buy an Aston, then it can only be a good thing, I feel.

If you can afford to service the debt, then you can afford the car, simple. It may not be the most financially efficient way of doing it, but it sure is the most time efficient.

It's all horses for courses (of course), but I think it's a little sad you had to wait two decades so you could feel you 'deserved' it when you could have been potentially enjoying it for longer at a negligible incremental cost (5-8% pa).

I bought my first Aston with around 50% of it financed, have successively upgraded it, at the same time as I've paid it off, and last year paid off the last chunk. It meant I got into an Aston 5 years before I could 'afford' one (during which time I could have been run over by a bus!), now own one outright and have the capital that I would happily add some finance to (whilst money is cheap) to get into the next one (mmmm...DBS Volante...).

As always, one man's meat is another man's poison etc etc, so whatever works for you / makes you happy.

Jon39

12,779 posts

142 months

Sunday 5th July 2015
quotequote all

66MK said:
For me, I waited at least 20 years whilst I saved up the money to buy my Aston.
Gearing only makes good financial sense with appreciating assets.

A hindsight comment.
A 20 year old Aston Martin probably is now an appreciating asset, so maybe waiting was not entirely necessary. - smile

Like you though, for my first Aston I do prefer the Gaydon cars.



timbals

64 posts

107 months

Sunday 5th July 2015
quotequote all
AdamV8V said:
66MK said:
For me, I waited at least 20 years whilst I saved up the money to buy my Aston.
If you can afford to service the debt, then you can afford the car, simple. It may not be the most financially efficient way of doing it, but it sure is the most time efficient.
Well that depends, you could afford to service the debt but not the fuel you go through biggrin.

timbals

64 posts

107 months

Sunday 5th July 2015
quotequote all
timbals said:
You should do what is best for you financially. There are lots of options from PCP to HP to personal loan. Create a spreadsheet and calculate what the car will cost you over how long you want to keep the car (probably 2-3 years?), remember to put in depreciation plus the gap between retail and trade plus a bit more (it will be older and with more miles plus wear and tear). Also remember cars with > 40k miles seem to drop off in price too.

I think even the cheapest 35k dealer aston is only going to get you ~26k when selling it back to the dealer (I don't know for sure, just what people have written on the forums)

So the cheapest way to do this is with cash. However, this is only if your cash is sitting in a pile at home. If you have it invested well then it might be cheaper to finance the car.

The second cheapest way is a personal loan with a bank. This presumes you have a credit rating good enough to get the 3.6% being offered at the moment, it is an unsecured loan so it is difficult to set up and depends on what the bank thinks of you. The bank might offer you an interest rate of 20% on the loan so make sure you check what rate you are actually getting.

The next cheapest way is a Hire Purchase loan, this is secured against the car but you're looking at interest rates > 6.5%. It is very easy to set up and you would be guaranteed that rate. This pays off the car completely over the term so the repayments will be large unless you have a big deposit or the car is cheap.

The most expensive way on a used car is PCP. The interest rates are less competitive. At the end of the term there is a balloon payment before you own the car. It is the most expensive way to do this, but the most affordable in terms of monthly and initial outlay. PCP isn't usually available on cars older than 5 years.

Remember, the more you borrow the more it will cost.
I missed one option. You could re mortgage your house. Interest rates are very low right now but paying off over 25 years will cost you. That said if you can repay the money early then it might be the most cost effective way to borrow.

UltraAston

1 posts

104 months

Monday 6th July 2015
quotequote all
You could lease a brand new one. The money factor/interest rate on a V8 Vantage is 0.67% and a V8S is 0.10% for 36 or 47 (need to fact check for 47 months but definitely for 36) months. Yes, you read that right...these are subvened rates at less that 1%. Soooooo you can lease a brand new AM and only be paying the depreciation basically. Some of the residuals are decent and depending on mileage 5000 vs 7500 vs 10000 are further offset up or down 1%.

I don't know how long you'd want the car and it's true you're eating some of the heaviest depreciation costs in the first 12 months, but it still could work out.

It's just finance and personal preference, you can run the numbers yourself and see what your monthly payment would be for financing a used vs leasing a new.

If you want to save up until you can walk in and write a check for a full amount, that's fine, but not necessary. With financing rates relatively low you'd be better off putting your money to work if your risk-adjusted return in an investment is greater than your cost of financing.


Debt and leverage are not inherently bad things...it's over-leverage and not doing the numbers in advance that get people in trouble.

12 POT

113 posts

168 months

Monday 6th July 2015
quotequote all
Jon39 said:
Do the late DB7 cars have lower values than the early Vantages?
Edited by Jon39 on Saturday 4th July 23:14
There are certainly examples now where early Vantages are cheaper than specific variants of the DB7.

Jon39

12,779 posts

142 months

Monday 6th July 2015
quotequote all

UltraAston said:
You could lease a brand new one. The money factor/interest rate on a V8 Vantage is 0.67% and a V8S is 0.10% for 36 or 47 (need to fact check for 47 months but definitely for 36) months. Yes, you read that right...these are subvened rates at less that 1%. Soooooo you can lease a brand new AM and only be paying the depreciation basically.

Some of the residuals are decent and depending on mileage 5000 vs 7500 vs 10000 are further offset up or down 1%.

I do not know what the depreciation in the United States is, but in the UK we would call your advice ManMaths.

Actual figures:-
New with options = £102,000.
Retail after 3 years and 8,000 miles = £58,000.
If the dealer margin is (say) £8,000, then the total depreciation loss was 51% = £52,000.

Putting it another way, you could have 2 Aston Martins. - Yummy.



Edited by Jon39 on Monday 6th July 08:49

Neil1300r

5,487 posts

177 months

Monday 6th July 2015
quotequote all
You are lying on your deathbed discussing your finaces with your children. "I've finally got enough cash to buy the Aston I've always dreamed of...."

Interest rates are increadibly low, various finance options avialble.