best way to borrow

Author
Discussion

COLCERB

Original Poster:

127 posts

247 months

Sunday 20th April 2008
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hi guys, financing my new car, its 50k and i got to borrow 45k whether it be a 5 year term which i would prefer or 4 years and a balloon payment. what or who is the best to help

Hobo

5,764 posts

247 months

Sunday 20th April 2008
quotequote all
I think you'll struggle & in all honesty, within meaning to sound awful, do not think such a purchase is a clever one it you can't put in substancially more as a deposit.

You could speak to sports & classic finance though & see what they say.

Out of interest whats the car you're looking at ?

COLCERB

Original Poster:

127 posts

247 months

Sunday 20th April 2008
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its a porsche 997, you see i have just had a wage increase and i have an extra £800 pounds a month burning a hole in my pocket

Hobo

5,764 posts

247 months

Sunday 20th April 2008
quotequote all
Just answered your thread in the Porsche forum. Personally I'd stay clear until you can put down at least 20%.

Alternatively have you considered leasing ?

COLCERB

Original Poster:

127 posts

247 months

Sunday 20th April 2008
quotequote all
havent thought about leasing, if im going to pay out 7-8 hundred pound a month i would like to own it at the end of term

Hobo

5,764 posts

247 months

Sunday 20th April 2008
quotequote all
Use this to work out what payments should be. APR rate should be somewhere near 8%.

http://www.grosvenor-butterworth.co.uk/frameset-ca...

I'd warn you that Porsches don't hold thier value like you may have been advised, well new ones anyway.

If you really want a 50k porsche then you're less risky option may be a used GT2, GT3 or a 993 as the bulk of the depreciation has already been taken. Me, I'd wait until you've got a bit more of a deposit & get a 996GT2. 55k & would't expect it to lose much, if any in the next 5 years.

Hobo

5,764 posts

247 months

Sunday 20th April 2008
quotequote all
COLCERB said:
havent thought about leasing, if im going to pay out 7-8 hundred pound a month i would like to own it at the end of term
Yes, so would I, but with a 40% balloon payment you're never going to !!!

JustinP1

13,330 posts

231 months

Sunday 20th April 2008
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Hobo said:
COLCERB said:
havent thought about leasing, if im going to pay out 7-8 hundred pound a month i would like to own it at the end of term
Yes, so would I, but with a 40% balloon payment you're never going to !!!
Agreed.

Secondly, you may find that if you can get a leasing deal, the payments over say two years are pretty much the same as you would expect the car to depreciate during that time plus the interest you would be paying on 45K.

If your deposit is greater, it can be better to loan and own, however, if your deposit is small, the majority of your repayments for the first two years are interest. For example, on 45K at 10% thats £380 per month just in interest. Even if the depreciation over the first two years is only £6k per year - which is conservative - thats an additional £500 per month lost.

Therefore over two years, if you can lease at £800 then you are actually quids in - essentially you have a guaranteed costing, whereas if you need to pull out after two years with a loaned car, who knows what the market for high-end motors is going to be then!

Tearz

464 posts

206 months

Monday 21st April 2008
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PM me and I'll get one of my guys to call you and help you to get the BEST deal.

taffyracer

2,093 posts

244 months

Monday 21st April 2008
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Lombard has some of the best balanced payment deals about

cardigankid

8,849 posts

213 months

Tuesday 22nd April 2008
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Although what you are saying sounds crazy, I imagine that the cost of new 911's is going to rocket shortly as the exchange rate bites, so from that point of view it may be a good time to buy.

However. Are you really sure that you want to take on this amount of debt as we go into a major recession? However good a deal you get, it is bound to be worse than the low interest deals that were available a year ago.