Best approach for dealer deals smoke & mirrors/balloons

[Bingo Brian]

Currently researching the dream car and have settled on an Aston Vantage V8. I had my chunky deposit and my budget set for a 2 year old car and would then own the car outright in 3 years. Trouble is the dealers start getting you involved in their finance deals and offering tempting discounts on new better cars.

So I'm rather confused - the whole notion of the balloon end payment means you pay interest on that deferred capital amount over several years but never clear the debt. They suggested if I didnt chop the car in for a new one (assuming it really did have a residual value beyond the amount of the balloon payment this could be used as a deposit) that I could borrow more from scratch and then pay this sum off and the capital and interest on this new loan. Basic extrapolations and calculations make it look expensive to me and (300pm in interest only) not once have I had anything printed with full details - its all by phone with a 'why wouldn't you' implication 'everyone else does'! Someone also said that certain arrangements can be outside consumer protection laws...

So how do I dig through this smoke and mirrors approach best and make sure I'm getting the best no part ex deal, and am I right to be cynical about these balloon schemes that 'everyone does'? We all know what they often offer insulting amounts on part ex's after all...

Anyone been burnt by them?

Cheers

[Dr G]

Do you want to own the car? If so take an HP and own it outright at the end.

Dealers generally want part exchanges; they don't want owners with unrealistic ideas of the value of their car.

[Bingo Brian]

When you own your car you know where you are - that is my usual preferred 'old fashioned' way. Just trying to think outside that experience here given its maybe not what 'everyone else does'!

[johnny fotze]

Cash. If you can buy one on a 3 year drip then you could buy one outright by saving the payments for two years, or even less if you really try. Then when the dealer starts with his "finance to the eyeballs, they're all in it", you can give a derisory snort, slap your wad in his face and say "It's two years old, I think I'll be paying cash" like you're Rockefella himself. And, not only are you Billy big wad, but you will own a two year old car, whilst your 'gotta have it now' alter ego has still got another year to pay on a car that's 2 years older.
Makes sense to me.

[Bingo Brian]

Makes sense to me too Johhny! Bish bosh look at my wad Mr White Shirt with a cunning spreadsheet!!!

[M4cruiser]

Bingo Brian said:

the whole notion of the balloon end payment means you pay interest on that deferred capital amount over several years but never clear the debt.

Yes, that's exactly the way it works, they want you to keep a large amount outstanding, because interest is accrued / charged on the outstanding balance.

Just keep your cool, keep telling them you're looking for the cash price, with the cash value of your px to be taken off (you need both figures, not just the "difference"), then you know where you stand. Then maybe get a bank loan for the amount - it's sometimes cheaper than HP, sometimes not.

[Bingo Brian]

Thanks M4. I have no part ex which is why i want a good simple deal. As you say stay cool and work a deal

[Ari]

Bingo Brian said:

its all by phone with a 'why wouldn't you' implication 'everyone else does'!

I suggest that you tell them that since 'everyone does' (buy new on the drip instead of used), their used stock must be overpriced and not selling (if it were selling then clearly not everyone does!).

And on that basis you'll be needing a hefty chunk off their nice used 2 year old Aston as, by their own implication, it is clearly completely over-priced.

[Bingo Brian]

I suspect its the other way around mate. New cars possibly (?) overpriced so 'normal' enthusiast buyers wary so want to buy used to save the huge hit. Hence discounted new to help mitigate this...?

Drove one in Essex today... A noise Porsche owners can only dream of if piped in through their EU speakers! Sorry!