Help me finance a car, PH!
Discussion
Right all, I wish to treat myself to a new toy, as a mature present to congratulate myself on settling down and getting engaged. i.e. bribe myself into thinking that this is a great idea, and that I haven't just given up my wayward and unacceptable ways for nothing.
I will be selling the whole fleet (except the Saab. OK, and maybe the Landy) and buying something a little more modern, but still second-hand, as depreciation on new cars makes me feel a little queasy.
I normally buy outright, but have decided that I could do something else with some of my cash. However doing this means not getting absolutely stuffed on the finance interest. I have just been given these figures by a very helpful financier – and to me, these APR figures look rather too chunky, and do not represent value. That said, I know nothing so perhaps some peer review by you chaps, and suggestions as to how I could best finance this car?
Also, he has 47 months in his figures. That seems a little long to me: ideally I’d keep it for a couple of years and then buy something else, especially if me and Lady F have to buy a non-London home and estate car due to Flashman juniors *shudders*. So what about break penalties, early repayment etc etc?
Honestly, I know that these are naive questions to many, but I have never really needed a daily workhorse, as I live in London, so have never had any kind of lease, PCP, or car loan....so what questions should I be asking, and how do I find the best deal?
Frankly, I don't even really know the difference between lease, HP and PCP, although I will clearly be doing some research now...
Price £70,900
Deposit £17,000
Balance £53,900
47 x £989.83
Final payments £20,753.85
APR 9.12%
Or
As above with £25,000 deposit
Balance £45,900
47 x £794.28
Final payment £20,753.85
APR 9.35%
Hire Purchase (HP)
Price £70,900
Deposit £40,000
Balance £30,900
59 x £646.60
Final payment £845.60
APR 9.94%
I will be selling the whole fleet (except the Saab. OK, and maybe the Landy) and buying something a little more modern, but still second-hand, as depreciation on new cars makes me feel a little queasy.
I normally buy outright, but have decided that I could do something else with some of my cash. However doing this means not getting absolutely stuffed on the finance interest. I have just been given these figures by a very helpful financier – and to me, these APR figures look rather too chunky, and do not represent value. That said, I know nothing so perhaps some peer review by you chaps, and suggestions as to how I could best finance this car?
Also, he has 47 months in his figures. That seems a little long to me: ideally I’d keep it for a couple of years and then buy something else, especially if me and Lady F have to buy a non-London home and estate car due to Flashman juniors *shudders*. So what about break penalties, early repayment etc etc?
Honestly, I know that these are naive questions to many, but I have never really needed a daily workhorse, as I live in London, so have never had any kind of lease, PCP, or car loan....so what questions should I be asking, and how do I find the best deal?
Frankly, I don't even really know the difference between lease, HP and PCP, although I will clearly be doing some research now...
Price £70,900
Deposit £17,000
Balance £53,900
47 x £989.83
Final payments £20,753.85
APR 9.12%
Or
As above with £25,000 deposit
Balance £45,900
47 x £794.28
Final payment £20,753.85
APR 9.35%
Hire Purchase (HP)
Price £70,900
Deposit £40,000
Balance £30,900
59 x £646.60
Final payment £845.60
APR 9.94%
Edited by Harry Flashman on Friday 20th February 15:04
First of all the APR is shocking in both deals - is this for a used car? If yes, can you get a deal on a new version, in a lot of cases there are better deals on new cars than used as was the case with me where a new car was cheaper on PCP than a used 1-2 year old car.
So APR is the first place to start, I would be shopping around with other providers such as Black Horse to see if you can get a better deal.
Also test what difference the deposit makes i.e. providing less so you have less ££££ tied into the car.
Where these figure pre, post or no haggle?
Have you considered a personal contract lease, less appealing than a PCP as there is no flexibility but there can be some epic deals e.g. my last car - C63 Coupe for £600 per month with only £1800 down or the current M5 for around £650 per month (incl. VAT).
So APR is the first place to start, I would be shopping around with other providers such as Black Horse to see if you can get a better deal.
Also test what difference the deposit makes i.e. providing less so you have less ££££ tied into the car.
Where these figure pre, post or no haggle?
Have you considered a personal contract lease, less appealing than a PCP as there is no flexibility but there can be some epic deals e.g. my last car - C63 Coupe for £600 per month with only £1800 down or the current M5 for around £650 per month (incl. VAT).
I know they are awful - Aston Martin offered me 6% straight off the bat (admittedly on a new V8 Vantage Volante, which is not quite what I'm after), so this chap is really being quite cheeky! The deal above is on a used car.
But this is exactly why I need your advice:
- how do I go about this
- who do I speak to
I could buy the car outright, and perhaps this is the best plan (it's what I have always done so far), but I want to investigate the world of finance, as a complete beginner.
But this is exactly why I need your advice:
- how do I go about this
- who do I speak to
I could buy the car outright, and perhaps this is the best plan (it's what I have always done so far), but I want to investigate the world of finance, as a complete beginner.
Assuming you have a good credit rating you could borrow either as a personal loan or from your mortgage if you had enough equity in it. Easy enough to get 4% or so as a personal loan and borrow even cheaper if you can add it to your mortgage (sub 3% fixed offers just now). Dealer rates shown there aren’t great unless they were going to give a large dealer contribution to the deposit.
Lease = deposit plus equal payments and hand back car at end e.g. 3+35 = 3 months payment as deposit then 35 equal payments
PCP = Sale Price - Residual Price (GFV) - Deposit, then divided against term agreed e.g. 36 or 48 months with interest charges added
- Option to hand back at end of agreement
- Option to purchase at end of agreement for GFV
- Mileage penalties apply if exceed limit if handing back
- Can voluntary terminate after 50% value of agreement made (usually 2/3's away through term, but needs to be calculated based on value)
HP = Sale Price - Deposit, then divided against term agreed with interest charges added
- Can voluntary terminate after 50% value of term
PCP tends to be the cheapest way to buy a car these days and around 90% of new cars are now sold on PCP.
PCP = Sale Price - Residual Price (GFV) - Deposit, then divided against term agreed e.g. 36 or 48 months with interest charges added
- Option to hand back at end of agreement
- Option to purchase at end of agreement for GFV
- Mileage penalties apply if exceed limit if handing back
- Can voluntary terminate after 50% value of agreement made (usually 2/3's away through term, but needs to be calculated based on value)
HP = Sale Price - Deposit, then divided against term agreed with interest charges added
- Can voluntary terminate after 50% value of term
PCP tends to be the cheapest way to buy a car these days and around 90% of new cars are now sold on PCP.
My mortgage runs at 1% and I have lots of equity in the house, so absolutely could do that, and then simply pay it back. Why didn't I think of this myself?
That said, the whole point of financing is to allow me to do something else with the spare cash, like more into my pension/investments rather than into a car.
PS - e-mail from Lady F just now when I sent her the link to the car:
"The car is 74 THOUSAND POUNDS!?!? that is definitely some man maths!!!"
Heh. Best to get her used to the sort of man she'l be marrying. This girl earns very well for herself, but is one of the least extravagant people I know. Unlike me, poor thing.
That said, the whole point of financing is to allow me to do something else with the spare cash, like more into my pension/investments rather than into a car.
PS - e-mail from Lady F just now when I sent her the link to the car:
"The car is 74 THOUSAND POUNDS!?!? that is definitely some man maths!!!"
Heh. Best to get her used to the sort of man she'l be marrying. This girl earns very well for herself, but is one of the least extravagant people I know. Unlike me, poor thing.
Edited by Harry Flashman on Friday 20th February 15:19
Harry Flashman said:
I know they are awful - Aston Martin offered me 6% straight off the bat (admittedly on a new V8 Vantage Volante, which is not quite what I'm after), so this chap is really being quite cheeky! The deal above is on a used car.
But this is exactly why I need your advice:
- how do I go about this
- who do I speak to
I could buy the car outright, and perhaps this is the best plan (it's what I have always done so far), but I want to investigate the world of finance, as a complete beginner.
Okay so first of all see if you can get a better deal on a new car.But this is exactly why I need your advice:
- how do I go about this
- who do I speak to
I could buy the car outright, and perhaps this is the best plan (it's what I have always done so far), but I want to investigate the world of finance, as a complete beginner.
Second, tell him the figures are terrible and 9% APR is a complete joke when 1) interest rates are so low 2) you have an excellent credit rating.
If he comes back with another poor offer i.e. above 5-6% APR tell him to use another finance company. He has to use Aston's which is provided by Alphera (BMW FS) and they will only tend to look at others if you request it.
I also think you should be pushing hard for discount on the car too. Aston's hardly fly off the shelf due to their high cost on none of the models are exactly new now.
If you go used try and work out how long the car has been sat there. The dealer 'pays' for the car being there and most use 60-90 days dealer finance so hope to shift them by that time.
If you go used try and work out how long the car has been sat there. The dealer 'pays' for the car being there and most use 60-90 days dealer finance so hope to shift them by that time.
Agreed that APR is a very poor offer.
Are you a credit ghost or anything? I.e. there should be no reason why lenders would be wary of you.
I got a PCP of 5.5% from a Jag main dealer for my XF. It was financed as a used car because it was their demonstrator. PCP rates for new were 5.1%.
I got a Ranger from a Ford dealer through my business last month with no credit history (had accounts but no business loans or overdraft previously) and still got 6.1% without arguing.
I wouldn't be interested in paying 9%. Find a better broker!
Are you a credit ghost or anything? I.e. there should be no reason why lenders would be wary of you.
I got a PCP of 5.5% from a Jag main dealer for my XF. It was financed as a used car because it was their demonstrator. PCP rates for new were 5.1%.
I got a Ranger from a Ford dealer through my business last month with no credit history (had accounts but no business loans or overdraft previously) and still got 6.1% without arguing.
I wouldn't be interested in paying 9%. Find a better broker!
TheAngryDog said:
Dan_1981 said:
Engaged?
Settled down?
When I first joined PH, Flashman stories were the things of legend.
PH mourns.
Thankfully the cringe thread has been closed
Tis a sad day indeed!Settled down?
When I first joined PH, Flashman stories were the things of legend.
PH mourns.
Thankfully the cringe thread has been closed
What is this car that causes such financial considerations?
rpla102 said:
TheAngryDog said:
Dan_1981 said:
Engaged?
Settled down?
When I first joined PH, Flashman stories were the things of legend.
PH mourns.
Thankfully the cringe thread has been closed
Tis a sad day indeed!Settled down?
When I first joined PH, Flashman stories were the things of legend.
PH mourns.
Thankfully the cringe thread has been closed
What is this car that causes such financial considerations?
The car in question is an Audi R8 V10 Spyder. I love my Morgan, but need something equally fun, but utterly reliable. So Ferraris and Lamborghinis don't cut it, the V8 Vantage isn't really special enough and I don't really want to spend 70-90k on a Porsche.
Andyjc86 said:
Dan_1981 said:
Engaged?
Settled down?
When I first joined PH, Flashman stories were the things of legend.
ThisSettled down?
When I first joined PH, Flashman stories were the things of legend.
Have we been introduced to the future Lady F through your previous tales, or is this a new conquest?And just when is she going to find your previous threads? That should ensure any worries she has about your man-maths seem insignificant.
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