Mercedes finance

[Uahmed92]

Hi all,

Thinking of getting a Mercedes on pcp from my local merc dealer, ideally the new a class or even a45 would be nice. Just wanted to know does anyone know what are the requirements for getting pcp finance from merc, as I know some dealers require you to have been working for a few years and on the other hand some online leasing companies only ask for 3 months employment at the time of application. I have been working for 6 months, it’s my first proper graduate job and I’m on a good wage and have a decent credit history (always made payments on time, no debts etc). Could I still get finance from merc if I’ve only been working 6 months?

[Wooda80]

I've never worked for Mercedes but I've sold cars and finance for a number of similar manufacturers.

If your credit history is strong enough ( in other words if you have run your previous credit commitments well with no late or missed payments ) and your income and outgoings show that the car payment is affordable ( in the eyes of the underwriters ) then it shouldn;t be a problem.

Don't be put off by the bit on the finance application that requires employment history for 3 years, It's perfectly acceptable to put student / homemaker / unemployed etc as appropriate in those spaces as long as you are now in permanent full time employment.

Be upfront and honest with the dealer and they will be able to help. It's not in their interests to say "Sorry sir, you don't deserve one of our cars yet" , despite the impression some seem to have.

[Mo28]

In regards to when actually looking for the car you want, don't conclude your search at your local dealers as there are better deals to be had from other dealers. Use websites like carwow, drivethedeal and orange wheels etc.

[Sheepshanks]

To get the deposit contribution I took a PCP with VWFS and I can't recall any questions about salary (mine is very low, I mainly take dividends) and certainly there were no outgoings details.

In fact, now I think about it, it was the same with daughter when she got a Honda PCP. I was covering the cost, there's no way she'd be able to afford it, but it went through in her name with no queries.

I know neither of these are Mercedes, but I don't know why they would be any different, unless things have changed in the last couple of years. I'd have thought any manufacturer would be keen to get a graduate on the hook. In the US, they do college leavers special deals.

[Wooda80]

Sheepshanks said:

To get the deposit contribution I took a PCP with VWFS and I can't recall any questions about salary (mine is very low, I mainly take dividends) and certainly there were no outgoings details.

In fact, now I think about it, it was the same with daughter when she got a Honda PCP. I was covering the cost, there's no way she'd be able to afford it, but it went through in her name with no queries.

I know neither of these are Mercedes, but I don't know why they would be any different, unless things have changed in the last couple of years. I'd have thought any manufacturer would be keen to get a graduate on the hook. In the US, they do college leavers special deals.

The FCA introduced rules around that time requiring lenders to consider affordability when making decisions. This will no doubt confound those who ask "How can my neighbour drive that, he obviously can't afford it".

Proposal forms now have a box for Gross Annual Income ( not salary you notice, so commission, bonus, overtime, dividends, income from private investments, state benefits etc all count ). If you weren't asked then either you bought before the requirements kicked in, or the salesman was too shy to ask and guessed on your behalf.

Underwriters can see other finance commitments including any property mortgage on your credit file, and have data for likely household outgoings such as utilities based on your post code.

Black Horse ( as JLR Finance ) actually ask customers to declare "Their Share of Mortgage or Rent" that they pay, as well as "Any Other Regular Outgoings That May Not Appear On Your Credit File" ( this is typically school fees or maintenance payments rather than how much you spend in Aldi / Waitrose every month or the size of your crack habit ). The customer can complete this part themselves if they are embarrassed and the information entered is not displayed on screen.

Back to the OP's dilemma: if the finance company have any concerns about his ability to repay then they may ask for payslips as proof of income ( P60 for company directors as Sheepshanks highlighted, bank statements or last accounts for self employed ). If your credit history is good but the finance company consider that you were overstretching yourself then they will respond with a Maximum Advance that they will lend, so that you can either put down a bigger deposit on the car that you want, or choose a less expensive car that fits with in the amount that they will advance you.

[Dr Jekyll]

Wooda80 said:

If your credit history is good but the finance company consider that you were overstretching yourself then they will respond with a Maximum Advance that they will lend, so that you can either put down a bigger deposit on the car that you want, or choose a less expensive car that fits with in the amount that they will advance you.

Is it possible to roughly calculate what an average lender will consider your Maximum Advance before approaching the dealer?

[Welshbeef]

I wish I could have afforded a £45k car when I left uni & I was Pre any fees.

[Wooda80]

Dr Jekyll said:

Is it possible to roughly calculate what an average lender will consider your Maximum Advance before approaching the dealer?

It's not any kind of magic formula, it's all down to affordability. If you yourself can see that you can afford the payments then the fin co will likely come to the same conclusion. People with good credit histories seldom commit themselves to outgoings they can't afford.

As an example, I've two recent similar customers who are in their 20s, living with parents, single but with dependent child(ren), gross income less than £30000 but paying £6-800 per month on a used Mercedes C63 type car. Little or no deposit in either case, major finance companies ( not knee-cap finance ), sensible interest rate. Yes I know some will be fuming that they shouldn't be allowed to do that and must be forced to save for a pension or deposit for a house, but that's not the finance company's place to judge.

On the other hand I've had customers with very high incomes, but very high existing commitments and / or poor repayment history where the finance company have informed me that they wouldn't even lend him a pen to sign the documents!

Edited by Wooda80 on Sunday 24th June 08:58