Can you end a HP beyond the halfway point?
Discussion
Advise........I am prepared to be shot down by all the people that consider ANY finance deal from a main dealer is a good thing.......it ain't.
The best advise is to ignore anything a dealer spouts to you and approach your own bank and see what they can do by way of competing.
What dealers do NOT tell you while you're sitting the other side of the desk is that - you DO NOT own the car at all until the last payment is made. The finance company own the car during the whole period of the loan. (This is because the car is the financial security for the loan).
A bank loan is for something that the bank has NO interest in at all. So, from day 1 of you collecting your car - YOU own the car. The banks security is you and/or your property. The bank has known you for a number of years and is aware of what sort of risk you are.
Far, far too many people get sucked in by what the salesman knows you will probably fall for. In the long run.....a bad deal.
The best advise is to ignore anything a dealer spouts to you and approach your own bank and see what they can do by way of competing.
What dealers do NOT tell you while you're sitting the other side of the desk is that - you DO NOT own the car at all until the last payment is made. The finance company own the car during the whole period of the loan. (This is because the car is the financial security for the loan).
A bank loan is for something that the bank has NO interest in at all. So, from day 1 of you collecting your car - YOU own the car. The banks security is you and/or your property. The bank has known you for a number of years and is aware of what sort of risk you are.
Far, far too many people get sucked in by what the salesman knows you will probably fall for. In the long run.....a bad deal.
anonymous said:
[redacted]
I'm not getting in the pro and cons of dealership finance, but the answer to your question is no. Assuming you are correct that this is an HP agreement and not a PCP agreement that the dealer has quoted you for then you are obligated to make the final payment and take full title of the vehicle. You will never reach a stage in the agreement whereby it would be possible to VT agreement either, as around 70% of the total value of the loan is the final payment.Double check with the dealer that this is definitely a HP agreement. Additionally, you should have been able to ask the dealer this question. Any dealer who is unwilling to answer customer questions about a finance product they are selling should not be dealt with.
The drawback is that you have to pay £5000 in month 25, and probably will have a car which will be worth less than that. Given that the PCP guaranteed future value can't be made that high, that would be a pretty huge risk.
Based on the numbers, I presume you are buying a car that is about 7k retail with a low deposit. If you took the car out of the showroom and drove it round the corner to another dealer and tried to trade it in, I'd doubt you would get £5k for it there and then, never mind two years later.
The only reason to take that deal would be if it was a 0% finance, and you already had the £5k in the bank. I suspect the salesman is chasing after his commission knowing he's unlikely to be there to see you in two years time when you try to trade in a car worth less than the finance owed....
Based on the numbers, I presume you are buying a car that is about 7k retail with a low deposit. If you took the car out of the showroom and drove it round the corner to another dealer and tried to trade it in, I'd doubt you would get £5k for it there and then, never mind two years later.
The only reason to take that deal would be if it was a 0% finance, and you already had the £5k in the bank. I suspect the salesman is chasing after his commission knowing he's unlikely to be there to see you in two years time when you try to trade in a car worth less than the finance owed....
If he's selling a car for 6500 when comparable ones are over 8000 then I would also be wary. Dealers are normally higher but at this price point there shouldn't be almost 2k difference.
Make sure it isn't an ex lease car and the history is all good.
You could always pay the finance off early by getting an early settlement and you'd only pay interest up to the point you settled.
Make sure it isn't an ex lease car and the history is all good.
You could always pay the finance off early by getting an early settlement and you'd only pay interest up to the point you settled.
No no no, you've no need to spend all that money. An £800 2003 Yaris suits my needs perfectly and therefore will suit your needs perfectly too 
But to try and answer your questions:
1) If the deal with the £5000 balloon is still in consideration then ask the salesman to show you where on the agreement it says that you have the right to return the car to the finance company at the end of the agreement. That's the only way that you will be certain. You won't have repaid the half of the total necessary to do a voluntary termination.
2) If you are going into it with the intention that you will repay the balloon and keep the car, then provided that you are happy with the interest rate, what does it matter what the balloon is? ( That's not meant to cound confrontational )
But to try and answer your questions:
1) If the deal with the £5000 balloon is still in consideration then ask the salesman to show you where on the agreement it says that you have the right to return the car to the finance company at the end of the agreement. That's the only way that you will be certain. You won't have repaid the half of the total necessary to do a voluntary termination.
2) If you are going into it with the intention that you will repay the balloon and keep the car, then provided that you are happy with the interest rate, what does it matter what the balloon is? ( That's not meant to cound confrontational )
datum77 said:
Advise........I am prepared to be shot down by all the people that consider ANY finance deal from a main dealer is a good thing.......it ain't.
The best advise is to ignore anything a dealer spouts to you and approach your own bank and see what they can do by way of competing.
What dealers do NOT tell you while you're sitting the other side of the desk is that - you DO NOT own the car at all until the last payment is made. The finance company own the car during the whole period of the loan. (This is because the car is the financial security for the loan).
A bank loan is for something that the bank has NO interest in at all. So, from day 1 of you collecting your car - YOU own the car. The banks security is you and/or your property. The bank has known you for a number of years and is aware of what sort of risk you are.
Far, far too many people get sucked in by what the salesman knows you will probably fall for. In the long run.....a bad deal.
The word is 'advice'.The best advise is to ignore anything a dealer spouts to you and approach your own bank and see what they can do by way of competing.
What dealers do NOT tell you while you're sitting the other side of the desk is that - you DO NOT own the car at all until the last payment is made. The finance company own the car during the whole period of the loan. (This is because the car is the financial security for the loan).
A bank loan is for something that the bank has NO interest in at all. So, from day 1 of you collecting your car - YOU own the car. The banks security is you and/or your property. The bank has known you for a number of years and is aware of what sort of risk you are.
Far, far too many people get sucked in by what the salesman knows you will probably fall for. In the long run.....a bad deal.
The second point is you are clueless about finance. "A bank loan is for something that the bank has NO interest in at all. " This is the most stupid piece of s
t advice ever. Whilst your simple analogy makes sense in so far as a car loan is secured against an an asset such as a car, what do you think a bank loan is secured against? You!Gassing Station | Car Buying | Top of Page | What's New | My Stuff