Ferrari Finance
Discussion
Hello,
Just wondering about finance in general but want to ask how it would apply to a new F430 for example.
If I run through a quick scenario I would like you great PH's to tell me if it would be possible..
If one were to arrange PCP finance on an F430 (firsty where would the best place to get such finance?)
Then purchase for list then I estimate that over 48 months, 10% deposit and 50% balloon after the 4 years (£66,927) then the payment would be £1700 pm.
But say after 12 months I want to change, could I trade-it in at a dealer or sell it privately first then simply pay off outstanding finance and keep difference if applicable for new deposit?
All in all it would cost £33,801 plus running costs, with the aim of hopefully recouping the deposit upon selling.
Would this work?
Anyone got experience of this first hand?
Would this be the best option to choose it terms of lowest cost?
Just wondering about finance in general but want to ask how it would apply to a new F430 for example.
If I run through a quick scenario I would like you great PH's to tell me if it would be possible..
If one were to arrange PCP finance on an F430 (firsty where would the best place to get such finance?)
Then purchase for list then I estimate that over 48 months, 10% deposit and 50% balloon after the 4 years (£66,927) then the payment would be £1700 pm.
But say after 12 months I want to change, could I trade-it in at a dealer or sell it privately first then simply pay off outstanding finance and keep difference if applicable for new deposit?
All in all it would cost £33,801 plus running costs, with the aim of hopefully recouping the deposit upon selling.
Would this work?
Anyone got experience of this first hand?
Would this be the best option to choose it terms of lowest cost?
holtender_01 said:
But say after 12 months I want to change, could I trade-it in at a dealer or sell it privately first then simply pay off outstanding finance and keep difference if applicable for new deposit?
First off you may have a problem selling - main problem is that anyone buying your car won't be able to put it on finance themselves until your finance has been settled. Not a problem selling back to a dealer but can be a problem selling privately.
Secondly if you use Ferrari Finance you'll then have an early settlement penalty, they usually charge about 3 months interest I think. You can haggle with them on the interest rate, but my experience was that they wouldn't budge on this.
As has been suggested already give Rob Johnson a ring, he'll get you a very good interest rate and with his package there's no early settlement penalty.
if you want to settle early then your best option is a balanced payments scheme. THe interest rate is usually variable and interest is calculated on a daily basis on the outstanding balance rather like a mortgage, because of this you can usually settle up any time with no penalty.
btw- the penalty interest you are paying to settle early is usually to cover the commission the dealer has been paid. Most trade finance agreements are done at FHBR plus XXX which the dealer can choose to set, that is usually split between the finance house and the dealer, so if the dealer offers you 3 points over FHBR he will probably get say 0.7 per point with the balance going to the finance house. Commissions are paid upfront to dealers for the basis of the entire agreement with a clawback clause if you settle early but a good dealer will insisit on a maximum clawback percentage, therefore the more you pay over FHBR usually the higher the early settlement penalty. Be aware while amounts under 15K are covered by the consumer credit act in terms of what the max settlement penalties are, finance over that is unregluated and they can pretty much charge what they like within reason of unfair contract act, so when you get your finance agreement DO read all the T and C smallprint to find out exactly how much you will have to pay.
Also be aware of this, depreciation is not linear - you can easily get caught into negative equity if you take a 48 agreement on a high balloon with a low deposit. For example, a well optioned F430 could potentially lose up to 25 percent in the first year, dropping to about 15 in year 2 and 10 percent in year 3 (these are the averages across the supercar spectrum based on back data).
The minute you drive off in your new car, the first thing you are going to lose is the dealer margin and any delivery charges, typically that runs at 10 percent BEFORE mileage and age depreciation starts. if you bought a waiting list car this will be cut down to probably at lowest 3-4 percent depending on whats for sale and if a dealer has a firm buyer waiting, but you should always reckon to lose 10 percent the minute you drive out the door to avoid problems.
a well specced F430 with about 4K on the clock went on pistonheads recently for about 134K - the list was probably the other side of 155, so thats about 21K for 4K miles, thats about £5 a mile but the car was sold at the wrong time imho and our figures suggest a average depreciation of 2.75 - 3.00 a mile selling at hte end of year 1.
With a 50 percent balloon i would not expect you to get your 10 percent deposit back. if you look at a new F430 coupe you will be looking to spend about 135-140K on average to get a desirable resale spec, a spider would hit you for about 155K with the right options, these figures are based on the fact you (i assume) are not on a waiting list and therefore will probably have to pay a premium of around 2.5-5 percent to get a new car for early delivery). so on that respect after 3 years the car will be worth probably 55 percent (trade) at around 70-75K depending on mileage and retail around 10-15 percent more. the fourth year gives you another deprciation hit beyond that and it tends to be a little worse (optimum time to sell cars are at 2 years, 4 years you probably pay almost all the depreciation on a ferrari after which it slows to a trickle).
So therefore i would say a trade residual of 40-45 percent at 4 years is more realistic.if you want a deposit as well you need to factor that in.
I would generally say if you plan to trade in earlier, the optimum thing to do is the following:
deposit 25 percent.
24 payments.
Balloon of 60 percent.
That will cover you pretty well for the depreciation curve to avoid negative equity, the higher deposit will cover you to get at least a 10 percent deposit out, selling at 2 years and a maximum mileage or about 10K will give you the most resale value and the balloon is realistic.
FHBR should currently be about 6.5 to 7.0 percent depending on your credit status and deposit size (30 percent down gets you the lowest rate) but on 150K with a 25K deposit and a 2 year deal on a brand new car i would budget for about 7.5 percent tops as long as you've not got any adverse history and have lived in your house a decent amount of time and are in a stable employment.
Other things ot bear in mind, for any loan over 100K you will need at least 3-6 months bank statements proving affordability.
Personally i would avoid Ferrari Dealer finance, it is Maranello Financial services and they are shockingly expensive and very poor customer service.
Good luck with your purchase.
btw- the penalty interest you are paying to settle early is usually to cover the commission the dealer has been paid. Most trade finance agreements are done at FHBR plus XXX which the dealer can choose to set, that is usually split between the finance house and the dealer, so if the dealer offers you 3 points over FHBR he will probably get say 0.7 per point with the balance going to the finance house. Commissions are paid upfront to dealers for the basis of the entire agreement with a clawback clause if you settle early but a good dealer will insisit on a maximum clawback percentage, therefore the more you pay over FHBR usually the higher the early settlement penalty. Be aware while amounts under 15K are covered by the consumer credit act in terms of what the max settlement penalties are, finance over that is unregluated and they can pretty much charge what they like within reason of unfair contract act, so when you get your finance agreement DO read all the T and C smallprint to find out exactly how much you will have to pay.
Also be aware of this, depreciation is not linear - you can easily get caught into negative equity if you take a 48 agreement on a high balloon with a low deposit. For example, a well optioned F430 could potentially lose up to 25 percent in the first year, dropping to about 15 in year 2 and 10 percent in year 3 (these are the averages across the supercar spectrum based on back data).
The minute you drive off in your new car, the first thing you are going to lose is the dealer margin and any delivery charges, typically that runs at 10 percent BEFORE mileage and age depreciation starts. if you bought a waiting list car this will be cut down to probably at lowest 3-4 percent depending on whats for sale and if a dealer has a firm buyer waiting, but you should always reckon to lose 10 percent the minute you drive out the door to avoid problems.
a well specced F430 with about 4K on the clock went on pistonheads recently for about 134K - the list was probably the other side of 155, so thats about 21K for 4K miles, thats about £5 a mile but the car was sold at the wrong time imho and our figures suggest a average depreciation of 2.75 - 3.00 a mile selling at hte end of year 1.
With a 50 percent balloon i would not expect you to get your 10 percent deposit back. if you look at a new F430 coupe you will be looking to spend about 135-140K on average to get a desirable resale spec, a spider would hit you for about 155K with the right options, these figures are based on the fact you (i assume) are not on a waiting list and therefore will probably have to pay a premium of around 2.5-5 percent to get a new car for early delivery). so on that respect after 3 years the car will be worth probably 55 percent (trade) at around 70-75K depending on mileage and retail around 10-15 percent more. the fourth year gives you another deprciation hit beyond that and it tends to be a little worse (optimum time to sell cars are at 2 years, 4 years you probably pay almost all the depreciation on a ferrari after which it slows to a trickle).
So therefore i would say a trade residual of 40-45 percent at 4 years is more realistic.if you want a deposit as well you need to factor that in.
I would generally say if you plan to trade in earlier, the optimum thing to do is the following:
deposit 25 percent.
24 payments.
Balloon of 60 percent.
That will cover you pretty well for the depreciation curve to avoid negative equity, the higher deposit will cover you to get at least a 10 percent deposit out, selling at 2 years and a maximum mileage or about 10K will give you the most resale value and the balloon is realistic.
FHBR should currently be about 6.5 to 7.0 percent depending on your credit status and deposit size (30 percent down gets you the lowest rate) but on 150K with a 25K deposit and a 2 year deal on a brand new car i would budget for about 7.5 percent tops as long as you've not got any adverse history and have lived in your house a decent amount of time and are in a stable employment.
Other things ot bear in mind, for any loan over 100K you will need at least 3-6 months bank statements proving affordability.
Personally i would avoid Ferrari Dealer finance, it is Maranello Financial services and they are shockingly expensive and very poor customer service.
Good luck with your purchase.
Edited by nopantshans on Friday 20th April 15:27
nopantshans said:
Lots of important & relevant stuff
If there has ever been a more thorough response to a question on here i've not seen it
Just wish I was in a position to ask the same question i'm still working out which kidney to sell to buy Sarbs' Blue 360 spider in June!!
H
Edited by kippax on Friday 20th April 14:53
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