Ferrari finance advice please

[mrbon007]

Hey,

I am looking to buy a F430 for approximately £70k-£80k and would like to finance it but am unsure if this is possible due to my situation so would like some advice.

I currently own a 997 Turbo woth about £55k which I own outright. Obviously having this much money tied up in a car, and adding aonther £20k on top is quite a bit and I would rather free up the cash and get the new car on finance.

Without saying too much my problem is this;
I am 27 and do not own my home as i move house every year or two to follow the openings of new business premises.
I own my own company with a high turnover and profits of £100k+ per year, but for obvious reasons i only pay myself a wage which is closeley matched to my actual spending needs (circa £30k PA).

Obviously calling a finance company and asking for £75k when i "earn" £30k is not gonna work, so can finace be arranged based on my company? if so would the car need to be in the company name?

Also there seem to be tons of options with regards to finance such as balloon payments etc which I do not understand as i have always bought my cars with money i have in the bank, can anyone offer opinions regading the best route to take?

Would it be best to get finance from a ferarri dealer or just a company such as Oracle etc?

Thanks in advance for your replies!

[900ssduke]

Pay it in cash and live free.

[GeraldSmith]

900ssduke said:

Pay it in cash and live free.

Finance is fine if you have better use for your cash, generally not something people understand unless they own their own businesses.

I have had very good finance from dealers, particularly if buying at the end of a quarter when they have targets to meet. Personally I've never been a fan of the balloon payment style, I've had people try to tell me how wonderful it is but never been too impressed that it works for me, when I've done it it's been as a straight forward loan paid back over a couple of years.

[Obiwonkeyblokey]

some will work on the basis that if youre the sole dircetopr and your company is making money they will consider that as potential income. try carlyle finance. they might be able to assist. with a large deposit your making it easier for yourself.

[elms]

Give Classic and Sports Finance a call. Ask to speak to Robert, he works these deals all the time and will work it out for you

0845 026 4242

www.classicandsportsfinance.com

[Mario149]

mrbon007 said:

Without saying too much my problem is this;
I am 27 and do not own my home as i move house every year or two to follow the openings of new business premises.
I own my own company with a high turnover and profits of £100k+ per year, but for obvious reasons i only pay myself a wage which is closeley matched to my actual spending needs (circa £30k PA).

That's quite interesting, I hypothetically would have a similar problem to you if I decided to upgrade to something similar. I'm curious to know how this pans out for you.

I'm personally a fan of just owning the car outright, I can't stand being in debt. As much as I would love/could afford to upgrade to say an F430 using finance, it just wouldn't sit right with me.

Silly question, but maybe look at getting into a cheaper Fcar? If it would be your first, you'd probably still get the same buzz/thrill whatever it was and save a bit of money to boot, and frankly even an F430 probably doesn't feel quite as brutally quick as a 997 Turbo!

[Shmee]

The situation is very similar from mine; young and owner of a fairly expensive car (Audi S5 Cab) and I traded out of this and into an Aston V8 Vantage which at the time I was comparing against the F430 at around the same budget (newer AM).

My income is incredibly complicated so a traditional finance company wasn't the way to go for me (Oracle Finance wanted 11.9% APR - jokes), I spoke to Lombard Asset Finance and they tailor made everything around my circumstances, taking into account all my income streams and assets to put together an absolutely fantastic deal for me. I have a specific contact to talk to and all follow up communication has been brilliant. I would thoroughly recommend getting in touch with them and seeing what they can offer you.

Anybody who immediately jumps in to say things like "Pay it in cash and live free." either hasn't stopped to work out how using the cash elsewhere can be beneficial and just assumes finance is always a disaster or was silly enough to finance something they couldn't afford and got burned. Building up an even better credit rating when quite young is not bad thing either.

[Mario149]

Shmee said:

Anybody who immediately jumps in to say things like "Pay it in cash and live free." either hasn't stopped to work out how using the cash elsewhere can be beneficial and just assumes finance is always a disaster or was silly enough to finance something they couldn't afford and got burned. Building up an even better credit rating when quite young is not bad thing either.

Good point Thinking about my own situation a bit more, I guess I'd just be concerned that although I've got it very good with work/money at the mo and there's no reason why it shouldn't continue and even get better maybe, I feel that it could all be taken away by things out of my control as quickly as it arrived somehow and I could be saddled with a large debt and no means to pay it off without having to sell the car under pressure and losing more money in the process. So ironically, if I had say £50k cash in my hand to spend on a car, if I got finance to allow me to keep some of the cash in my hand for other things, I'd probably just end up putting it in a savings account untouched "just in case" rather than actually using it on other things

And as with the OP, although my company turnover/profit is all good, I only see a much reduced amount as personal income in order to reduce the amount of tax etc I have to pay - I don't _need_ the extra cash really (as much as I adore cars fun cars, they really are just big toys!) so why draw more out and have to send a large amount of it to HMRC.

Edited by Mario149 on Monday 24th January 15:19

[MrOrange]

mrbon007 said:

Hey,

I am looking to buy a F430 for approximately £70k-£80k and would like to finance it but am unsure if this is possible due to my situation so would like some advice.

I currently own a 997 Turbo woth about £55k which I own outright. Obviously having this much money tied up in a car, and adding aonther £20k on top is quite a bit and I would rather free up the cash and get the new car on finance.

Without saying too much my problem is this;
I am 27 and do not own my home as i move house every year or two to follow the openings of new business premises.
I own my own company with a high turnover and profits of £100k+ per year, but for obvious reasons i only pay myself a wage which is closeley matched to my actual spending needs (circa £30k PA).

Obviously calling a finance company and asking for £75k when i "earn" £30k is not gonna work, so can finace be arranged based on my company? if so would the car need to be in the company name?

Also there seem to be tons of options with regards to finance such as balloon payments etc which I do not understand as i have always bought my cars with money i have in the bank, can anyone offer opinions regading the best route to take?

Would it be best to get finance from a ferarri dealer or just a company such as Oracle etc?

Thanks in advance for your replies!

Speak to a proper finance guy (do you have one/use one in your business?). I am not a proper finance guy but similar situation/values etc for my cars. Find a car you like and try talking to the finance guy in the dealership as they are usually incredibly helpful.

What you'll probably find is that you could sell the 997 for £55k to a dealer. Bank £30k for hookers and coke so then offer a £25k deposit against an £80k car and put it through the business so you can use the company's credit rating/history/profit.

Depending on how often you like to swap your cars (I have an expensive habit of changing every 18 months), I would take a 3 year deal with a £25k balloon (the bit you have to pay at the end of the agreement) so you are simply paying back the difference of £30k (purchase minus deposit minus balloon) plus the interest on the finance portion. Ferrari Finance from a dealer are around 9.5% interest APR so you would have payments of around £1k pm.

Not owning your house shouldn't be a problem, I don't own mine.

[900ssduke]

Shmee said:

Anybody who immediately jumps in to say things like "Pay it in cash and live free." either hasn't stopped to work out how using the cash elsewhere can be beneficial and just assumes finance is always a disaster or was silly enough to finance something they couldn't afford and got burned. Building up an even better credit rating when quite young is not bad thing either.

My rationalle here was that with the sale of his porker and minimal drawings from his business he could afford to pay cash, and avoid the finance conversations. Yes, you could probably make a couple of percent on the money if you can find a good finance deal, I guess a great deal more if you have a good going business. Finance on a luxury item such as an f car is not for me. Each to their own. I like to know whats bought and paid for. I appreciate we have a global economy and a recent banking crisis that strongly disagrees with me.

[matc]

elms said:

Give Classic and Sports Finance a call. Ask to speak to Robert, he works these deals all the time and will work it out for you

0845 026 4242

www.classicandsportsfinance.com

Yep, definitely give Rob a call, he sorted out the finance on my 360 and recently on my brothers new Defender. He's very straight talking and will make sure you get a good deal based on your circumstances.

[Rico]

elms said:

Give Classic and Sports Finance a call. Ask to speak to Robert, he works these deals all the time and will work it out for you

0845 026 4242

www.classicandsportsfinance.com

Another vote for Rob

[DSLiverpool]

If your a director of a profitable company the ONLY way to do it is by directors loan to yourself, you can either pay your own company back or take it as a dividend within a couple of years if you time it right. Im surprised no-ones accountant has mentioned this as it was the no brainer answer when I asked about it, however you have to have the money in your biz in the first place.

[Webber3]

DSLiverpool said:

If your a director of a profitable company the ONLY way to do it is by directors loan to yourself, you can either pay your own company back or take it as a dividend within a couple of years if you time it right. Im surprised no-ones accountant has mentioned this as it was the no brainer answer when I asked about it, however you have to have the money in your biz in the first place.

I'm a big fan of the Director's loan, but from what the OP is saying, most of the money for this seems to be tied up in his 997 Turbo.

[DSLiverpool]

Webber3 said:

DSLiverpool said:

If your a director of a profitable company the ONLY way to do it is by directors loan to yourself, you can either pay your own company back or take it as a dividend within a couple of years if you time it right. Im surprised no-ones accountant has mentioned this as it was the no brainer answer when I asked about it, however you have to have the money in your biz in the first place.

I'm a big fan of the Director's loan, but from what the OP is saying, most of the money for this seems to be tied up in his 997 Turbo.

"I own my own company with a high turnover and profits of £100k+ per year",

Nope - classic case of a perfect solution is a directors loan - his company is creaming it and he wants to minimise tax and interest - directors loan IMHO.

OP Maybe look at a new accountant if they didnt tell yu this

Edited by DSLiverpool on Thursday 27th January 04:45

[BrendonJ]

Shmee said:

.. I have a specific contact to talk to and all follow up communication has been brilliant.

Shmee could you let me know who you spoke to please

[Shmee]

BrendonJ said:

Shmee could you let me know who you spoke to please

I can't click into profiles at work, so ping me an e-mail through mine and I'll be able to reply with some info.

[mrbon007]

Thanks for all the very helpful replies, have been so busy this is the first chance I have had to reply.

The standard loan/finance is the only route for me, just don't want to get a crap rate or choose the wrong options on the finance agreement.

The directors loan isn't an option as I reinvest all profits into expansion of the company, the same reasoning applies to the "buy with cash and live free" argument.

I have never financed anything, but at present investing £75k in the business will make me £100k per year profit so you will understand my motives.

That said, driving a shed doesn't appeal to me so what type of APR should I expect?

[russy01]

Surely it would make much more sense to just save for a couple months and put £15-20k cash towards it. You have £55k already tied up in a car which doesnt seem to bother you, so another £20k max shouldnt hurt if you are confident the business is hanging in there.

Anything you will gain by having the cash in the bank will be snapped up by any interest on the money you borrow.

If you feel you really need that cash in the bank, is it the right time to splash £80k on a car.

[JazzyO]

Finance has its place. But you should realise that it costs you money. You can say that "you have better uses for the money elsewhere" but even if you make a high return than your financing costs, you're taking a risk on losing that return. Return = risk, simple as that. As long as you're aware of that, there's nothing wrong with it.

For myself, I bought my first supercar (well, 550 Maranello, perhaps superGT is a better word) on 80% cash. I could buy it fully but I would have had no flexibility left if anything untoward happened. So I financed 20% in 24 months, the privilege of ease of mind cost me about GBP1,500 which I thought was worth it.

Always calculate exactly what financing will cost you, IN TOTAL! Don't fall into the trap of just looking at the monthly payment, that's where the devil sleeps.


Onno