If you buy a car on finance you can not afford it?
Discussion
The truth hurts but lets hear it from a professional advisor?
https://www.youtube.com/watch?v=16gj90BJG-0
Ta
https://www.youtube.com/watch?v=16gj90BJG-0
Ta
Am I being stupid or in the Golf GTE example - VWFS PCP vs Darren's finance the saving of £2,000 he mentions would that not have come from the higher final payment right?
I'm assuming the £2,000 saving would translate to the GFV / Optional Final Payment being £2000 higher with Darren than what VWFS quoted meaning the total amount of the monthly payments would be less than with VWFS. Fine if you plan to hand back at the end but not so good if you plan to buy or PX. I'm also assuming that its a non-guaranteed final value - I wonder what happens if the car is worth less than the final payment and it's not guaranteed?
In the example where the car cost £91,000 I worked it out at roughly 14%. Pretty high!
I'm assuming the £2,000 saving would translate to the GFV / Optional Final Payment being £2000 higher with Darren than what VWFS quoted meaning the total amount of the monthly payments would be less than with VWFS. Fine if you plan to hand back at the end but not so good if you plan to buy or PX. I'm also assuming that its a non-guaranteed final value - I wonder what happens if the car is worth less than the final payment and it's not guaranteed?
In the example where the car cost £91,000 I worked it out at roughly 14%. Pretty high!
Edited by ashleyman on Sunday 16th December 22:35
What a load of tosh.
You buy the use of the vehicle for the lowest cost option. Sure there are some who will never see it that way and like the cash buy (yet have a mortgage and still oddly think they “own the car”).
You may choose not to finance a car for other reasons - such as going for a mortgage /re mortgage as that commitment will impact affordability calculations.
It might also be an issue for divorces
You buy the use of the vehicle for the lowest cost option. Sure there are some who will never see it that way and like the cash buy (yet have a mortgage and still oddly think they “own the car”).
You may choose not to finance a car for other reasons - such as going for a mortgage /re mortgage as that commitment will impact affordability calculations.
It might also be an issue for divorces
fellows4 said:
ashleyman said:
Am I being stupid or in the Golf GTE example - VWFS PCP vs Darren's finance the saving of £2,000 he mentions would that not have come from the higher final payment right?
I'm assuming the £2,000 saving would translate to the GFV / Optional Final Payment being £2000 higher than what VWFS quoted. Fine if you plan to hand back at the end but not so good if you plan to buy or PX. I'm also assuming that its a non-guaranteed final value - I wonder what happens if the car is worth less than the final payment and it's not guaranteed?
It's also possible that Darren can offer a much lower APR than VWFS.I'm assuming the £2,000 saving would translate to the GFV / Optional Final Payment being £2000 higher than what VWFS quoted. Fine if you plan to hand back at the end but not so good if you plan to buy or PX. I'm also assuming that its a non-guaranteed final value - I wonder what happens if the car is worth less than the final payment and it's not guaranteed?
If we suppose a Golf GTE is £30,000, customer deposit is £3000, dealer contribution is £1500 the customer is borrowing £25,500 which at 4.9% over 48 months is a lot of interest. Remember with PCP the customer is not just borrowing the difference between the cash price after discounts/deposits and the GFV but infact the full amount after discounts/deposit regardless of what the GFV is.
I'm assuming that red top guy would be looking at the agreement from VWFS, seeing his deposit of £3000 = monthly payments of £400, whereas with Darren his deposit is £3000 and his monthly payments are £300 therefore 'cheaper' over the term because he's physically handing over less money so long as he 1. doesn't buy the car at the end or hands it back or 2. manages to sell the car to cover the final payment.
So lets say VWFS guarantee the GTE would be worth £9000 after say 3 years and Darren said its going to be worth £11000 after 3 years.
With VWFS, red top guy has 3 options, hand it back and walk away, PX for a new contract car or pay the balance and keep the car.
I wonder what would happen at the end of red tops deal if the final payment Darren has quoted is more than what the car is worth at the time and what options red top guy has and what the penalty if any would be for going non-guaranteed value.
I guess if red top guy wanted a guaranteed final value it would end up costing him more for the safety.
J4CKO said:
Its just a choice, for a couple of years, do it if you can afford it, see how it pans out and then adapt.
That can't be a good idea - surely most of those finance options require people to sign up for 2, or more usually 3, years.What happens if you get made redundant, or get a new job that means you'll go way over the mileage limit?
Those sort of deals don't usually have much flexibility in them.
Just buy a car - and if you can't do that then you can't afford it!
I'd like to know how people are buying supercars on finance then making money on them when they appreciate so quickly when built?
Because surely people HPI check them and it says "THIS VEHICLE HAS FINANCE" ???
Sure they can just buy it in cash but...all these young youtubers with 1-6 brand new supercars on order which they then sell for a profit, I don't see them paying 6x£100k-£500k in cash, do you?
Because surely people HPI check them and it says "THIS VEHICLE HAS FINANCE" ???
Sure they can just buy it in cash but...all these young youtubers with 1-6 brand new supercars on order which they then sell for a profit, I don't see them paying 6x£100k-£500k in cash, do you?
Depends what you mean by afford. If the question is do the majority of people buying a £30k new car have £30k washing around in the bank then the answer is no. If the question is can most people who get finance afford to service the debt then the answer is yes. It's a cash flow issue for most people. They could drive a banger for 5 or 6 years and have enough put by to purchase a shiny new car in cash.
My own approach to car buying is to get the most out of the 2nd hand market for boring vanilla family cars and spend the money saved on more interesting vehicles. Spending 30k on a new diesel Tiguan is insane, spending 30k on a Lotus Exige is completely sensible....
My own approach to car buying is to get the most out of the 2nd hand market for boring vanilla family cars and spend the money saved on more interesting vehicles. Spending 30k on a new diesel Tiguan is insane, spending 30k on a Lotus Exige is completely sensible....
I suppose it's dependent. If you finance a car, you can't afford it..............at that particular moment.
That said, if you had £30k aside would you drop the lot on a car or would you finance it and pay that off until you own the car? That's what I would do but that is a bit outgoing in a monthly basis.
If an amount of money is disposable to you, say £200 a month and for that you can drive around in car that is £25k then knock yourself out. My neighbours just bought a Toyota hybrid thing and it was about £150 a month, it's a lot of car for not much money so I get it.
By contrast though, there are people driving around in £30-40k+ cars who realistically can't afford it, they can cover a monthly payment but the chances of them ever owning one of those cars is minimal. I've got friends who have done it, can only earn X amount a month so are at the mercy of the finance company really. I have also known people finance cars get to the balloon payment, not be able to pay it, don't want to finance it so have sold up and ended up in an old banger.
It's very much down to personal circumstances and how you choose to finance your car. I suspect despite this being PH and everyone being directors etc etc. few on here have tens of thousands to spend on a car in one hit.
That said, if you had £30k aside would you drop the lot on a car or would you finance it and pay that off until you own the car? That's what I would do but that is a bit outgoing in a monthly basis.
If an amount of money is disposable to you, say £200 a month and for that you can drive around in car that is £25k then knock yourself out. My neighbours just bought a Toyota hybrid thing and it was about £150 a month, it's a lot of car for not much money so I get it.
By contrast though, there are people driving around in £30-40k+ cars who realistically can't afford it, they can cover a monthly payment but the chances of them ever owning one of those cars is minimal. I've got friends who have done it, can only earn X amount a month so are at the mercy of the finance company really. I have also known people finance cars get to the balloon payment, not be able to pay it, don't want to finance it so have sold up and ended up in an old banger.
It's very much down to personal circumstances and how you choose to finance your car. I suspect despite this being PH and everyone being directors etc etc. few on here have tens of thousands to spend on a car in one hit.
The way it is .....
Lease/PCP is paying out the depreciation you'd suffer yourself (by buying the car, owning it then selling it) in cash monthly rather than one big hit at the end of ownership.
Whether its better or not depends on what car it is and what deal you got. I've got my wifes car on a 5k a year PCP and its way cheaper than buying the car then selling it at the end, this is the third cycle of this as we tend to get a great deal for whatever reason.
My daily does 30k a year and would be financial suicide to lease or PCP, so that doesn't work there and I buy the car, run it then sell it. I dont think that makes me a different kind of person to my wife, we both just run the cars we want in the most financially sensible way.
Some cars are cheaper to PCP/lease for 3 years than to own depending on model and mileage, some are cheaper to own.
Anyone judging other people solely on the financial method they use to own their cars is an idiot
Lease/PCP is paying out the depreciation you'd suffer yourself (by buying the car, owning it then selling it) in cash monthly rather than one big hit at the end of ownership.
Whether its better or not depends on what car it is and what deal you got. I've got my wifes car on a 5k a year PCP and its way cheaper than buying the car then selling it at the end, this is the third cycle of this as we tend to get a great deal for whatever reason.
My daily does 30k a year and would be financial suicide to lease or PCP, so that doesn't work there and I buy the car, run it then sell it. I dont think that makes me a different kind of person to my wife, we both just run the cars we want in the most financially sensible way.
Some cars are cheaper to PCP/lease for 3 years than to own depending on model and mileage, some are cheaper to own.
Anyone judging other people solely on the financial method they use to own their cars is an idiot
rockin said:
Alex_225 said:
My neighbours just bought a Toyota hybrid thing and it was about £150 a month,
No really, they didn't. No one's gonna sell you a new car for £5,400 over 3 years.........or are they??
One of these things anyway - https://www.ukcarline.co.uk/car-leasing/toyota/c-h...
Edited by Alex_225 on Monday 17th December 10:47
I still remember a post that was linked to on here from another forum of some lad that was about 19/20 on apprenticeship wages buying a £3000 clio on finance and it working out costing him over £6000 in total. the car was a lemon and the spec of car he bought didn't come with the alloys that were standard but some awful steelies. everyone felt sorry for him.
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