What's a good rate on supercar finance?
Discussion
Hi,
Started looking at financing quite recently (~£100k car, ~£30k deposit with a final balloon payment) and have spoken to a handful of lenders/brokers.
Just wondering what you think a good rate is these days? I had a quote yesterday with a nice-sized balloon on the end but the rate was 8.5%, seems a bit high to me. Can you actually haggle with these guys do you know?
Thanks,
Matt
Started looking at financing quite recently (~£100k car, ~£30k deposit with a final balloon payment) and have spoken to a handful of lenders/brokers.
Just wondering what you think a good rate is these days? I had a quote yesterday with a nice-sized balloon on the end but the rate was 8.5%, seems a bit high to me. Can you actually haggle with these guys do you know?
Thanks,
Matt
biondi said:
turbobloke said:
Doesn't the offer rate depend to a reasonable degree on credit profile matters?
It's still worth looking around as each source of finance will have its own way of looking at things.
Thanks turbobloke - well, I'm not sure, I guess this is what I'm going to find out.It's still worth looking around as each source of finance will have its own way of looking at things.
Welshbeef said:
bogie said:
Got 2.9% last year from my bank last year, so 8.5% seems a bit high
I wasn’t aware banks do unsecured personal loans above c£25k. Punting £100k on a loan unsecured itI took one out ages ago to consolidate some debts.
Natwest gave me one for 26k at 6.9%. Unsecured.
This was several years ago now, however.
Firstly, you have my sympathy for the numerous replies you're likely going to have to endure which have absolutely no bearing on the questions you have asked.
Secondly, ignore any responses where random %APRs are quoted by someone who managed to secure a loan from their bank to buy a packet of crisps. These figures may be unsecured personal loans (entirely different market/limits), possibly less than £25K/not for ~£70k, and certainly not with a balloon and/or are based on securing the loan against their property/re-mortgage. OP:"How much are apples?", PH:"I paid 70p last week for an Orange. HTH". As always, the devil is in the detail.
To directly answer one of your questions - "Can you actually haggle with these guys", yes (see: pencils, below). Although, as with any sales transaction, there will be a point at which they aren't going to be able to go any lower (determined by their funder).
Try to keep the term and vehicle the same when you obtain quotes from brokers so that you can gain a realistic benchmark between them, changing any of the details (term/vehicle - e.g. year/age/etc) may make direct comparison harder. Any quotes at this point in the process are based on the assumption you'll meet whatever criteria their funder's have, which may not be the case for you/your credit profile. Obtaining quotes, based on your specific requirements (term/car/balloon requirement/etc), will also allow you to discount any brokers where their funder(s) are unable to finance the vehicle on those terms (i.e. regardless of the credit worthiness of the receipt).
Always try to compare like with like - I would assume an Unregulated Agreement will likely have a lower %APR than a Regulated Agreement. As will, due to the structure of payments/assuming the same underlying funding cost, a "normal" repayment Hire Purchase agreement compared to one with a balloon (optional i.e. PCP, or not).
Keep in mind that any finance broker is basically a paper-shuffling money salesman, with the (sole?) aim to maximise their profit. You will be surprised at the number who offer to "sharpen their pencils" for subsequent quotes when they become aware that you're intending to fund elsewhere; I assume blunt pencils is an unfortunate problem that blights the finance (or, any) brokerage industry.
If/when you eventually settle on a broker you'll then need to go through the full credit checking/application process, in the event you don't pass you may end up being directed to an alternative funder (quite likely at a higher rate). As a point of reference, I was told (albeit a few years ago) Ferrari Financial Services have whatever rate they're offering and you either meet the criteria for their %APR or they don't fund the vehicle - I don't believe they increase the %APR to reflect their increased risk. That said, no doubt Ferrari dealers are happy to massively load the %APR, over and above the %APR extended by FFS, to further increase their profit. At the time the difference between the first figure originally mentioned by the salesperson (~8%APR) and the figure eventually quoted by FFS (<5%APR), Ferrari being aware at that point funding was already secured elsewhere, made for a not inconsiderable difference in cost over the term.
To benefit future PH readers, and as seemingly never occurs with these threads, would it be possible to provide details on the numbers (vehicle/term/balloon/etc) quoted to you by the various brokers? This will at least provide a realistic understanding of the ~£100k Supercar finance market at this point in time and on the specific vehicle/terms quoted. So as to demonstrate to others the (possibly quite wide) spread between broker quotes and subsequent impact on cost to you over the term.
Secondly, ignore any responses where random %APRs are quoted by someone who managed to secure a loan from their bank to buy a packet of crisps. These figures may be unsecured personal loans (entirely different market/limits), possibly less than £25K/not for ~£70k, and certainly not with a balloon and/or are based on securing the loan against their property/re-mortgage. OP:"How much are apples?", PH:"I paid 70p last week for an Orange. HTH". As always, the devil is in the detail.
To directly answer one of your questions - "Can you actually haggle with these guys", yes (see: pencils, below). Although, as with any sales transaction, there will be a point at which they aren't going to be able to go any lower (determined by their funder).
Try to keep the term and vehicle the same when you obtain quotes from brokers so that you can gain a realistic benchmark between them, changing any of the details (term/vehicle - e.g. year/age/etc) may make direct comparison harder. Any quotes at this point in the process are based on the assumption you'll meet whatever criteria their funder's have, which may not be the case for you/your credit profile. Obtaining quotes, based on your specific requirements (term/car/balloon requirement/etc), will also allow you to discount any brokers where their funder(s) are unable to finance the vehicle on those terms (i.e. regardless of the credit worthiness of the receipt).
Always try to compare like with like - I would assume an Unregulated Agreement will likely have a lower %APR than a Regulated Agreement. As will, due to the structure of payments/assuming the same underlying funding cost, a "normal" repayment Hire Purchase agreement compared to one with a balloon (optional i.e. PCP, or not).
Keep in mind that any finance broker is basically a paper-shuffling money salesman, with the (sole?) aim to maximise their profit. You will be surprised at the number who offer to "sharpen their pencils" for subsequent quotes when they become aware that you're intending to fund elsewhere; I assume blunt pencils is an unfortunate problem that blights the finance (or, any) brokerage industry.
If/when you eventually settle on a broker you'll then need to go through the full credit checking/application process, in the event you don't pass you may end up being directed to an alternative funder (quite likely at a higher rate). As a point of reference, I was told (albeit a few years ago) Ferrari Financial Services have whatever rate they're offering and you either meet the criteria for their %APR or they don't fund the vehicle - I don't believe they increase the %APR to reflect their increased risk. That said, no doubt Ferrari dealers are happy to massively load the %APR, over and above the %APR extended by FFS, to further increase their profit. At the time the difference between the first figure originally mentioned by the salesperson (~8%APR) and the figure eventually quoted by FFS (<5%APR), Ferrari being aware at that point funding was already secured elsewhere, made for a not inconsiderable difference in cost over the term.
To benefit future PH readers, and as seemingly never occurs with these threads, would it be possible to provide details on the numbers (vehicle/term/balloon/etc) quoted to you by the various brokers? This will at least provide a realistic understanding of the ~£100k Supercar finance market at this point in time and on the specific vehicle/terms quoted. So as to demonstrate to others the (possibly quite wide) spread between broker quotes and subsequent impact on cost to you over the term.
Welshbeef said:
bogie said:
Got 2.9% last year from my bank last year, so 8.5% seems a bit high
I wasn’t aware banks do unsecured personal loans above c£25k. Punting £100k on a loan unsecured itit was still cheaper than dealer 9% offer and just a few mouse clicks in online banking, approved and in the dealers bank near instantly....certainly the most efficient car purchase I have done
jw673 - many thanks for your lengthy reply, much appreciated.
To provide an example from last week, and I won't mention the lender as I don't think that's fair considering how quickly things can change. The two variables on my side are the cost of the car (which may be from £100k-£120k) and the deposit, which could be from £25k upwards, depending on how long it takes to find the car and how long it takes to convince my wife I haven't lost my marbles.
The figures I provided to the lender were:
car details: £100k, Gallardo LP-550, MY2011, ~15000 miles
deposit: £25k
Repaypemt period: 48 months
The numbers I got back were £855 a month for 48 months, then a final balloon of £55k.
This was the only quote I've had where the payments were <£1000 a month, due to the higher final balloon I guess. However, the rate I was quoted here was higher than the others.
Thanks,
Matt
To provide an example from last week, and I won't mention the lender as I don't think that's fair considering how quickly things can change. The two variables on my side are the cost of the car (which may be from £100k-£120k) and the deposit, which could be from £25k upwards, depending on how long it takes to find the car and how long it takes to convince my wife I haven't lost my marbles.
The figures I provided to the lender were:
car details: £100k, Gallardo LP-550, MY2011, ~15000 miles
deposit: £25k
Repaypemt period: 48 months
The numbers I got back were £855 a month for 48 months, then a final balloon of £55k.
This was the only quote I've had where the payments were <£1000 a month, due to the higher final balloon I guess. However, the rate I was quoted here was higher than the others.
Thanks,
Matt
biondi said:
The figures I provided to the lender were:
car details: £100k, Gallardo LP-550, MY2011, ~15000 miles
deposit: £25k
Repaypemt period: 48 months
The numbers I got back were £855 a month for 48 months, then a final balloon of £55k.
That does seem like quite a lot, whether you pay the balloon payment or not. car details: £100k, Gallardo LP-550, MY2011, ~15000 miles
deposit: £25k
Repaypemt period: 48 months
The numbers I got back were £855 a month for 48 months, then a final balloon of £55k.
I know that this isn't what you asked, but...
Are you wedded to the brand? An R8 V10 Plus is not a million miles away from the LP-550, and you'll get mint one a couple of years younger and with the same mileage for about seventy thousand.
biondi said:
car details: £100k, Gallardo LP-550 MY2011, ~15000 miles
Nice car! RWD manual Lambo dedicated to Balboni. Fancied one a lot when it came out but chickened out and went Ferrari instead. Surprised it hasn't become a collectible already but by the time you've paid it off hopefully it will have.
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