What's a good rate on supercar finance?
Discussion
Its realistic to get it under 6%APR - be upfront with the brokers. Oracle were brilliant with me - especially on help sourcing a big ticket car at a good price which was a big bonus. I did HP not PCP but switched that to two loans at less than half the interest rate after 6 months - and it was then also MY precious not theirs!
Beware of the flattery of 'high nett worth' schemes - I read the smallprint and ran an unregulated mile!
Where do you get your next £30k deposit after 48 months for your next car? I always think if you have a PCP you shouldn't have much savings - why pay interest on the balloon if you can wipe it out?
Good luck - but do it - life is short
Beware of the flattery of 'high nett worth' schemes - I read the smallprint and ran an unregulated mile!
Where do you get your next £30k deposit after 48 months for your next car? I always think if you have a PCP you shouldn't have much savings - why pay interest on the balloon if you can wipe it out?
Good luck - but do it - life is short
I'm a bit late to this thread - but as this is the business I'm in I thought I'd just pass on some more info.
JBR have a bit of a niche in the supercar business where they are happy to offer considerably higher balloon payments than most of the normal lenders - however, they'll only offer the high balloons on an unregulated basis and they expect a slightly better rate of return as well, fair enough.
Points to note on an unregulated vs regulated deal:
Early settlements will be more expensive as the finance companies to not have to adhere to set settlement calculations under an unregulated agreement. JBR are actually one of the better companies and they will advise their early settlement formula - from memory it's around 3% higher than a regulated settlement figure - but finance companies don't have to provide any rebate if they don't want to (although that's very uncommon.)
You also don't have the flexibility to pay off additional lump sums during the agreement as you do on a regulated deal.
You bear the risk of the vehicle's value against the final balloon payment (as you do on any hire purchase agreement with balloon, other than a PCP.)
JBR will fit one of their own trackers to the vehicles - they aren't of use to your insurance company sadly.
To qualify for an unregulated agreement you'll need to either be a high net worth individual (net income of £150k+ per year or assets not including current property of £500k+), or insure your vehicle for class 1 business use (business mileage opt-out). Or write the agreement in a limited company.
If you're planning on keeping the vehicle for a long time then there's nothing fundamentally wrong with an unregulated agreement. The benefit of the higher balloon payments that JBR offer does give significantly lower monthly repayments - but be aware you'll pay more interest overall and it's not as cost effective if you want / need to settle early.
They are a decent company to deal with. We write a handful of deals a month with them which all tend to be along the lines of the above (longer terms and high balloons with low monthly payments).
JBR have a bit of a niche in the supercar business where they are happy to offer considerably higher balloon payments than most of the normal lenders - however, they'll only offer the high balloons on an unregulated basis and they expect a slightly better rate of return as well, fair enough.
Points to note on an unregulated vs regulated deal:
Early settlements will be more expensive as the finance companies to not have to adhere to set settlement calculations under an unregulated agreement. JBR are actually one of the better companies and they will advise their early settlement formula - from memory it's around 3% higher than a regulated settlement figure - but finance companies don't have to provide any rebate if they don't want to (although that's very uncommon.)
You also don't have the flexibility to pay off additional lump sums during the agreement as you do on a regulated deal.
You bear the risk of the vehicle's value against the final balloon payment (as you do on any hire purchase agreement with balloon, other than a PCP.)
JBR will fit one of their own trackers to the vehicles - they aren't of use to your insurance company sadly.
To qualify for an unregulated agreement you'll need to either be a high net worth individual (net income of £150k+ per year or assets not including current property of £500k+), or insure your vehicle for class 1 business use (business mileage opt-out). Or write the agreement in a limited company.
If you're planning on keeping the vehicle for a long time then there's nothing fundamentally wrong with an unregulated agreement. The benefit of the higher balloon payments that JBR offer does give significantly lower monthly repayments - but be aware you'll pay more interest overall and it's not as cost effective if you want / need to settle early.
They are a decent company to deal with. We write a handful of deals a month with them which all tend to be along the lines of the above (longer terms and high balloons with low monthly payments).
rfoster said:
I'm a bit late to this thread - but as this is the business I'm in I thought I'd just pass on some more info.
JBR have a bit of a niche in the supercar business where they are happy to offer considerably higher balloon payments than most of the normal lenders - however, they'll only offer the high balloons on an unregulated basis and they expect a slightly better rate of return as well, fair enough.
Points to note on an unregulated vs regulated deal:
Early settlements will be more expensive as the finance companies to not have to adhere to set settlement calculations under an unregulated agreement. JBR are actually one of the better companies and they will advise their early settlement formula - from memory it's around 3% higher than a regulated settlement figure - but finance companies don't have to provide any rebate if they don't want to (although that's very uncommon.)
You also don't have the flexibility to pay off additional lump sums during the agreement as you do on a regulated deal.
You bear the risk of the vehicle's value against the final balloon payment (as you do on any hire purchase agreement with balloon, other than a PCP.)
JBR will fit one of their own trackers to the vehicles - they aren't of use to your insurance company sadly.
To qualify for an unregulated agreement you'll need to either be a high net worth individual (net income of £150k+ per year or assets not including current property of £500k+), or insure your vehicle for class 1 business use (business mileage opt-out). Or write the agreement in a limited company.
If you're planning on keeping the vehicle for a long time then there's nothing fundamentally wrong with an unregulated agreement. The benefit of the higher balloon payments that JBR offer does give significantly lower monthly repayments - but be aware you'll pay more interest overall and it's not as cost effective if you want / need to settle early.
They are a decent company to deal with. We write a handful of deals a month with them which all tend to be along the lines of the above (longer terms and high balloons with low monthly payments).
Thank you very much, really useful info there.JBR have a bit of a niche in the supercar business where they are happy to offer considerably higher balloon payments than most of the normal lenders - however, they'll only offer the high balloons on an unregulated basis and they expect a slightly better rate of return as well, fair enough.
Points to note on an unregulated vs regulated deal:
Early settlements will be more expensive as the finance companies to not have to adhere to set settlement calculations under an unregulated agreement. JBR are actually one of the better companies and they will advise their early settlement formula - from memory it's around 3% higher than a regulated settlement figure - but finance companies don't have to provide any rebate if they don't want to (although that's very uncommon.)
You also don't have the flexibility to pay off additional lump sums during the agreement as you do on a regulated deal.
You bear the risk of the vehicle's value against the final balloon payment (as you do on any hire purchase agreement with balloon, other than a PCP.)
JBR will fit one of their own trackers to the vehicles - they aren't of use to your insurance company sadly.
To qualify for an unregulated agreement you'll need to either be a high net worth individual (net income of £150k+ per year or assets not including current property of £500k+), or insure your vehicle for class 1 business use (business mileage opt-out). Or write the agreement in a limited company.
If you're planning on keeping the vehicle for a long time then there's nothing fundamentally wrong with an unregulated agreement. The benefit of the higher balloon payments that JBR offer does give significantly lower monthly repayments - but be aware you'll pay more interest overall and it's not as cost effective if you want / need to settle early.
They are a decent company to deal with. We write a handful of deals a month with them which all tend to be along the lines of the above (longer terms and high balloons with low monthly payments).
I think the likes of JBR with the higher balloons are ideal for people who could cover the balloon / shortfall in the cars value should the worst happen, but want to keep cash in investments / business etc.
If used on the right sort of vehicle, something "blue chip" that should not depreciate heavily, then it can make sense.
Something like a 458 / Gallardo etc...
trowelhead said:
could cover the balloon / shortfall in the cars value should the worst happen, but want to keep cash in investments / business etc.
Is this even a realistic situation? I wish we could genuinely see how many people claim this to be their circumstance, when in reality they're stretching themselves as thin as possible, on a never ending line of credit, to give an illusion of wealth.
I sincerely believe this is a PH-specific position that some claim to be in.
TheLordJohn said:
trowelhead said:
could cover the balloon / shortfall in the cars value should the worst happen, but want to keep cash in investments / business etc.
Is this even a realistic situation? I wish we could genuinely see how many people claim this to be their circumstance, when in reality they're stretching themselves as thin as possible, on a never ending line of credit, to give an illusion of wealth.
I sincerely believe this is a PH-specific position that some claim to be in.
Plenty of business owners with cash in the business, would make no sense to take dividend and pay the tax on that vs finance at 4%
moonigan said:
If the car is bought through the business does it not then incur BIK costs?
How many times have I looked into this and leasing etc... Accountant always concludes that its best I buy the totally works only car myself and charge the business mileage. 14,000 miles pa gives about £6k which matches the annual loan payment and gives evens on a £24k car over 4 years and me an asset at the end. All a bit 'calcs on back of fag packet' sorry and just wondered if I pay tax on that £6k 'income'? Time to look at it all again I guess!sidicks said:
biondi said:
Yeah, it's going to take a bit of research from my side. I do have investments so could pay a sizeable lump using some of this, but the cost of the finance is less than the money I'm making with the investments, so in my rather simple head it doesn't make sense to do that.
I'm under no illusion I'm going to be financially worse-off after this but as I said earlier, money isn't everything. I'm 46 and right now I'm healthy, happy and have some money left over each month - so why not, in a few years I might not be able to.
I've spoken to a few brokers and lenders this morning, 8-8.5% seems to be the going rate for something like this, which is a bit dissappointing as I was hoping it would be less. I'll continue to talk to people, it's interesting that most of the brokers tell me I'll most likely end up using the same company (jbr) anyway.There offer has been the best so far but that was unregulated I believe so need to understand the risks of that a bit more.
In theory that’s correct, but you should really be comparing the risk-adjusted return on your investments, as presumably anything you’ve bought that has ‘high’ returns is somewhat risky and not guaranteed?!I'm under no illusion I'm going to be financially worse-off after this but as I said earlier, money isn't everything. I'm 46 and right now I'm healthy, happy and have some money left over each month - so why not, in a few years I might not be able to.
I've spoken to a few brokers and lenders this morning, 8-8.5% seems to be the going rate for something like this, which is a bit dissappointing as I was hoping it would be less. I'll continue to talk to people, it's interesting that most of the brokers tell me I'll most likely end up using the same company (jbr) anyway.There offer has been the best so far but that was unregulated I believe so need to understand the risks of that a bit more.
Ken Figenus said:
How many times have I looked into this and leasing etc... Accountant always concludes that its best I buy the totally works only car myself and charge the business mileage. 14,000 miles pa gives about £6k which matches the annual loan payment and gives evens on a £24k car over 4 years and me an asset at the end. All a bit 'calcs on back of fag packet' sorry and just wondered if I pay tax on that £6k 'income'? Time to look at it all again I guess!
You can claim 10K miles PA at .45p and then .25p per mile after that without paying tax on the income so you would only pay tax on everything over £5500 using your 14K PA. I think that's correct. Don't see the benefit of having a dedicated works car though unless your main car isn't suitable for what you do.Really curious if its possible to purchase through the company and not incur BIK penalty??
moonigan said:
trowelhead said:
Absolutely.
Plenty of business owners with cash in the business, would make no sense to take dividend and pay the tax on that vs finance at 4%
If the car is bought through the business does it not then incur BIK costs? Plenty of business owners with cash in the business, would make no sense to take dividend and pay the tax on that vs finance at 4%
John Smith the IT contractor makes £150k pa, and has £100k sitting in his ltd co business account. He draws £50k a year salary/dividends so always has plenty of cash left in the business account.
He could take that £100k as a dividend/salary to buy his dream car (personally, not in the business), but this would trigger a massive tax bill, circa 30-50% of the amount drawn.
Or he could keep his cash in the company, finance the car at 4% APR, and use those funds to buy a property (inside an SPV ltd co) for example with a higher yield than the cost of borrowing. Or open a ltd company S&S account, or invest in P2P lending as a company etc etc etc
Doing this, he avoids a big tax liability, and also buys an asset that yields more than the payments on the car.
PLUS - doing this, John remains very liquid. He does not have all his cash tied up in a car. If he sees an opportunity to expand his business, or a fire sale on some asset or other, he can act on that.
moonigan said:
You can claim 10K miles PA at .45p and then .25p per mile after that without paying tax on the income so you would only pay tax on everything over £5500 using your 14K PA. I think that's correct. Don't see the benefit of having a dedicated works car though unless your main car isn't suitable for what you do.
Really curious if its possible to purchase through the company and not incur BIK penalty??
Only if it is only ever used for business related journeys. Really curious if its possible to purchase through the company and not incur BIK penalty??
No commuting, no pleasure drives, business only and your records have to be very comprehensive.
I would also imagine HMRC have seen every attempt in the book at trying to avoid tax, and will take a very hard look at someone claiming that a supercar is for business purposes only.
I’m going to say it pretty much can’t be done, unless it’s a business asset and is earning money as such. Even so, personal use would immediately incur BIK
Super Slo Mo said:
Only if it is only ever used for business related journeys.
No commuting, no pleasure drives, business only and your records have to be very comprehensive.
I would also imagine HMRC have seen every attempt in the book at trying to avoid tax, and will take a very hard look at someone claiming that a supercar is for business purposes only.
I’m going to say it pretty much can’t be done, unless it’s a business asset and is earning money as such. Even so, personal use would immediately incur BIK
I believe they take it to extremes such as keys not being available out of working hours.No commuting, no pleasure drives, business only and your records have to be very comprehensive.
I would also imagine HMRC have seen every attempt in the book at trying to avoid tax, and will take a very hard look at someone claiming that a supercar is for business purposes only.
I’m going to say it pretty much can’t be done, unless it’s a business asset and is earning money as such. Even so, personal use would immediately incur BIK
Super Slo Mo said:
Only if it is only ever used for business related journeys.
No commuting, no pleasure drives, business only and your records have to be very comprehensive.
I would also imagine HMRC have seen every attempt in the book at trying to avoid tax, and will take a very hard look at someone claiming that a supercar is for business purposes only.
I’m going to say it pretty much can’t be done, unless it’s a business asset and is earning money as such. Even so, personal use would immediately incur BIK
Yep - its the dedicated work estate kit lugger. We are lucky/have worked hard ( No commuting, no pleasure drives, business only and your records have to be very comprehensive.
I would also imagine HMRC have seen every attempt in the book at trying to avoid tax, and will take a very hard look at someone claiming that a supercar is for business purposes only.
I’m going to say it pretty much can’t be done, unless it’s a business asset and is earning money as such. Even so, personal use would immediately incur BIK
) to have 2 other cars that I far prefer to drive outside of business hours - and that 'business only' clause justifies them even more To the guy questioning why people would use finance; the answer is simple. Liquidity and personality.
I can't decide whether I want to buy my next car outright or via a loan or another lease.
I like the idea of owning my car outright but I also like having as great an amount of liquidity as possible. I think I would rather suffer low interest rates on that liquidity and interest on a loan in order to preserve its immediate availability.
The reason is that I am always on the lookout for ways to expand my business further...expansions that require cash...the few times I haven't had liquidity available has always resulted in missing out on opportunities that I would otherwise have taken.
I also have an irrational fear of everything going tits up and will need the money to start over/run away to Belize.
I can't decide whether I want to buy my next car outright or via a loan or another lease.
I like the idea of owning my car outright but I also like having as great an amount of liquidity as possible. I think I would rather suffer low interest rates on that liquidity and interest on a loan in order to preserve its immediate availability.
The reason is that I am always on the lookout for ways to expand my business further...expansions that require cash...the few times I haven't had liquidity available has always resulted in missing out on opportunities that I would otherwise have taken.
I also have an irrational fear of everything going tits up and will need the money to start over/run away to Belize.
Taaaaang said:
To the guy questioning why people would use finance; the answer is simple. Liquidity and personality.
I can't decide whether I want to buy my next car outright or via a loan or another lease.
I like the idea of owning my car outright but I also like having as great an amount of liquidity as possible. I think I would rather suffer low interest rates on that liquidity and interest on a loan in order to preserve its immediate availability.
The reason is that I am always on the lookout for ways to expand my business further...expansions that require cash...the few times I haven't had liquidity available has always resulted in missing out on opportunities that I would otherwise have taken.
I also have an irrational fear of everything going tits up and will need the money to start over/run away to Belize.
Completely agree. If you are running a business it would be madness throwing lumps of cash into a car or even paying down a mortgage in some cases, you need the liquidity far more.I can't decide whether I want to buy my next car outright or via a loan or another lease.
I like the idea of owning my car outright but I also like having as great an amount of liquidity as possible. I think I would rather suffer low interest rates on that liquidity and interest on a loan in order to preserve its immediate availability.
The reason is that I am always on the lookout for ways to expand my business further...expansions that require cash...the few times I haven't had liquidity available has always resulted in missing out on opportunities that I would otherwise have taken.
I also have an irrational fear of everything going tits up and will need the money to start over/run away to Belize.
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