Advice on financing 997 PDK Turbo / Turbo S from OPC
Discussion
WDISMYL said:
I would also like some of that 5% guaranteed return for a cash investment please! And it doesn't count if you are talking about Banks trying to get you to open an account but capping the 5% on £2000 etc!
So please spill the beans - where can I get some?
However there is a real misnomer that I see repeated over and over from people who take out finance - their argument is "why would I sink cash in a depreciating asset - I'll keep my cash and finance instead". But you have sunk cash into a depreciating asset and I don't just mean your deposit. You have to include the borrowed money too - and on top of that you are paying someone else the privilege of doing so. It's an illusion to think otherwise. The psychology of paying monthly payments just tricks your brain into thinking that you are avoiding doing so. You haven't. With finance you get interest + depreciation.
I understand the argument of having cash as a backstop for emergencies and by financing it gives you some flexibility. That does have value. However its getting the balance right.
The problem is people with say £50k in the bank, don't keep £40k and use £10k as a deposit to buy a £30k car, borrowing just 20k. In this case they would still have twice the amount in cash of the amount borrowed. If they needed to pay back the loan they could.
Instead people tend to put £35k as a deposit to buy a car worth £135k, borrowing 100k. Yes they have £15k of cash but have leveraged twice the value of their original bank balance into a DEPRECIATING asset. That's just foolish and a way to stay poor forever.
Firstly, why doesn't that count as that's a guaranteed 5% on a cash investment & secondly it wasn't what i was referring to but i'm also not talking about 10's of thousands of ££'s in these accounts.So please spill the beans - where can I get some?
However there is a real misnomer that I see repeated over and over from people who take out finance - their argument is "why would I sink cash in a depreciating asset - I'll keep my cash and finance instead". But you have sunk cash into a depreciating asset and I don't just mean your deposit. You have to include the borrowed money too - and on top of that you are paying someone else the privilege of doing so. It's an illusion to think otherwise. The psychology of paying monthly payments just tricks your brain into thinking that you are avoiding doing so. You haven't. With finance you get interest + depreciation.
I understand the argument of having cash as a backstop for emergencies and by financing it gives you some flexibility. That does have value. However its getting the balance right.
The problem is people with say £50k in the bank, don't keep £40k and use £10k as a deposit to buy a £30k car, borrowing just 20k. In this case they would still have twice the amount in cash of the amount borrowed. If they needed to pay back the loan they could.
Instead people tend to put £35k as a deposit to buy a car worth £135k, borrowing 100k. Yes they have £15k of cash but have leveraged twice the value of their original bank balance into a DEPRECIATING asset. That's just foolish and a way to stay poor forever.
Edited by WDISMYL on Wednesday 22 February 19:37
Your opinion is it's a misnomer when it fact it is just that, you're opinion, likewise my choice is based on my opinion & yet FOR ME it's proven in the main to save me money & provide real benefit. How/what i perceive as being a benefit is of course personal to me, but i'll say again for the last time as even i'm getting bored, don't discount the raft of offered funding methods on cars over paying cash as that would indeed be foolish as 'some' of these funding options can in fact make financial sense & offer savings for many & has been the case with my current car, my previous car & highly likely my incoming car.
As a final example to further demonstrate the cash is king sentiment as being false in many cases, my wife acquired a new Volvo XC60 last Autumn (not very PH i know) & that like my FFRR was offered with a sizeable deposit contribution if Volvo's PCP was used, on top of that if their PCP was taken you got a free Service pack worth i think £500 & if you could stump up a 50% deposit then the real kicker was the PCP was Interest Free. Now i'd challenge anyone to tell me how that wasn't a sensible choice & that paying the entire purchase price in cash would have been better? She now has some of the cash she would have had to pay last Autumn sat in one of these 5% accounts, a bit extra in her pension & a few grand invested from which she'll pay the balloon off in 18mths.
Edited by W8PMC on Wednesday 22 February 20:47
+1 to the above.
It's really all about balance, isn't it? Like a lot of things in life! I know a few friends who finance a nice car, either on PCP or CH. They also put a good chunk of cash into their pensions every year, don't have a mortgage, also own a buy-to-let property or two. I've done it myself. We're not rich, but we're also a very long way from poor, too. Of course, no one's saying that stretching yourself and blowing all your spare cash on a beautiful car is a good idea. It's madness, in fact. But I suspect that's not the case with the OP or indeed many others on this thread.
It's really all about balance, isn't it? Like a lot of things in life! I know a few friends who finance a nice car, either on PCP or CH. They also put a good chunk of cash into their pensions every year, don't have a mortgage, also own a buy-to-let property or two. I've done it myself. We're not rich, but we're also a very long way from poor, too. Of course, no one's saying that stretching yourself and blowing all your spare cash on a beautiful car is a good idea. It's madness, in fact. But I suspect that's not the case with the OP or indeed many others on this thread.
SL550M said:
Of course, no one's saying that stretching yourself and blowing all your spare cash on a beautiful car is a good idea. It's madness, in fact.
True, it is mad, but we're here for a good time, not a long time. If someone's happy living in a 3 bed semi, eating ketchup butties for tea, because they have a fun car in the garage to enjoy - it's their 'thing' - then who among us can judge them?When I'm not enjoying my car, I do a fair bit of mountain biking. Among some of the younger riders I know it is very, very common for them to arrive at trails with their bikes carried on a car that's worth a fraction of what their bike is. It's all about priorities.
sasha320 said:
Actually, the Lloyds product is
- A great fixed rate of 4.6% APR Representative when you borrow between £7,500 and £60,000.
- Borrow between £3,000 and £60,000.
- Repayment term from 1 to 4 years.
- No early repayment fees.
- Majority of dealers covered.
- Return the car or pay a lump sum to own the car at the end of your term.
Only available to Lloyds current account holders :0(
Does this allow you to sell the car and recoup some of your deposit provided you're in positive equity? Just returning the car at the end would be madness if it's worth more than the baloon.- A great fixed rate of 4.6% APR Representative when you borrow between £7,500 and £60,000.
- Borrow between £3,000 and £60,000.
- Repayment term from 1 to 4 years.
- No early repayment fees.
- Majority of dealers covered.
- Return the car or pay a lump sum to own the car at the end of your term.
Only available to Lloyds current account holders :0(
Edited by Mikearwas on Friday 24th February 13:17
Mikearwas said:
Does this allow you to sell the car and recoup some of your deposit provided you're in positive equity? Just returning the car at the end would be madness if it's worth more than the baloon.
Yes as far as i know.Edited by Mikearwas on Friday 24th February 13:17
It is in essence a PCP product but the future value is i don't believe guaranteed & with no Mfctr input is set well below what you'd expect the car to be worth. I guess you could return the car to Lloyds at the end of the term, but as you say that's not an advisable move.
For reference, the car i based my Lloyds facility on was an Audi SQ7 costing £80k & a £20k deposit so borrowing £60k. The Future value from Lloyds after i think it was 36mths & 10k miles pa was about £29k but the GFV from Audi came out in the mid £30's, so quite a difference & being Audi's was a GFV you'd expect the car to actually be worth say around £39-40k at the end of the agreement as Audi are not going to give money away.
Here's a new (to me) perspective.
I have spent £331k (cash, no finance) on cars in the last 15.5 years.
I have changed cars on average every 2 years and have been buying cars that are 500bhp (or equiv bhp/tonne) and cost ~£90k when new.
I have been picking them up when they were 4 to 5 years old. In some cases I've had to spend a little on third party Warranties or had the tail end of the manufacturer's new car warranty or manufacturer's approved used warranty.
I have £40k equity in the car that I currently own. If I deduct that equity from the total outlay over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
I exclude maintenance, consumables and insurance and I would like to think that I have bought reasonably sensibly and never been ripped off. That said, let's not imagine that all of the £1,600 was on pure depreciation of metal!
Anyway, going forward I believe that I can get in and out of BRAND NEW £90k cars every two years for exactly the same cost, by using PCP.
A £90k car on a PCP is circa £1,000 per month which when used on a 12 + 24 PCP deal equates to the £1,600 per month I have been spending over the 15.5 years.
Assuming my buying behaviour over the last 15.5 years were to continue, then I would be no worse off in terms of cash outlay if I went down the PCP route for the next say 15 years, except I would get the same or similar cars that I have previously owned, this time brand new with a warranty and potentially with lower maintenance and consumables costs (as only minor servicing is needed in the 24 months).
Clearly the biggest 'variable' is whether I have enjoyed value for money over the 15.5 years with my traditional buying approach, but assuming I cannot move to accessing better cars for the same money or the same cars for less money then I might switch to PCP for the next 15.5 years.
Thoughts welcome!
I have spent £331k (cash, no finance) on cars in the last 15.5 years.
I have changed cars on average every 2 years and have been buying cars that are 500bhp (or equiv bhp/tonne) and cost ~£90k when new.
I have been picking them up when they were 4 to 5 years old. In some cases I've had to spend a little on third party Warranties or had the tail end of the manufacturer's new car warranty or manufacturer's approved used warranty.
I have £40k equity in the car that I currently own. If I deduct that equity from the total outlay over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
I exclude maintenance, consumables and insurance and I would like to think that I have bought reasonably sensibly and never been ripped off. That said, let's not imagine that all of the £1,600 was on pure depreciation of metal!
Anyway, going forward I believe that I can get in and out of BRAND NEW £90k cars every two years for exactly the same cost, by using PCP.
A £90k car on a PCP is circa £1,000 per month which when used on a 12 + 24 PCP deal equates to the £1,600 per month I have been spending over the 15.5 years.
Assuming my buying behaviour over the last 15.5 years were to continue, then I would be no worse off in terms of cash outlay if I went down the PCP route for the next say 15 years, except I would get the same or similar cars that I have previously owned, this time brand new with a warranty and potentially with lower maintenance and consumables costs (as only minor servicing is needed in the 24 months).
Clearly the biggest 'variable' is whether I have enjoyed value for money over the 15.5 years with my traditional buying approach, but assuming I cannot move to accessing better cars for the same money or the same cars for less money then I might switch to PCP for the next 15.5 years.
Thoughts welcome!
Edited by sasha320 on Wednesday 19th July 07:33
sasha320 said:
Here's a new (to me) perspective.
I have spent £331k (cash, no finance) on cars in the last 15.5 years.
I have changed cars on average every 2 years and have been buying cars that are 500bhp (or equiv bhp/tonne) and cost ~£90k when new.
I have been picking them up when they were 4 to 5 years old. In some cases I've had to spend a little on third party Warranties or had the tail end of the manufacturer's new car warranty or manufacturer's approved used warranty.
I have £40k equity in the car that I currently own. If I deduct that equity from the total outlay over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
I exclude maintenance, consumables and insurance and I would like to think that I have bought reasonably sensibly and never been ripped off. That said, let's not imagine that all of the £1,600 was on pure depreciation of metal!
Anyway, going forward I believe that I can get in and out of BRAND NEW £90k cars every two years for exactly the same cost, by using PCP.
A £90k car on a PCP is circa £1,000 per month which when used on a 12 + 24 PCP deal equates to the £1,600 per month I have been spending over the 15.5 years.
Assuming my buying behaviour over the last 15.5 years were to continue, then I would be no worse off in terms of cash outlay if I went down the PCP route for the next say 15 years, except I would get the same or similar cars that I have previously owned, this time brand new with a warranty and potentially with lower maintenance and consumables costs (as only minor servicing is needed in the 24 months).
Clearly the biggest 'variable' is whether I have enjoyed value for money over the 15.5 years with my traditional buying approach, but assuming I cannot move to accessing better cars for the same money or the same cars for less money then I might switch to PCP for the next 15.5 years.
Thoughts welcome!
The other side of the coin is the guy that bought something like a 996 turbo S cab for £100,000. Another 50k on servicing, insurance over 15 years. So out lay of £150,000. He can still sell his car for 50k even if he's covered 100,000 miles if he wants to but whats the point it will do another 100,000 miles without breaking sweat. Not sure why more people don't do this and the car only gets cooler as its gets older in my book.I have spent £331k (cash, no finance) on cars in the last 15.5 years.
I have changed cars on average every 2 years and have been buying cars that are 500bhp (or equiv bhp/tonne) and cost ~£90k when new.
I have been picking them up when they were 4 to 5 years old. In some cases I've had to spend a little on third party Warranties or had the tail end of the manufacturer's new car warranty or manufacturer's approved used warranty.
I have £40k equity in the car that I currently own. If I deduct that equity from the total outlay over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
I exclude maintenance, consumables and insurance and I would like to think that I have bought reasonably sensibly and never been ripped off. That said, let's not imagine that all of the £1,600 was on pure depreciation of metal!
Anyway, going forward I believe that I can get in and out of BRAND NEW £90k cars every two years for exactly the same cost, by using PCP.
A £90k car on a PCP is circa £1,000 per month which when used on a 12 + 24 PCP deal equates to the £1,600 per month I have been spending over the 15.5 years.
Assuming my buying behaviour over the last 15.5 years were to continue, then I would be no worse off in terms of cash outlay if I went down the PCP route for the next say 15 years, except I would get the same or similar cars that I have previously owned, this time brand new with a warranty and potentially with lower maintenance and consumables costs (as only minor servicing is needed in the 24 months).
Clearly the biggest 'variable' is whether I have enjoyed value for money over the 15.5 years with my traditional buying approach, but assuming I cannot move to accessing better cars for the same money or the same cars for less money then I might switch to PCP for the next 15.5 years.
Thoughts welcome!
On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
Desert Dragon said:
The other side of the coin is the guy that bought something like a 996 turbo S cab for £100,000. Another 50k on servicing, insurance over 15 years. So out lay of £150,000. He can still sell his car for 50k even if he's covered 100,000 miles if he wants to but whats the point it will do another 100,000 miles without breaking sweat. Not sure why more people don't do this and the car only gets cooler as its gets older in my book.
On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
This is the other side of the coin, I agree that certain cars get cooler the older they get but equally you also miss out on the advancement of features. E.g., I would miss adaptive cruise control and lane keeping assist if I didn't get to try them because I had locked myself (no pun) into a cooler older car.On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
As you say horses for courses.
That said, if someone told me I'd soend £300k over 15 years I might have been tempted to get a Mclaren F1 back then and run it as a daily!
Desert Dragon said:
The other side of the coin is the guy that bought something like a 996 turbo S cab for £100,000. Another 50k on servicing, insurance over 15 years. So out lay of £150,000. He can still sell his car for 50k even if he's covered 100,000 miles if he wants to but whats the point it will do another 100,000 miles without breaking sweat. Not sure why more people don't do this and the car only gets cooler as its gets older in my book.
On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
I don't think Porsche subsidise PCP's or Personal Lease deals as aggressively as other manufacturers...because they don't have to. Never looked but I doubt on a 911 or any GT product they'd make sense...although in theory on a GT product they should because a PCP is effectively monetising the depreciation. On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
I looked at PCP on a Cayenne because I thought being a volume model it might make sense but to me it's actually the most expensive way of owning a car. Yes it gives you low monthly payments but only make "sense" if you roll the contract every two years into anew car.
sasha320 said:
Desert Dragon said:
The other side of the coin is the guy that bought something like a 996 turbo S cab for £100,000. Another 50k on servicing, insurance over 15 years. So out lay of £150,000. He can still sell his car for 50k even if he's covered 100,000 miles if he wants to but whats the point it will do another 100,000 miles without breaking sweat. Not sure why more people don't do this and the car only gets cooler as its gets older in my book.
On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
This is the other side of the coin, I agree that certain cars get cooler the older they get but equally you also miss out on the advancement of features. E.g., I would miss adaptive cruise control and lane keeping assist if I didn't get to try them because I had locked myself (no pun) into a cooler older car.On the PCP I imagine it depends on the car. Yes on a GT4 or GT3, maybe certain SUVs too not so sure on the Macans etc as never looked at one?
As you say horses for courses.
That said, if someone told me I'd soend £300k over 15 years I might have been tempted to get a Mclaren F1 back then and run it as a daily!
For £300k over last 15 years I'm being silly but you could have bought two Carrera GTs back in 2008/9 for that money. Value today?! Having said that I don't think what you've spent over 15 years is OTT at all just the average. Me I'm more from the old mezger 911 and use forever camp and its amazing how cheap they become to run and use once they've done all their depreciation. Same for any older 911 really 3.2 C, 964, 996 , 997 etc
sasha320 said:
I have changed cars on average every 2 years and have been buying cars that .... cost ~£90k when new.
I have been picking them up when they were 4 to 5 years old.
over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
I found you post posed an interesting question, but quite surprised at that high cost given you are buying at 4-5 years and selling at 6-7 years, did you always buy and sell to dealers (which might explain it as a lot would be dealer margin on both sides of trade)?I have been picking them up when they were 4 to 5 years old.
over the 15.5 years I have spent £1,600 per month on depreciation, dealer margins and warranty cover.
It does amaze me how often people change their cars.
I guess more people are likely to change their cars every 3 years if they have purchased them through some financial product rather than those people who buy outright (i am making this assumption as a chop and change every 2/3 years is the best way for these purchases to 'work')
I wonder how many people are ACTUALLY bored with their cars after 3 years and WANT to change rather than being financially nudged into it.
I guess more people are likely to change their cars every 3 years if they have purchased them through some financial product rather than those people who buy outright (i am making this assumption as a chop and change every 2/3 years is the best way for these purchases to 'work')
I wonder how many people are ACTUALLY bored with their cars after 3 years and WANT to change rather than being financially nudged into it.
v8ksn said:
I wonder how many people are ACTUALLY bored with their cars after 3 years and WANT to change rather than being financially nudged into it.
I guess, often, it is chicken and egg. Other times, as people have already commented, the nature of the deal means the customer tends toward 'churning' cars, rather than paying the final balloon.There are positives to these purchase methods. Certainly, if you are gearing-up to buy a very expensive toy (as distinct from the wheels you need day to day) then fixing outgoings and having the theoretical option of just handing the car back at the end of the term, if you cannot afford the balloon, does afford more flexibility.
Digga said:
guess, often, it is chicken and egg. Other times, as people have already commented, the nature of the deal means the customer tends toward 'churning' cars, rather than paying the final balloon.
There are positives to these purchase methods. Certainly, if you are gearing-up to buy a very expensive toy (as distinct from the wheels you need day to day) then fixing outgoings and having the theoretical option of just handing the car back at the end of the term, if you cannot afford the balloon, does afford more flexibility.
In that scenario, what happens to the deposit?There are positives to these purchase methods. Certainly, if you are gearing-up to buy a very expensive toy (as distinct from the wheels you need day to day) then fixing outgoings and having the theoretical option of just handing the car back at the end of the term, if you cannot afford the balloon, does afford more flexibility.
Say for example you put down a £30k deposit on a £100k car and finance £70k (with £30k of that £70 being monthlies and £40k being the baloon payment)
If after 3 years you decide to just hand the car back, do you get your deposit back?
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