How To Fund My McLaren
Discussion
TCruise said:
I'm yet to understand the "just hand it back" mantra
This isn't a brand new car.
Handing it back too early, will not be possible and likely to result in a penalty.
The finance house would very likely chase you for this by using bailiffs. Similar to not paying Credit Card fees.
If you "hand it back" towards the end of the term, you end up with nothing. You've effectively rented a car, despite investing in maintenance for its future value.
When financing a second hand super car, using a house owner analogy, You're the landlord, paying all the costs, without the benefit of actual ownership of the asset if you hand it back.
I do not think PCP works if you aren't buying new, or very nearly new, on a more normal car, that will likely plummet in price, that in 3 years you want to change and get another me car.
As for 10% returns. If you've bought the right car, I'd rather take the risk of a 10% yearly loss on an old supercar. Rather than a high risk portfolio that could make 10% a year, or lose the entire amount.
If you are genuinely happy with handing it back after ~3 years, with nothing to show for it. Go for something newer and benefit from a complete guarantee and even free servicing.
I think I agree with you as I don't like PCP or Leasing as it feels like you are just renting the car (which you are). Leasing works for me as cost of leasing a run of the mill car is cheaper than buying it (even with cash) and suffering the depreciation over 3 year 30K miles. However that does not work with a supercar as I plan on keeping it for who knows how long, could be 1 year could be 6 years. This isn't a brand new car.
Handing it back too early, will not be possible and likely to result in a penalty.
The finance house would very likely chase you for this by using bailiffs. Similar to not paying Credit Card fees.
If you "hand it back" towards the end of the term, you end up with nothing. You've effectively rented a car, despite investing in maintenance for its future value.
When financing a second hand super car, using a house owner analogy, You're the landlord, paying all the costs, without the benefit of actual ownership of the asset if you hand it back.
I do not think PCP works if you aren't buying new, or very nearly new, on a more normal car, that will likely plummet in price, that in 3 years you want to change and get another me car.
As for 10% returns. If you've bought the right car, I'd rather take the risk of a 10% yearly loss on an old supercar. Rather than a high risk portfolio that could make 10% a year, or lose the entire amount.
If you are genuinely happy with handing it back after ~3 years, with nothing to show for it. Go for something newer and benefit from a complete guarantee and even free servicing.
For me thanks I think I will HP it as even on a Mclaren the HP I am getting quoted is about 5.9% APR and I think I can get the much by investing my money in a stocks and shares ISA with little risk of losing the lot ( as the money would be put in monthly not at once ).
OldAndTired said:
1) 90% of cars bought are with finance.
2) I expect at least 50% of those 90% don’t have offsetting investments or the cash.
3) And close to 90% of those 50% think that using finance means they are not “putting their cash” in a depreciating asset. (Somehow the monthly payments magically don’t count). Dealers perpetuate this myth either because they don’t understand the maths or more likely it helps close the deal.
The pros of the explosion of finance In the market:
It has allowed the market to expand enormously in terms of supply and choice from the manufactures because so many more people can now afford to purchase these cars.
The downside of finance:
Because people judge affordability simply by looking at the monthly payments it has allowed manufacturers to massively raise the list price of new cars.
Yes it seems that financing is the king as the first thing any dealer ask is what is your monthly budget. I always prefer to work out what the total cost of the deal is . Some dealers just look at me and say I would like HP as it is cheaper than PCP. They say but why would you pay £1100 per month instead of £650 and then just trade it in a few years time. Just not from. I would rather buy it , pay for it over the time and then see what I want do with it .2) I expect at least 50% of those 90% don’t have offsetting investments or the cash.
3) And close to 90% of those 50% think that using finance means they are not “putting their cash” in a depreciating asset. (Somehow the monthly payments magically don’t count). Dealers perpetuate this myth either because they don’t understand the maths or more likely it helps close the deal.
The pros of the explosion of finance In the market:
It has allowed the market to expand enormously in terms of supply and choice from the manufactures because so many more people can now afford to purchase these cars.
The downside of finance:
Because people judge affordability simply by looking at the monthly payments it has allowed manufacturers to massively raise the list price of new cars.
drcarrera said:
Cash every time. The last car I bought with any sort of credit was my 205 Gti back in 1989! I'd hate to think how much more it would have cost me had I bought most of the 30 or so cars I've had since on credit.
Likewise every car I have bought for last 10 years has been financed and I would hate to thin how much more it would have cost me if I had paid cash . But I am lucky as my investments in the last 15 years have made more than the interest I paid 650spider said:
It is remarkable that every single time there is a thread like this on pistonheads, especially on expensive cars, nobody, and i mean nobody seems to finance their cars...
Amazing fact.
Especially when around here there are at least 6 McLarens now ranging from £800k to £80k and almost each one of them are on a finance deal or similar, and with maybe an exception or 2, the 'owners' could of easily bought outright.
As i posted before, you 'buy' in the way you are most comfortable doing.
I think for me HP is still the most appealing and what I am most comfortable with. Amazing fact.
Especially when around here there are at least 6 McLarens now ranging from £800k to £80k and almost each one of them are on a finance deal or similar, and with maybe an exception or 2, the 'owners' could of easily bought outright.
As i posted before, you 'buy' in the way you are most comfortable doing.
Paying cash seems such a waste of an opportunity ro invest the cash.
Add to that financing is getting cheap I think that is the route I will go for.
But yes it is good to have this debate as new finance products come and go and nee to to be explored
650spider said:
Ferruccio said:
Two sorts of people at our local food bank.
About half have had a series of really lousy breaks.
The other half have basically gone out and bought a bunch of stuff they don’t need and can’t afford.
Is this a guess or did you actually ask them all when they were entering / leaving?About half have had a series of really lousy breaks.
The other half have basically gone out and bought a bunch of stuff they don’t need and can’t afford.
I’ve spent time there.
I talk to the chap who runs it. And the other volunteers.
deggles said:
I think this thread has reached ‘peak Pistonheads’ 
Shouty thread title
Cash vs PCP
“Opportunity cost”
10% investment returns
McLaren depreciation
Just needs some stair domination and frozen pork products for a full house.
And a few cheery tales of happy go lucky travelling folk Shouty thread title
Cash vs PCP
“Opportunity cost”
10% investment returns
McLaren depreciation
Just needs some stair domination and frozen pork products for a full house.
EvoSid said:
drcarrera said:
Cash every time. The last car I bought with any sort of credit was my 205 Gti back in 1989! I'd hate to think how much more it would have cost me had I bought most of the 30 or so cars I've had since on credit.
Likewise every car I have bought for last 10 years has been financed and I would hate to thin how much more it would have cost me if I had paid cash . But I am lucky as my investments in the last 15 years have made more than the interest I paid EvoSid said:
I think I agree with you as I don't like PCP or Leasing as it feels like you are just renting the car (which you are). Leasing works for me as cost of leasing a run of the mill car is cheaper than buying it (even with cash) and suffering the depreciation over 3 year 30K miles. However that does not work with a supercar as I plan on keeping it for who knows how long, could be 1 year could be 6 years.
For me thanks I think I will HP it as even on a Mclaren the HP I am getting quoted is about 5.9% APR and I think I can get the much by investing my money in a stocks and shares ISA with little risk of losing the lot ( as the money would be put in monthly not at once ).
Very best of luck For me thanks I think I will HP it as even on a Mclaren the HP I am getting quoted is about 5.9% APR and I think I can get the much by investing my money in a stocks and shares ISA with little risk of losing the lot ( as the money would be put in monthly not at once ).
drcarrera said:
As you say, you are very lucky (or very clever!). If I could guarantee a return greater than borrowing costs then I'd obviously borrow as much as I could! Sadly, that's never been the case for me in anything other than in the very short term.
Definitely not clever. Maybe lucky. I have NEVER picked investments myself, as I have not got the tome of skill set or discipline to trade in stocks and share.I have engaged the services of a financial advisors who have provided a fund or funds that I invest into (usually 3 1 safe, 1 medium risk and 1 higher risk but not silly risk). I then pay in a monthly amount and let it build up, so yes some months my invested amount for the month may be negative and ace versa, In the 15 years I have done this the average is approx 6%. Maybe that is what makes me more inclined to go down the HP route.
If you are not comfortable with that or not been as lucky then yes stick with cash.
Oaky said:
Are all these painful threads utter bollix19?
Probably as everyone ultimately does what they think is best. But I am always open to suggestion .Today Mclaren Glasgow provided a PCP quote on the new 570Gt ( not sure what that is like )
2 year deal , £15,000 deposit
with 7,000 miles per year it is £1600 per month, total cost £51,800 but you get the 3 year warranty thrown in
With 5,000 miles per year it is £1560 per month, total cost £50,880 again you get 3 year warranty thrown in
Now I ma not sure about you guys but that seems a lot of cash (for me) to lose in only 2 years
So my thinking is buy a 2017 570s or maybe a 570Gt for around £85K. The cost of buying this on finance will be approx £93,000 with a £15K deposit. in say 2 years I would expect that to still be worth £65K maybe £60K. So a loss of £33k plus 2 years worth of warranty charges .
To me that seems better value than the PCP option of losing £50k in 2 years just to have a new car that you can hand back. Also if I keep the used car a bit longer then maybe the depreciation will level out and not be as bad per year
But the problem is Mclaren Glasgow are not offering Test drives at the moment so no idea how on earth you are to decide if the car they are selling is for you or not.
EvoSid said:
Oaky said:
Are all these painful threads utter bollix19?
Probably as everyone ultimately does what they think is best. But I am always open to suggestion .Today Mclaren Glasgow provided a PCP quote on the new 570Gt ( not sure what that is like )
2 year deal , £15,000 deposit
with 7,000 miles per year it is £1600 per month, total cost £51,800 but you get the 3 year warranty thrown in
With 5,000 miles per year it is £1560 per month, total cost £50,880 again you get 3 year warranty thrown in
Now I ma not sure about you guys but that seems a lot of cash (for me) to lose in only 2 years
So my thinking is buy a 2017 570s or maybe a 570Gt for around £85K. The cost of buying this on finance will be approx £93,000 with a £15K deposit. in say 2 years I would expect that to still be worth £65K maybe £60K. So a loss of £33k plus 2 years worth of warranty charges .
To me that seems better value than the PCP option of losing £50k in 2 years just to have a new car that you can hand back. Also if I keep the used car a bit longer then maybe the depreciation will level out and not be as bad per year
But the problem is Mclaren Glasgow are not offering Test drives at the moment so no idea how on earth you are to decide if the car they are selling is for you or not.
I was offered the same as you but figured I'd rather buy one somebody else had depreciated for me.
bennno said:
I agree I picked up a 18 plate 4k mile 540C with all the options I wanted for a very good price from a main dealer.
I was offered the same as you but figured I'd rather buy one somebody else had depreciated for me.
If you don't mind me asking how much did you pay for it and how are you finding it I was offered the same as you but figured I'd rather buy one somebody else had depreciated for me.
Yes it makes so much sense to buy used at the moment as I firmly believe that there will be a price pint that Mclarens do not go below like Lambos are around £60K now
Dr Jekyll said:
I always read them in the hope of finding a really good logical argument as to why I should finance a new supercar instead of restricting my budget to what's in my car fund. always disappointed.
Me too, I’ve recently been quoted 6.4% APR from Porsche and I presumed I’d beat that through a broker, the best I have so far is 5.9% but this is with a much lower balloon/higher monthlies. If you’re a higher rate tax payer you need to make a consistent 12%PA return on cash to pay the 6.4% after tax, I just can’t see this being doable unless you are incredibly gifted or lucky.
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