Car Dealers & Finance
Discussion
Is it me? or has the world gone mad?
Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
What would it cost to lease?
Have you thought about buying a car with cash?
What is your 20% deposit? Let's assume you are looking at a 10k car. That's £2k. You can get a car That would last 5 years. Whilst you save up for the next one.
16%. Interest. I'm in the wrong line of work.
Note
Currently.
I'm looking at remortgage costs. 1.5% seems typical.
Have you thought about buying a car with cash?
What is your 20% deposit? Let's assume you are looking at a 10k car. That's £2k. You can get a car That would last 5 years. Whilst you save up for the next one.
16%. Interest. I'm in the wrong line of work.
Note
Currently.
I'm looking at remortgage costs. 1.5% seems typical.
Why not just get a bank loan to buy the car you want? It will be far cheaper.
If your credit rating is too low for that, then you’re stuck with sub-prime finance secured on the car.
Used car finance rates are usually pretty awful, has been like that forever. A lot of people just look at the monthly payment.
If your credit rating is too low for that, then you’re stuck with sub-prime finance secured on the car.
Used car finance rates are usually pretty awful, has been like that forever. A lot of people just look at the monthly payment.
Talking to 'non car' people at work it certainly seems like people are quite willing to sign anything without giving it much thought. But I think this applies more to younger people who have the opportunity to borrow a new or nearly new car, rather than have to settle for an older car that might have something wrong with it.
Most recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Most recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Yeah 16% is taking the piss. Just get an unsecured personal loan for 5 years and pay it back early, you’ll get more like 3% then with miles lower monthly payments.
The dealers were probably upset as that’s a big chunk of their bonus. Oh well boo hoo for them, they should have worked harder at school and got a better job.
I do believe most people are totally braindead at this kind of thing and will sign on the dotted line. One dealer I was looking at a car from had this thing where if you don’t use their finance they charge a £200 “admin fee”, what a load of rubbish! An admin fee for less work!
The dealers were probably upset as that’s a big chunk of their bonus. Oh well boo hoo for them, they should have worked harder at school and got a better job.
I do believe most people are totally braindead at this kind of thing and will sign on the dotted line. One dealer I was looking at a car from had this thing where if you don’t use their finance they charge a £200 “admin fee”, what a load of rubbish! An admin fee for less work!
piker said:
Is it me? or has the world gone mad?
Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
Sounds like a rate for risk offer that, did they propose your details to the finance company ? Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
I work at a main dealer for new and used cars, our rate for all our used cars is 7.9% fixed, Some places use finance companies like evolution funding who will come back with kneebreakers finance offer like 20% apr plus for dodgy credit history.
If not and they are offering you 16 to 18% apr just walk away thats criminal.
Informative comments thanks. I had a telephone conversation with a major dealer saying passed finance at 16% APR but the condition was I must part ex my car with them to get the deal, well that conversation didn't last much longer. All the dealers I have spoken want my car due to low mileage but offering decent money but I know I can sell it via motorway or sell it privately which I will probably do and pay just pay cash for a car. The only reason I was considering finance is that I did not want to break into my savings even though I knew I would have to pay interest but not at those stupid rate. One thing that did cross my mind was that due to having current car on finance which has only £2k left on it and payments been made on time wondered if this impacted their decision. If I paid this off now would my chances for a better rate increase 2-6 months down the line.
Brainpox said:
Talking to 'non car' people at work it certainly seems like people are quite willing to sign anything without giving it much thought. But I think this applies more to younger people who have the opportunity to borrow a new or nearly new car, rather than have to settle for an older car that might have something wrong with it.
Most recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Indeed this ^^ Or bugger the apr, what are the monthlies? Only thing that matters is what you're paying each monthMost recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
The straight answer to the question is yes, over the years the car buying public have went a bit mad, or got a bit lazy, and easy access to finance has eroded the sort of cost/value calculation a consumer would traditionally do, even subconsciously, when considering whether to buy a product. Many people just sign up to pcp,hp,lease deals without thinking about whether it's best for them in their own circumstances, whether it's affordable, or whether they could get a better deal on the same car elsewhere through some other method of purchase or lease. If everyone was paying cash the dealer who is selling car x for £16,999 would do all the business and the dealer selling the same car for £17,500 would struggle. When the difference seems like only few quid a month, and when the difference is disguised behind incentives and interest rates, people just don't seem as bothered, even if with interest it ends up be a a grand more over the lifetime of whatever the arrangement is. Some people will say yeah no big deal, but for me it's mad not to try to achieve the best value you can get in any big purchase.
piker said:
just looking at the comment from Dan W, one of those deals was indeed sourced by Evolution finance brokers at 18% apr with their client Oodle finance again they were amazed when I said no.
Yes thats about right then, I remember a customer years ago accepting a deal on a DS3 at 34.9 %. from evolution.. still makes me shudder today when i think about it.Dan W. said:
piker said:
just looking at the comment from Dan W, one of those deals was indeed sourced by Evolution finance brokers at 18% apr with their client Oodle finance again they were amazed when I said no.
Yes thats about right then, I remember a customer years ago accepting a deal on a DS3 at 34.9 %. from evolution.. still makes me shudder today when i think about it.I had a customer buy a car about 11 years ago and they could only get horrendous rates, they bought that car, changed after 2 years and have done the same since, I've just sold them their 6th car, now at proper prime rates, they are over the moon, they can get credit anywhere now and their family have bought multiple cars from me. The system works if you play it properly.
Evolution + Oodle + 18% APR leads me to believe that the OP has patchy credit. I too would be surprised if that was the only offer I had for a customer and they didn't take it as they're not likely to get much better elsewhere!
The Rotrex Kid said:
As you and I know Dan, if they're being offered 34.9% APR then it's because that's the only offer they're going to get.
I had a customer buy a car about 11 years ago and they could only get horrendous rates, they bought that car, changed after 2 years and have done the same since, I've just sold them their 6th car, now at proper prime rates, they are over the moon, they can get credit anywhere now and their family have bought multiple cars from me. The system works if you play it properly.
Evolution + Oodle + 18% APR leads me to believe that the OP has patchy credit. I too would be surprised if that was the only offer I had for a customer and they didn't take it as they're not likely to get much better elsewhere!
Oh of course, Just every now and then i felt a bit sorry for the customer but if they want on the finance ladder no other choices i suppose.I had a customer buy a car about 11 years ago and they could only get horrendous rates, they bought that car, changed after 2 years and have done the same since, I've just sold them their 6th car, now at proper prime rates, they are over the moon, they can get credit anywhere now and their family have bought multiple cars from me. The system works if you play it properly.
Evolution + Oodle + 18% APR leads me to believe that the OP has patchy credit. I too would be surprised if that was the only offer I had for a customer and they didn't take it as they're not likely to get much better elsewhere!
Like you say its good for those who are able to do it and get their credit back to a decent position. and the rates drop
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