APR on car loans
Discussion
Porsche911R said:
still costs you money , if you have the money just buy it, finance is a dirty word imo.
Why is it a dirty word ?I like to keep money as I can use it to get a better return than the loan.....maybe parking a profit is a dirty word as well ?
Funny thing is so many people against financing a car yet most cars sold on finance of some. The 2 do not add up
Porsche911R said:
The classic PH one liner lol.
the difference is I can prove it. We are a retailer for 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return simmer margins but stopped buying more
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff real it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually
Now over to you why is it dirty ?
EvoSid said:
Ok sent Emil and got a very quick response as folows
"Your monthly payments are capital and interest fixed.
There is a a penalty of 58 days interest to pay the agreement earl"
So as I read that if I want to settle early I just pay 35 days worth of interest in the capital plus the balance left
So to me it sounds good but what do you guys think
That doesn't really answer what you want to know though. "Your monthly payments are capital and interest fixed.
There is a a penalty of 58 days interest to pay the agreement earl"
So as I read that if I want to settle early I just pay 35 days worth of interest in the capital plus the balance left
So to me it sounds good but what do you guys think
Did you ask if the interest is front loaded?
I would ask for their best rate on a variable rate for comparison.
£50000
at 4% apr is £4200 in interest over the term.
If you change your mind after 3 months there is quite a difference between paying off a front loaded loan and a one that is not front loaded.
Front loaded you would owe them £50800 plus the £260 for the 54 days interest.
On the variable rate you would owe them roughly £47k.
gizlaroc said:
That doesn't really answer what you want to know though.
Did you ask if the interest is front loaded?
I would ask for their best rate on a variable rate for comparison.
£50000
at 4% apr is £4200 in interest over the term.
If you change your mind after 3 months there is quite a difference between paying off a front loaded loan and a one that is not front loaded.
Front loaded you would owe them £50800 plus the £260 for the 54 days interest.
On the variable rate you would owe them roughly £47k.
No I did not ask, but will ask that. I just assumed it will be spread evenly.Did you ask if the interest is front loaded?
I would ask for their best rate on a variable rate for comparison.
£50000
at 4% apr is £4200 in interest over the term.
If you change your mind after 3 months there is quite a difference between paying off a front loaded loan and a one that is not front loaded.
Front loaded you would owe them £50800 plus the £260 for the 54 days interest.
On the variable rate you would owe them roughly £47k.
Good point about paying early .
Thanks
EvoSid said:
the difference is I can prove it.
We are a retailer with 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return similar margins but stopped buying more as more hassle than worth
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff retail it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually without using my own money.
Now over to you why is it dirty ?
We are a retailer with 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return similar margins but stopped buying more as more hassle than worth
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff retail it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually without using my own money.
Now over to you why is it dirty ?
It probably won't be a problem at 3.7% apr, you would need to get out very early for it to hurt big.
However, there is something that grates with me with front loaded loans, you get to a point where you have paid all the interest and the loan is now interest free. I know it is not as you have paid it, but you now have a loan with no interest left to pay and if you do want/need to change car that deposit and the £4200 worth of interest is just gone.
I much prefer only paying the interest on the amount I have remaining each month.
It also depends on the car of course, where it is on the depreciation curve etc.
Borrowing a bit to get into a car that is at the right point of that curve can be more sensible than buying an older car.
However, there is something that grates with me with front loaded loans, you get to a point where you have paid all the interest and the loan is now interest free. I know it is not as you have paid it, but you now have a loan with no interest left to pay and if you do want/need to change car that deposit and the £4200 worth of interest is just gone.
I much prefer only paying the interest on the amount I have remaining each month.
It also depends on the car of course, where it is on the depreciation curve etc.
Borrowing a bit to get into a car that is at the right point of that curve can be more sensible than buying an older car.
EvoSid said:
Porsche911R said:
The classic PH one liner lol.
the difference is I can prove it. We are a retailer for 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return simmer margins but stopped buying more
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff real it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually
Now over to you why is it dirty ?
gizlaroc said:
time waster said:
I would keep investing in the business and not in cars.
What an utterly bizarre thing to post on the Porsche section of a car enthusiasts forum. What is it you drive?
What do you do for a living?
Why are you on here?
MannyLon said:
gizlaroc said:
What an utterly bizarre thing to post on the Porsche section of a car enthusiasts forum.
What is it you drive?
What do you do for a living?
Why are you on here?
Think you've mis understood what he was trying to say What is it you drive?
What do you do for a living?
Why are you on here?
But you will just go round in circles.
How many businesses have an excess of cash while still growing? Very, very few.
Taking £50,000 from your cash flow in a business that you are still growing rather than borrowing it at £100 a month would rarely be a sensible option. I guess the only time is if your businesses bank balance is at the point where it never dips below £50000 anymore and no chance it ever will.
Personally I hate not having a chunk of money I know I can use to make money. Finance is not a bad thing if used properly.
How many businesses have an excess of cash while still growing? Very, very few.
Taking £50,000 from your cash flow in a business that you are still growing rather than borrowing it at £100 a month would rarely be a sensible option. I guess the only time is if your businesses bank balance is at the point where it never dips below £50000 anymore and no chance it ever will.
Personally I hate not having a chunk of money I know I can use to make money. Finance is not a bad thing if used properly.
Isn't there a famous quote that if you want a successful business then you should borrow as much as you can and grow grow grow?
Not that I care. I came here for the loans Q. IMO there are no "car loans" as Its either a secured/unsecured pers loan or HP (PCP). Usually loans are the cheapest way to borrow money unless a dealer special offer. I got loaned 9k last Aug at 2.9% secured (zopa) but no idea whats good now
Not that I care. I came here for the loans Q. IMO there are no "car loans" as Its either a secured/unsecured pers loan or HP (PCP). Usually loans are the cheapest way to borrow money unless a dealer special offer. I got loaned 9k last Aug at 2.9% secured (zopa) but no idea whats good now
EvoSid said:
the difference is I can prove it.
We are a retailer for 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return simmer margins but stopped buying more
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff real it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually
Now over to you why is it dirty ?
Indulge my curiosity please but first please do tell where you can currently get a 7-10% net return on property which is not in a high risk area ? (I can get ten percent if I want drug dealing prostitutes in Burnley who don't pay as tenants ) .We are a retailer for 4 stores and I can invest the money into stock which sells at a GP of 25-30% and gives a NETT profit f approx 7-10& depending on how clever I need the accountant to be. We also have some buy to lets that return simmer margins but stopped buying more
No rocket science no investing in shares or bitcoins or black magic etc. Just simple buy stuff real it and make profit and having liquid cash means you can jump on deals immediately without worry.
For me having my own money tied in car or any asset does not work. I did not always think like this until it was explained in simple terms now I like leasing , funding etc as it helps pays for my car eventually
Now over to you why is it dirty ?
So I agree 100%,you can get fantastic returns from investing in your own business ,but this is where I get curious ,who does that ? In 35 years of business the only people I found who invest their own funds for example in stock is when the business is collapsing and they are trying to save it,otherwise you use the bank or cash reserves.
I can also see if for example you are asset rich but cashflow poor why you would utilize finance but generally it is a very expensive way to buy a car.
Everyone finances ,I bought a lambo and they were shocked when I paid for it in full ,I asked why when most of their customers are footballers but he said they all finance.How people spend their money is their business but like Mr R I have never been able to logically justify it without being willing to take high risk.
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