Will Corona effect the Supercar Market
Discussion
LaurasOtherHalf said:
Fezzaman said:
LaurasOtherHalf said:
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
The old interest only method sort of worked as house prices rose and if you wanted out you could sell the house to clear the outstanding balance and pocket the capital appreciation (and have nowhere to live). Or if the house is worth less at the end, sell the house to partially clear the outstanding balance, have nowhere to live and be on the hook for the shortfall.
It sounded to me like the next big scandal as the two times I was pushed towards it, one was by deception (a 911) and the other (a FFRR) it was stacked to “beat any main dealer quote” by oracle finance.
And they could, the monthlies were miles cheaper and the initial deposit smaller-looks great if you want a flash car in the drive.
They could also push the product onto older cars (the 911 i was looking at was a 2010) which would be impossible on a PCP deal where age limits of vehicle apply.
It seemed to me like they’d found a way of sneaking this deal into people’s consciousness by way of everyone being totally blasé about buying a car in monthlies.
This looks the same apart from one tiny difference. That compulsory ballon payment.
If people are buying these older cars on a “PCP” I can just about guarantee it isn’t. Traditional repayment loan maybe, cash purchase maybe but PCP with balloon on a 5 year old Supercar, forget it. It will be a lease purchase.
When the times were good you could argue it made sense, “that GT3 will never loose money sir, I guarantee we’ll buy it back off you when you want to change, it’ll probably be worth more than what you’re paying now”.
Trouble is, the safety net of handing the car back doesn’t exist-exactly the reason I walked away from both deals.
the-photographer said:
LaurasOtherHalf said:
Fezzaman said:
LaurasOtherHalf said:
ghost83 said:
LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Never done lease purchase so don’t know much about it, why will it get some in serious trouble?The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
You cannot simply keep paying your monthlies until the end of the deal and hand the car back, you need to pay that balloon off by hook or by crook.
I looked at financing a couple of cars in ‘18 & ‘19 and all the usual suspects were touting this as the latest and greatest way of cheaply owning a high end car.
In fact, one company attempted to sign me up to one such deal whilst calling it a pcp. It got to the point of collecting the car whilst I read the agreement for me to find out but that’s a whole other story.
There will be a whole load of oracle finance customers who don’t have the option of handing back their cars at the end of the deal.
The old interest only method sort of worked as house prices rose and if you wanted out you could sell the house to clear the outstanding balance and pocket the capital appreciation (and have nowhere to live). Or if the house is worth less at the end, sell the house to partially clear the outstanding balance, have nowhere to live and be on the hook for the shortfall.
It sounded to me like the next big scandal as the two times I was pushed towards it, one was by deception (a 911) and the other (a FFRR) it was stacked to “beat any main dealer quote” by oracle finance.
And they could, the monthlies were miles cheaper and the initial deposit smaller-looks great if you want a flash car in the drive.
They could also push the product onto older cars (the 911 i was looking at was a 2010) which would be impossible on a PCP deal where age limits of vehicle apply.
It seemed to me like they’d found a way of sneaking this deal into people’s consciousness by way of everyone being totally blasé about buying a car in monthlies.
This looks the same apart from one tiny difference. That compulsory ballon payment.
If people are buying these older cars on a “PCP” I can just about guarantee it isn’t. Traditional repayment loan maybe, cash purchase maybe but PCP with balloon on a 5 year old Supercar, forget it. It will be a lease purchase.
When the times were good you could argue it made sense, “that GT3 will never loose money sir, I guarantee we’ll buy it back off you when you want to change, it’ll probably be worth more than what you’re paying now”.
Trouble is, the safety net of handing the car back doesn’t exist-exactly the reason I walked away from both deals.
With the 911 it was just when I read the small print which brought up the discrepancy, it ended up with the finance co or garage (I was never sure who) refunding all my costs throughout the experience. I still have the MD of the finance companies mobile number in my phone. I was told by my mate who is in FSs I could have crucified them for what they were doing but just wanted to put the whole experience behind me.
When Oracle finance were pushing it I obviously already knew the ins and outs of it. It sounds a ridiculous risk for me. at that point it was mainly uncertainties over interest rates and brexit on the wider economy.
Now we're in certain economic recession at best, this way of financing cars will no doubt result in insolvency.
So said:
sparta6 said:
On the plus side, if someone needs a loan, interest rates are almost non-existent !
But what will lenders be charging for car loans? I can well imagine car finance being more expensive next month than last.LaurasOtherHalf said:
This is a very important point I don’t think many will have picked up on.
The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
Yes a lot of dealers have been slyly doing this, dare I say even misleading with their sales. The transfer to the “lease purchase” agreement model is going to see people getting into serious trouble.
This is what I see on all my documents, emails and finance dashboard. The salesman did not explain once how the system would work , kept referring to it as a PCP
It's not a PCP, actually a hire purchase - it could catch so many people out
Had no idea all these cars were being bought on Lease Purchase....but then it sounds like a lot of the buyers didn’t know either. Sounds like it’s going to be horrendous. I’d imagine people will end up refinancing and pushing the deals out over a longer term in the hope that values improve or their financial position improves. Although I dread to think the terms they’d get on extending their current deals.
Lease purchase is good for self employed people who are VAT registered. So If you buy a 720s on lease purchase the monthly lease VAT payments you can claim half the VAT back or at least you used to be able to15 years ago. Oracle who I know the founder of used to give lease purchase to anyone in 90s but I think circa 2007/10 rules changed and you needed a letter from your accountants confirming you are high net worth individual and in those days minimum assets of £500,000( I expect that figure far higher now). The trick with lease purchase is to do it with a car that doesn't depreciate very much like GT3. If you're smart the overall cost of finance will be less but yes more risk. I wouldn't finance any other way TBH other than just a straight lease and give the car back but if yo actually want to own the thing go lease purchase 
IMI A said:
Lease purchase is good for self employed people who are VAT registered. So If you buy a 720s on lease purchase the monthly lease VAT payments you can claim half the VAT back or at least you used to be able to15 years ago. Oracle who I know the founder of used to give lease purchase to anyone in 90s but I think circa 2007/10 rules changed and you needed a letter from your accountants confirming you are high net worth individual and in those days minimum assets of £500,000( I expect that figure far higher now). The trick with lease purchase is to do it with a car that doesn't depreciate very much like GT3. If you're smart the overall cost of finance will be less but yes more risk. I wouldn't finance any other way TBH other than just a straight lease and give the car back but if yo actually want to own the thing go lease purchase
Pretty much as I described above IMA.You can’t, or shouldn’t be claiming the VAT back unless you’re putting the car through as a company car-which would end up costing you loads in BIK/Co car tax.
High net worth individual, that basically means putting down on a form you’re a company director and own your own house. Guess why?
They’ll have something to come after should you not be able to afford the final payment.
We all know prices are going to drop but it’s the lease purchase buyers that will cause the collapse of the market (IMHO, other opinions are available). I’m genuinely concerned for those who’ve signed up to it.
All finance which can be serviced is fine. All finance which can't be serviced is a problem. Its not rocket science or one is worse than the other. There are pros and cons on all types of finance. By way of example on any finance lease , HP if theres still a balance due after a repossession sale they still come after house, car etc. I used to twist Oracles arms to go ridiculously high on balloons. They were brilliant to deal with and I couldn't understand how they made money TBH. I think from memory I financed a 100k car over 5 years. cost me 25k when I take into account the vat i was claiming back and also the VAT element on the servicing costs etc and fuel I think too. Also got a mileage allowance on top from those I worked for which paid the 25k interest and servicing costs over three years 45k miles. Long time ago and my accountants handled most of it but I was v.impressed.
This general thing about doom and gloom. There will be a vaccine. Of course there will be pain until there is a vaccine. The world will return to normal its been around a long time. I've personally enjoyed spending so much quality time with my family make the most of it whilst it lasts as this rarely happens
There will be rules and regs hopefully put in place soon which will stop finance cos and and mortgage cos taking the p. No one can be expected to pay finance on a car if they can't go to work. Be interesting what courts think of force majeur and if current circumstance a finance/mortage co can repossess etc. Courts closed for a start from a practical perspective aren't they?
This general thing about doom and gloom. There will be a vaccine. Of course there will be pain until there is a vaccine. The world will return to normal its been around a long time. I've personally enjoyed spending so much quality time with my family make the most of it whilst it lasts as this rarely happens
There will be rules and regs hopefully put in place soon which will stop finance cos and and mortgage cos taking the p. No one can be expected to pay finance on a car if they can't go to work. Be interesting what courts think of force majeur and if current circumstance a finance/mortage co can repossess etc. Courts closed for a start from a practical perspective aren't they?
IMI A said:
you needed a letter from your accountants confirming you are high net worth individual and in those days minimum assets of £500,000( I expect that figure far higher now).
If they were taking threshold for HNWI certification as the same as for investment products then it’d be much lower. £100k net income OR min assets of £250k, excluding primary residence. Bar is much higher for sophisticated investor status (which allows you to play more with the big boys/exotic product in the financial markets). Gassing Station | Supercar General | Top of Page | What's New | My Stuff