Anyone know the background behind the Times story?
Discussion
bompey said:
Probably getting massive grief from his wife and thought to chance it with the papers. As others have said he’s done the smart thing by leasing it, as buying outright would have cost him more.
If he’s done an unregulated then there’s no handback option at the end I believe. Venturist said:
bompey said:
Probably getting massive grief from his wife and thought to chance it with the papers. As others have said he’s done the smart thing by leasing it, as buying outright would have cost him more.
If he’s done an unregulated then there’s no handback option at the end I believe. 
Ah, interesting. Having read up a bit more about balanced payments, actually there is no option to return the car at the end of the term, you have to make the final balloon payment, it's not optional! That may explain the forced to pay part, still not sure how he'll never own it though. Someone had pasted the article yesterday but looks like it's gone now. BP is unregulated so no recourse through the FCA etc, sounds like a simple case of the guy not understanding the contract he was signing.
Soleith said:
......there is no option to return the car at the end of the term, you have to make the final balloon payment, it's not optional! .....
That makes sense to me, because the early payments are low.
There were a couple of previous comments, about this finance scheme being cheaper than outright purchase if the car is returned after two years.
The finance provider obviously make the rules, so they don't want to be on the loosing side.
I don't think we are allowed to post newspaper articles. Possibly why it was deleted.
Edited by Dewi 2 on Monday 14th October 11:33
Dewi 2 said:
The article states that ‘his' DB11 value is now £97,000.
There is a low mileage 2018 model at a main dealer for £99000, or £95000 at an indy. Main dealer 2017 DB11s start at around £94k.
A dealer might put his up at £97k, but there's no way it's worth that much for him. He could try and sell it private for £90k, or chop it in for a few grand less than that.
As others have stated, this isn't a PCP deal with an option to hand the car back, this was a finance deal with a balloon payment. So he needs to find £127k to buy a car that, at best, he can get £90k for, more likely high 80s. Just pointing out the numbers here, I have zero sympathy. The guy took money from his pension pot to buy a car he couldn't really afford by signing up to a finance deal that would leave him in a hole tens of thousands of pounds deep.
the guy is an idiot. The finance contract is black and white, so if he didn't read it or understand it, then it is his fault. This whole "evil lenders" is rubbish. And the idea that he doesn't own the car is complete tosh as well. It is his car, he owns it, and has borrowed money to purchase it. Of course this comes with some terms and conditions. Just because the value has now fallen is no ones problem other than his. Grow up, deal with it, and learn from it. Mainly don't buy a car you can't afford, and how about reading the finance contract before signing.
Edited by cypriot on Monday 14th October 14:49
cypriot said:
the guy is an idiot. The finance contract is black and white, so if he didn't read it or understand it, then it is his fault. This whole "evil lenders" is rubbish. And the idea that he doesn't own the car is complete tosh as well. It is his car, he owns it, and has lent money to purchase it. Of course this comes with some terms and conditions. Just because the value has now fallen is no ones problem other than his. Grow up, deal with it, and learn from it. Mainly don't buy a car you can't afford, and how about reading the finance contract before signing.
" It is his car, he owns it, and has LENT money to purchase it"Do you mean he has BORROWED money to purchase it?
cypriot said:
the guy is an idiot. The finance contract is black and white, so if he didn't read it or understand it, then it is his fault. This whole "evil lenders" is rubbish. And the idea that he doesn't own the car is complete tosh as well. It is his car, he owns it, and has borrowed money to purchase it. Of course this comes with some terms and conditions. Just because the value has now fallen is no ones problem other than his. Grow up, deal with it, and learn from it. Mainly don't buy a car you can't afford, and how about reading the finance contract before signing.
All your points bar one are reasonableEdited by cypriot on Monday 14th October 14:49
However it baffles me how people can talk with such authority about finance agreements and then make a statement 'it is his car, he owns it, he has borrowed money to purchase it'
That statement is absolutely, categorically, without any possible room to argue, totally incorrect on every possible level
When you take out any kind of finance/lease/HP deal (other than borrowing money from the bank for a stated 'purpose' when they take no security, which by definition is not finance/lease/HP), the finance company pay the dealer directly, the finance company in doing so buy the car from the dealer, the finance company own the car from the moment the dealer is paid and the finance company continue to own the car until their customer fulfills all terms of the lease
cypriot said:
the guy is an idiot. The finance contract is black and white, so if he didn't read it or understand it, then it is his fault. This whole "evil lenders" is rubbish. And the idea that he doesn't own the car is complete tosh as well. It is his car, he owns it, and has borrowed money to purchase it. Of course this comes with some terms and conditions. Just because the value has now fallen is no ones problem other than his. Grow up, deal with it, and learn from it. Mainly don't buy a car you can't afford, and how about reading the finance contract before signing.
Thats abit harsh, yeah the guy doesnt know what he was getting into. Maybe it wasnt explained to him what might happen in the future. Stratstones should not even be offering the product if this is what Could happen, but they are not bothered one bit, its another sold car, irrespective of the finanial situation the guy could end up in.Edited by cypriot on Monday 14th October 14:49
Not alot of people read the small print when you have to sign the contract, plus he was probably in love with the DB11 during the purchasing process so he would of signed anything to get the keys. The cars are an aspirational purchase, something he only dreamed of for years.
I dont purchase anything on HP or PCP, only an occasional bank loan so I own all my cars and possessions.
I feel sorry for him, another example of a finance company operating, in my opinion, without any conscience ripping him off for their excessive profits. I imagine the man has/is having sleepless nights, excessive stress at a time he should be enjoying his life just to realise a dream.
paulrog1 said:
another example of a finance company operating, in my opinion, without any conscience ripping him off for their excessive profits.
NonsenseFinance agreement costs (no matter what the agreement) are determined almost solely by the interest rate. The amount of interest the customer pays in £s is of course based on level of deposit, monthlies & balloon but that still links back to the interest rate - how much you borrow, over what period of time, at the agreed interest rate
The other charges a finance company make (documentation fees, etc) only make up a purely nominal percentage of overall payments for a 6 figure sum car finance agreement
It's the customer that has been greedy/stupid to have a policy that has a small deposit, low monthlies and somehow think there is low/no risk despite the fact the only way he could get an agreement with those parameters was to go for an unregulated balanced payments policy
Given that balanced funding tends to carry a fairly low interest rate and the finco will have not made money from anything other than interest on the amount they have financed, to suggest they are making excessive profits on this is bonkers and carries no merit whatsoever
It does seem as though the gentleman in this situation would appear to have not understood what he signed up for. As others have said, balanced payments do not offer any ability for a "guaranteed" future value, they purely state a final figure which must be paid in order to retain the vehicle. Interest rates on a BP can be had for less than a PCP (in my experience), as the finance company isn't guaranteeing the end value, so they're less likely to be left with the asset.
If the vehicle is worth less than the final payment, then the client has to make up the difference. If it's worth more, then the client retains that difference (either via selling the car or rolling it into a new deal). I've been offered these agreements in the past (as I'm sure a number of us have), and it's amazing just how much the dealer will mess with the numbers to try and make the monthly payment palatable. People these days seem to only look at the monthly, not the true cost of ownership.
I think PCP's can be good if used correctly. For instance, if I were going to buy a new DD, then I'm more than likely going to take out a PCP. that's because I know to the penny what my exposure is for three years, and in reality I fully expect to just hand the keys back at the end, I'm not expecting to be sitting on a deposit for the next car. For me, PCP's are leasing with a defined exposure, which I'm happy with. I wouldn't go near a BP unless it was on a vehicle that I knew without question I was keeping for a very long time, and was just looking for the most cost effective method to finance it.
If the vehicle is worth less than the final payment, then the client has to make up the difference. If it's worth more, then the client retains that difference (either via selling the car or rolling it into a new deal). I've been offered these agreements in the past (as I'm sure a number of us have), and it's amazing just how much the dealer will mess with the numbers to try and make the monthly payment palatable. People these days seem to only look at the monthly, not the true cost of ownership.
I think PCP's can be good if used correctly. For instance, if I were going to buy a new DD, then I'm more than likely going to take out a PCP. that's because I know to the penny what my exposure is for three years, and in reality I fully expect to just hand the keys back at the end, I'm not expecting to be sitting on a deposit for the next car. For me, PCP's are leasing with a defined exposure, which I'm happy with. I wouldn't go near a BP unless it was on a vehicle that I knew without question I was keeping for a very long time, and was just looking for the most cost effective method to finance it.
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