Anyone know the background behind the Times story?

[paulrog1]

jonby said:

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

In my opinion the guy is neither greedy or stupid, I think whats happened is Stratstones offered the car with low monthly payments and maybe didnt explain properly what could happen in the future if the value of the car falls, the sales assistant should of gone through some figures, both best and worst case so he knew 100% what the future payment could be as he cannot just return the car

I suspect if they did that he would of run a mile, so just to sell a car a minimal conversation took place at the point of sale regarding future payments.

If he knew 100% what he was signing for then there would be no story.

[Big Ry]

^^^^^

Not sure I agree to be honest.

The last time I took finance on a car I had to sign about 10 documents. These documents which were in addition to the actual finance agreement, were basically me signing to confirm that I fully understood the agreement I had signed, and that everything had been spelt out to me in plain English.

I'm sorry, but you just don't get yourself into a position to buy anything of this value if you're genuinely an idiot. This guy clearly is not an idiot, I just think he probably got carried away and airbrushed over the facts because he just wanted the car regardless. It's now in the cold light of day two years on that he realises he should have paid more attention. Although having said that, I don't believe that in the two years between purchase and now, this guy hasn't once thought about what happens at the end of the deal.

If Stratstone or any other dealer had genuinely miss sold somebody finance, then the FCA could and would be down on them like a ton of bricks. You can't get away with stunts like that in this day and age.

The guy made an expensive mistake he needs to live with (hey we've all made them at some point).

[Jon39]

bompey said:

The Mad Monk said:

Is there a moral we can draw from this story?

Yes. Aston’s are much better value 2nd hand at 2 years old as they are half the price of a new one.

Shhhh don't tell everyone.
Us meanies need people to buy brand new Aston Martins, so that we can then buy the two year old bargains. - -

The recent poster who showed sympathy towards the man in the soup, does have one point. I have experienced pressure selling at a Mercedes main dealer, when they tried to dissuade me paying in full. Presumably finance commissions are lucrative. I am not a soft touch, so they picked the wrong man.

However, even if this might have occurred at Stratstone, surely you don't agree to a debt of £151,000 until you have carefully considered the contract. How many people buy a house without help from a solicitor ? The man has made a blunder and is now trying blame others.

As for finance firms making obscene profits. Put yourself in their shoes. You need to give (presumably) a handsome commission to a middle man, so would you lend me £151,000 over two years for revenue not profit, of just £5,500 a year?

Edited by Jon39 on Monday 14th October 17:06

[jonby]

paulrog1 said:

jonby said:

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

In my opinion the guy is neither greedy or stupid, I think whats happened is Stratstones offered the car with low monthly payments and maybe didnt explain properly what could happen in the future if the value of the car falls, the sales assistant should of gone through some figures, both best and worst case so he knew 100% what the future payment could be as he cannot just return the car

I suspect if they did that he would of run a mile, so just to sell a car a minimal conversation took place at the point of sale regarding future payments.

If he knew 100% what he was signing for then there would be no story.

I assume you agree he knew he was paying a 30k deposit and 1k per month for 24 months

I don't know what makes you think he might not have known the level of the balloon (127k), but if he didn't know the balloon level at the time he signed up then he really doesn't deserve any sympathy

Presumably you'll agree that everyone knows cars depreciate to some degree

And that everyone knows that you can't predict accurately what a car will be worth in 2 years time

Of course none of us were part of the conversation to know exactly what was said, but which of the above needs detailed explanation ?

He's not been caught out by small print, by devious tactics, by overcharging, by some nasty clause.

He's been caught out because the car has depreciated to a level that is less than the balloon as part of an agreement where the balloon was 75% of his initial purchase price (127k compared to 169k).

Did he think that the finco were financing over 100k at a low interest rate for 2 years with a balloon payment of 75% of initial purchase price AND carrying the risk of depreciation too ?!?

This is not a little old granny taking finance out on a domestic appliance. He has been very stupid and I feel no sympathy. He wanted to have his cake and eat it with zero risk and he's paying the price.

[Soleith]

Big Ry said:

^^^^^

If Stratstone or any other dealer had genuinely miss sold somebody finance, then the FCA could and would be down on them like a ton of bricks. You can't get away with stunts like that in this day and age.

Actually I don't think that's correct, it's an unregulated agreement so apparently the FCA has no jurisdiction over it.

[Venturist]

jonby said:

I assume you agree he knew he was paying a 30k deposit and 1k per month for 24 months

I don't know what makes you think he might not have known the level of the balloon (127k), but if he didn't know the balloon level at the time he signed up then he really doesn't deserve any sympathy

Presumably you'll agree that everyone knows cars depreciate to some degree

And that everyone knows that you can't predict accurately what a car will be worth in 2 years time

Of course none of us were part of the conversation to know exactly what was said, but which of the above needs detailed explanation ?

He's not been caught out by small print, by devious tactics, by overcharging, by some nasty clause.

He's been caught out because the car has depreciated to a level that is less than the balloon as part of an agreement where the balloon was 75% of his initial purchase price (127k compared to 169k).

Did he think that the finco were financing over 100k at a low interest rate for 2 years with a balloon payment of 75% of initial purchase price AND carrying the risk of depreciation too ?!?

This is not a little old granny taking finance out on a domestic appliance. He has been very stupid and I feel no sympathy. He wanted to have his cake and eat it with zero risk and he's paying the price.

All of this is irrelevant wishy-washy bks. He signed a contract which spells out in complete clarity exactly what happens at every stage. If you sign a contract without reading or making sure you fully understand its terms that is nobody’s fault but your own.

[jonby]

Venturist said:

jonby said:

I assume you agree he knew he was paying a 30k deposit and 1k per month for 24 months

I don't know what makes you think he might not have known the level of the balloon (127k), but if he didn't know the balloon level at the time he signed up then he really doesn't deserve any sympathy

Presumably you'll agree that everyone knows cars depreciate to some degree

And that everyone knows that you can't predict accurately what a car will be worth in 2 years time

Of course none of us were part of the conversation to know exactly what was said, but which of the above needs detailed explanation ?

He's not been caught out by small print, by devious tactics, by overcharging, by some nasty clause.

He's been caught out because the car has depreciated to a level that is less than the balloon as part of an agreement where the balloon was 75% of his initial purchase price (127k compared to 169k).

Did he think that the finco were financing over 100k at a low interest rate for 2 years with a balloon payment of 75% of initial purchase price AND carrying the risk of depreciation too ?!?

This is not a little old granny taking finance out on a domestic appliance. He has been very stupid and I feel no sympathy. He wanted to have his cake and eat it with zero risk and he's paying the price.

All of this is irrelevant wishy-washy bks. He signed a contract which spells out in complete clarity exactly what happens at every stage. If you sign a contract without reading or making sure you fully understand its terms that is nobody’s fault but your own.

I agree fully but this is worse than that because it doesn't appear there was anything in the contract he was unaware of

The article states: he would have paid a total of £181,000 for a car worth close to half that

Well yes, just as anyone buying it outright for cash would have paid 169k and find it's only worth 97k after 2 years

The difference of 12k is because he didn't pay even 20% of the purchase price up front so he paid interest on what he borrowed at a pretty competitive rate

So it has nothing to do with the contract

[zadumbreion]

https://mobile.twitter.com/chrismorganhit

[South tdf]

This guy has managed to get his story in the paper, just think how many other people buying other prestige brands have opted for a similar agreement and have, or will find out their car value is negative.

[V8V Pete]

The Mad Monk said:

Is there a moral we can draw from this story?

WTF do I know as a financially illiterate doctor but I'm guessing it's something like "Don't borrow heavily to buy a rapidly depreciating asset".

[Jon39]

You are exactly right Pete, and if someones employment might be ‘shaky‘, don't borrow at all. No income, but still have debt commitments, equals disaster.

Many years ago, if people could not afford to buy a car, they could borrow money using what was called a Hire Purchase agreement.

There were no smoke and mirrors involved. A percentage deposit was paid, which I think was regulated, then the balance of the purchase price including the interest was paid monthly, in equal instalments over 3 years. At the end of three years, the car was fully paid. If someone did not pay, the car was whisked away. All fairly straight forward and everyone understood how it worked.

At some point, the industry devised a much lower monthly payment debt arrangement. Bingo, more cars sold and also more expensive cars sold. Mercedes UK for example, were able to double their sales in quite a short time.

Very good for the industry, but have we all been duped ?

Edited by Jon39 on Monday 14th October 22:38

[cypriot]

jonby said:

All your points bar one are reasonable

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

Sorry, disagree. Who’s name is on the V5? The finance company’s? No, it’s his name, ie he owns it. What he can’t do is do whatever he pleases with it, as he has borrowed money against it. Using your argument, then most people don’t own their own houses.

[JonChalk]

cypriot said:

Sorry, disagree. Who’s name is on the V5? The finance company’s? No, it’s his name, ie he owns it. What he can’t do is do whatever he pleases with it, as he has borrowed money against it. Using your argument, then most people don’t own their own houses.

You are quite correct. No one with a mortgage owns their house. Hence the banks are allowed to repossess THEIR property if you default on your payments.

V5 has nothing to do with ownership, merely registered keeper of the vehicle.

[jonby]

cypriot said:

jonby said:

All your points bar one are reasonable

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

Sorry, disagree. Who’s name is on the V5? The finance company’s? No, it’s his name, ie he owns it. What he can’t do is do whatever he pleases with it, as he has borrowed money against it. Using your argument, then most people don’t own their own houses.

Go and have a look at your own V5. Or any V5. Or Google Image the word 'V5' and look at the first result

Just read the top two lines, the ones in capital letters, highlighted, right below the registration. Or just the first line

Then come back and tell us all on here you still believe that

[jonby]

JonChalk said:

cypriot said:

Sorry, disagree. Who’s name is on the V5? The finance company’s? No, it’s his name, ie he owns it. What he can’t do is do whatever he pleases with it, as he has borrowed money against it. Using your argument, then most people don’t own their own houses.

You are quite correct. No one with a mortgage owns their house. Hence the banks are allowed to repossess THEIR property if you default on your payments.

V5 has nothing to do with ownership, merely registered keeper of the vehicle.

Technically, the lender has a charge over the property when you take out a mortgage, which almost amounts to the same thing but with car finance it's more clear cut that the finco own the car until/unless you reach the end of the agreement / settle the agreement

[The Mad Monk]

Jon39 said:

bompey said:

The Mad Monk said:

Is there a moral we can draw from this story?

Yes. Aston’s are much better value 2nd hand at 2 years old as they are half the price of a new one.

Shhhh don't tell everyone.
Us meanies need people to buy brand new Aston Martins, so that we can then buy the two year old bargains. - -

As a generalisation, isn't this true of all cars?

The best deal is a two or three year old where someone else has taken most of the depreciation?

But don't tell the others.

[Jon39]

Some people do make things in life complicated, when really it is very simple.

The owner of vehicles subject to most types of finance, is the lender until the debt has been paid.. As already explained, the name on the V5 is the vehicle user, called keeper.
Just think about that. The finance company as owner, does not want to receive thousands of speeding and parking tickets, or to be dealing with 'road tax' and SORNs.

With houses and property, the buyers are the owners, but if they have mortgage, then there is a ‘legal charge' upon the property, which gives the lender right of repossession in the case of default.

Are you saying Aston Martin do not own their Gaydon factory ? They do, but if they default on their 'bonds', they might suddenly find they don't.

[Neil1300r]

jonby said:

I agree fully but this is worse than that because it doesn't appear there was anything in the contract he was unaware of

The article states: he would have paid a total of £181,000 for a car worth close to half that

Well yes, just as anyone buying it outright for cash would have paid 169k and find it's only worth 97k after 2 years

The difference of 12k is because he didn't pay even 20% of the purchase price up front so he paid interest on what he borrowed at a pretty competitive rate

So it has nothing to do with the contract

Worse than that - to pay the £30k deposit he commuted part of his pension. I can' believe somone earning £150K (according to the article) and who then used part of his pension to pay his deposit was not fully aware of what he was signing up for. The only surprise to him would have been how quickly an Aston can depreciate in the first 2 years. It isn't some limited edition special

[Jon39]

Neil1300r said:

Worse than that - to pay the £30k deposit he commuted part of his pension. I can' believe somone earning £150K (according to the article) and who then used part of his pension to pay his deposit was not fully aware of what he was signing up for. The only surprise to him would have been how quickly an Aston can depreciate in the first 2 years. It isn't some limited edition special

I agree with your point Neil.

I suppose the initial 2 or 3 year depreciation of core model Aston Martins, is probably very similar to his previous experience of BMWs and Minis. Importantly though, that of course is in percentage terms. His DB11 has a huge list price, so in Pound terms, the early value drop is also huge.

The interesting aspect with Aston Martins, is that after the initial 3 years, the depreciation seems to become very much slower than average cars. Most of the cars we see on the roads every day, have almost a zero value at 10 years old. I don't think many old Astons go below £20,000 at 10 years old, many would still retail for more than £40,000.

[Manners79]

I love this guy. People like him mean I can afford these amazing cars when they get a bit older. I'm the 4th owner of my 4.7 V8V, possibly (probably?) the first not to have used finance to get it and hopefully over the next few years I'll gently trade up as DB11s / new style Vantages come down until our numbers meet.

Not everyone who owns these cars is on pop star wages and it seem some of those who are lack the corresponding financial acumen (and/or ability to take responsibility for their own actions!)