Anyone know the background behind the Times story?
Discussion
After initially reading the article I felt quite sorry for the gentleman, but then after studying the figures more closely, I took a different view. The newspaper headline is misleading.
His lifelong dream was an Aston Martin and he agreed to ‘obtain' a brand new DB11 in 2017.
Instead of paying for it, he had a finance contract.
Initial payment £30,000; 24 monthly payments of £999; final payment £127,000.
The total is £181,000, but with a list price stated as £169,210, would the extra £11,000 be a reasonable amount for interest, finance costs and commission for the dealer. ?
He says he had been expecting to change the DB11 for another car.
Reading between the lines, the final required payment is more than the current vehicle value, so do you think he has been caught out by the two year depreciation.
The article states that ‘his' DB11 value is now £97,000.
One cheeky extract was, ‘he would have paid a total of £181,000 for a car worth close to half that'.
Do you think that is an apple and pears comparison ? The starting price, and then the depreciated value two years later.
This seems a bit Northern Rock, with their 125% give away mortgages.
With calculator to hand I can see that he appeared to want a brand new £170,000 car (they do fall in value) by paying just 17% deposit, and somehow hoping then to pay £151,000 within 2 years.
Going to the newspaper might have backfired.
It is all a great shame really, because with the £54,000 he has so far paid, he could have purchased a lovely 3 year old Aston Martin, which would now be his own car to keep.
Edited by Dewi 2 on Sunday 13th October 21:01
I’ve not read the story though negative equity isn’t unusual in a cooling used car market. The train of thought is that you should pay more in monthly payments than depreciation unless you want to burn your initial equity/deposit and try and out in a decent level of deposit (more than the VAT amount on the initial cost). Car finance has been too easy to get IMO over the last few years & this is an example of what happens if it goes wrong unfortunately.
Have not seen the article but I would assume he is on a form for PCP with guaranteed future value as two years sounds a short term to finance a car.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
On pcps you can give the car back at the end and owe nothing. I think his problem with the deal is the £30k deposit he was hoping to have to roll into the next car again after 2 years. At £999 pcm that is a pipe dream, I think the trade call that kind of deal ‘equity erosion’. I got offered a vanquish s earlier this year for under £300 pcm with my car as full deposit. The ‘only’ problem with the deal was that I would owe more after the 2 years than when I started! And that was finance from a AM dealership. Scary stuff.
South tdf said:
Have not seen the article but I would assume he is on a form for PCP with guaranteed future value as two years sounds a short term to finance a car.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
As you can see in the reprint above, the financed debt is something called Balanced Payment Plan, and it is/was over two years.
I suppose if he had bought with cash, the depreciation would have been exactly the same (£72,000), so why does he feel upset ?
He rented the car, has had his fun and unfortunately, appears to have learned something about new £170,000 motor cars.
So this guy’s complaint is that the car has depreciated by more than expected, wiping out all of his deposit. Anyone buying/hiring a new Aston Martin thinking they will only be loosing £999 ish a month for the first 2 years including finance charges is dreaming. He has not done his homework. The best thing to do is give the car back and buy a 2 year old one on a real pcp, probably end up better off. How is this news?
)at the end of the term. t
t ...I must be understanding this differently than some of you. He got a great deal. This worked far, far better than buying the car for cash at the beginning. He spent 54k, and turned the car back to the dealer. If he had bought it, he would've been out 72k after selling it. So, unless there is information that is unstated in the article, he saved a tidy sum by leasing the car. Far smarter than buying, isn't it? The loser here is the finance company for predicting a much higher residual in their deal. They needed to collect more up front, or more per month (or both).
DB9VolanteDriver said:
I must be understanding this differently than some of you. He got a great deal. This worked far, far better than buying the car for cash at the beginning. He spent 54k, and turned the car back to the dealer. If he had bought it, he would've been out 72k after selling it. So, unless there is information that is unstated in the article, he saved a tidy sum by leasing the car. Far smarter than buying, isn't it? The loser here is the finance company for predicting a much higher residual in their deal. They needed to collect more up front, or more per month (or both).
Agreed, except that he thought he was buying, rather than leasing it ...SydneyBridge said:
Forced to pay £137,976 for an Aston Martin DB11 I’ll never own
Was a gun held to his head ?SydneyBridge said:
when he dipped into his pension pot in the summer of 2017 for the £30,000 deposit
Pension Pot ....Alarm bells ...whoop whoop !SydneyBridge said:
He bought the car from Stratstone, a dealer in London’s Mayfair
That well known pension fund managerps Sydney...not having a go at you , just quoting your article link.
Dewi 2 said:
South tdf said:
Have not seen the article but I would assume he is on a form for PCP with guaranteed future value as two years sounds a short term to finance a car.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
It is more likely a case of he wants to swap after two years and is in negative equity (like lots of PCPs at half way). Everyone is different but I would have looked at the interest rates and all of the additional charges to see if I could afford it.
As you can see in the reprint above, the financed debt is something called Balanced Payment Plan, and it is/was over two years.
I suppose if he had bought with cash, the depreciation would have been exactly the same (£72,000), so why does he feel upset ?
He rented the car, has had his fun and unfortunately, appears to have learned something about new £170,000 motor cars.
So in short he has purchased a new DB11 and got the hump it has depreciated more than the deposit and payments he made.
Makes you wonder if he would feel any different if he used a bank loan?
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