Performance Car Finance - What to look out for?

[T2R31]

Chaps,

Considering financing the next purchase - first time I've looked buying this way.

I'm looking at a balloon type arrangement.

What sort of aspects/smallprint should I be looking out for and could perhaps bite me?

Admin costs?
Early settlement penalty?
Mileage terms?


Thanks!

[madmover]

Totally depends on the car/value in question. A Ferrari's milage terms, admin fees etc are likely to be different to that of a lotus or a bmw for example. Also depends on the finance company you are using, got any more information you are happy to share? There is alot of pros and cons attatched and only you can really weigh them up and make the decision. Admin fees are normally fairly light and not too bad, early settlement fee's often arn't too bad either but again sometimes often hold clauses which wont give you a figure in advance and you will need to hold the finance contract for a minimum of 12 months before you can settle without incurring massive fees. If your forced to hand the car back for any reason early then the fee's will be massive and you often can't cancel a contract only buy your way out. Milage you specify normally before the contract is in place, if you go over the specified milage in the contract period this often only becomes a problem if you hand the car back to them at the end or early in which you would end up with a hefty bill as they will state in the contract the costs incurred if such thing was to happen and its normally worked out on a per mile basis. Also may cause issues with any free servicing which is thrown in as part of the deal as obviously this could cost the company more money if you start doing alot more miles requiring more services. Although i believe in which case they would have the right to refuse to service it after you had cover the agreed milage for the contract period but dont hold me to that best checking with someone else. Only other thing i can add is if you sign a contract in a dealership as per a new law which was introduced not too long ago you dont have a cooling off period. so if you change your mind tough your stuck with it. You can however and dealers often wont tell you this take the contract home with you unsigned and do the paperwork at home. This is what i would do as you then get a 14 day cooling off period which i believe is active from the date which they receive the completed forms signed appropriately. Id be very careful on what you sign in the dealership if i was you and i would want to take it home first and read through everything in great depth and look at all the possible clauses and implications. Definitely worth having the 14 day cooling off period though just for the sake of taking the forms home to sign....

Im sure someone can explain some of this in better/more detail probably but im always willing to try and help where possible. If you have any questions or anything feel free to drop me a PM and id do my best to answer them!

[Pharoah]

T2R31 said:

Chaps,

Considering financing the next purchase - first time I've looked buying this way.

I'm looking at a balloon type arrangement.

What sort of aspects/smallprint should I be looking out for and could perhaps bite me?

Admin costs?
Early settlement penalty?
Mileage terms?


Thanks!

For the finance co I work for, the general rules / parameters are:

Balloons only on cars up to 5 years old (at the end of the agreement) otherwise can finance cars up to 8 years old without
Make sure the agreement is in your personal name (not a business one) and use a mainstream lender and you should be okay as everything is now regulated by the consumer credit act and in the favour of the customer (not the finance co). We dont have any financial penalties for early settlement.
Admin costs around £200
if you want a balloon this will be determined by the amount of miles you expect to do in the agreement

Drop me a pm if I can help further