Porsche finance

[petrolheed]

Whats the script with Porsche finance? It seems any dealership Ive spoken to is more interested in selling me finance than they are the actual car. Ive even had "I can do you a better price on the car if you take finance".

Whats the score with that then?
How much is it making them?
If I was to take it how soon and what penalties would there be to pay back early?

[rosino]

It's all in the small print. But essentially the are fees at inveption and then early repayment fees which are typically one month interest. So make a spreadsheet calculate what the latter is and see if it's worth going for it and reimbursing early. If they knock off 5k it most certainly is...

I think they have an incentive system which doesn't work whereby the simple fact of signing the agreement incentives them. A bit like the mortgages in the old days which then encouraged clerks to push for stty mortgages as they wld get paid commission at inception and not on performance of the asset.

In any case. If it means a better price on the car just do it. Repaying early is dead simple.

[petrolheed]

So in theory I could pay it off after 1 week?

What would it cost?
1 months interest only? Not capital as well?

Say £100,000 borrowed at 10% = £10,000 pa interest
So penalty would be 10,000/12 = £833.33

Correct? Nothing else?

Are the set up charges normally included in the "asking" price?

I need to be clear on this so apologies for the questions.

[mollytherocker]

Why so cynical? They just want the best for you.

[AndrewO]

The way it was explained to me....

Lease purchase at 3.5%, 3yrs finance, fees about £300 at the start and £100 to end.

There are 3 parts in this example of £100
deposit - £25
finance - £50
payment at end of term - £25
Can alter the numbers any way you want was my understanding.

you can pay off the £50 but not the final within the term, that goes to the end. Maybe the redemption fee (months interest) is if you cancel the policy. Maybe reduce the end of term figure and leave it to run to the end ?

3.5% fixed for 3yrs

[mollytherocker]

APR or flat rate? There is a circa 100% difference.

[thegoose]

I'm pretty certain you can settle within 14 days and pay no fees or penalties - it's the statutory cooling off period, but they may charge interest on a daily rate pro-rata (which will be tiny of course).

[AndrewO]

mollytherocker said:

APR or flat rate? There is a circa 100% difference.

Flat, fees are the £300-400.

[mollytherocker]

AndrewO said:

mollytherocker said:

APR or flat rate? There is a circa 100% difference.

Flat, fees are the £300-400.

Just remember that with the flat rate you pay interest on the full amount for the full term. Its about double the APR rate.

[petrolheed]

If it makes any difference it's a used car.

So I could take advantage of the "discount" offered by taking the finance and then pay it off in full withinf 14 days (cooling period) and suffer no penalties?

Can anyone confirm this is correct?

If not, was my above example correct?

[AndrewO]

mollytherocker said:

Just remember that with the flat rate you pay interest on the full amount for the full term. Its about double the APR rate.

Unbelieveable ! I asked what the APR was and they said "didn't know". 3.5% flat and about £400 fees, bit sneaky to load it up on interest like that.

[mollytherocker]

AndrewO said:

mollytherocker said:

Just remember that with the flat rate you pay interest on the full amount for the full term. Its about double the APR rate.

Unbelieveable ! I asked what the APR was and they said "didn't know". 3.5% flat and about £400 fees, bit sneaky to load it up on interest like that.

Its the oldest trick in the book and it makes my blood boil. I cant believe they still pull this st.

[AndrewO]

petrolheed said:

If it makes any difference it's a used car.

So I could take advantage of the "discount" offered by taking the finance and then pay it off in full withinf 14 days (cooling period) and suffer no penalties?

Can anyone confirm this is correct?

If not, was my above example correct?

You will probably find somewhere in the small print they have that covered

[thegoose]

AndrewO said:

You will probably find somewhere in the small print they have that covered

I'm pretty sure it's a statutory requirement, but the easiest way to tell for sure is to ask for a copy of the T's & C's

[truck71]

All the finance packages I was shown allowed full or partial repayment of the balance at any time during the term. For partial repayments you choose to either reduce the overall term or reduce the value of each monthly repayment.

I've transferred mine onto interest free credit cards, a (much) cheaper loan and settled the balance with maturing investments not available at purchase time. Saving on interest will be in the thousands I reckon. Even if you're able to buy your car outright it is likely to still be worthwhile taking the finance to get the better purchase deal and subsequently settle the finance in full

You can manage your account online or get friendly with the nice ladies at VW finance, simples.

[HappyBoxster]

You can cancel within 14 days but will pay interest on a daily basis to exit. I have done this (without taking a discount) and it is your right. See about 2/3 down:

http://www.tradingstandards.gov.uk/cgi-bin/glos/co...

It was explained to me that if you do this the OPC has there commission cancelled by head office. Given that they are passing this on to you (in full or part) as a discount they might be a bit miffed. Not a great way to build a relationship but all is fair in love and war?

[mrdemon]

just do the deal on the car with cash they will match the finance price

finance is a hard sell as its about 10k profit on 50k.

as for not knowing APR report them to trading standards , quoting flat rates is bullst.

but as I say they hide the amounts from you so you don't see the 10k you have just over paid to them

[KenC]

HappyBoxster said:

It was explained to me that if you do this the OPC has there commission cancelled by head office. Given that they are passing this on to you (in full or part) as a discount they might be a bit miffed. Not a great way to build a relationship but all is fair in love and war?

That is not my experience. I financed my 981 to get an additional allowance. When I called Porsche Finance regarding an early redemption figure within the first 14 days they suggested I use the coolling off period to avoid the fees. I said to them that the dealer had said to me that if I did so they would loose the commission and therefore they would look to me for additional funds. Their response was that they had settled with the dealer and there were now only two parties involved, Porsche Finance and myself. I cancelled, the dealer did not loose and I kept my additional allowance.

[pete]

I've found Porsche (really VW) finance to be pretty straightforward. Yes, they quote flat rates to make things sound attractive, but they've always been happy to show me overall APR figures for comparison when I've asked. Around 6% APR (fixed) seems reasonable at the moment for lease purchases, as it's a very aggressive market.

[douglasgdmw]

If you pay off the finance early does the Gap Insurance stop immediately or does it continue for the term?

George