5 Year HP Finance on a 66 Plate Car?

[ToastedDrive]

I am close to buying a 66 Plate VW Golf GTD which has 35,000 miles on the clock and is worth £15,399. I am thinking of doing a 5 Year HP Finance and then paying off the loan a year early in the 4th year. The only reason for the 5 year is for less of a deposit and lower monthly payments.

I know people normally try and stay away from 5 year finance but considering the car is relatively new and i will pay it off after 4 years, is this a decent deal? The APR rate is 9.9% and i will be doing about 12,000 miles a year.

Thoughts people?

Comments from people who don't agree with finance plans are not welcome...

Edit: If it helps to answer, my deposit is £4095 and the monthly payments are £238. (£2559 Part ex and £1500 cash)

Edited by ToastedDrive on Saturday 30th March 17:24

[Alucidnation]

ToastedDrive said:

I am close to buying a 66 Plate VW Golf GTD which has 35,000 miles on the clock and is worth £15,399. I am thinking of doing a 5 Year HP Finance and then paying off the loan a year early in the 4th year. The only reason for the 5 year is for less of a deposit and lower monthly payments.

I know people normally try and stay away from 5 year finance but considering the car is relatively new and i will pay it off after 4 years, is this a decent deal? The APR rate is 9.9% and i will be doing about 12,000 miles a year.

Thoughts people?

Comments from people who don't agree with finance plans are not welcome...

I couldn’t care less how people spend their money.

But do you think 9.9%apr is good?

Oh, and it’s a forum so you will get both sides whether you like it or not.

[valiant]

Someone will do the maths but 5 (or maybe 4 in your case) years at 9.9% sounds painful.

Have you checked with the banks? Might be pleasantly surprised in comparison.

[Dinoboy]

Sounds like a good plan but you can get far better than 9.9% APR.

[Butter Face]

Can you get a personal loan with a lower rate?

Quick maths on borrowing 15k over 60m @ 9.9% means a finance charge of £3973. Same balance over 48m is £3614 so the 5th year doesn't actually make a huge difference.

If you could get a 5.9% rate over 60m saves around £800 in charges over the 60m and more if you paid it off earlier.

[ToastedDrive]

Alucidnation said:

But do you think 9.9%apr is good?

Well it's my first time doing finance on a car so any advice from others regarding APR percentages would be much appreciated, is 9.9% good? I know it's not amazing but it's not terrible... right?

[Butter Face]

ToastedDrive said:

Edit: If it helps to answer, my deposit is £4095 and the monthly payments are £238. (£2559 Part ex and £1500 cash)

Edited by ToastedDrive on Saturday 30th March 17:24

£2907 interest over 60m @ 9.9
£2307 interest over 60m @ 5.9

Cheers

[Flumpo]

It depends on your salary and credit rating.

If you have an ok job and ok credit rating you can get 3%. If that’s the case then this deal is terrible.

If you have a less than perfect credit rating and this car is over stretching you a bit, it doesn’t matter as the 9.9% don’t care.

[couragebest88]

Personally I’d get a bank loan. Most are around 2.9-3.9% by the looks of it.

[WonkeyDonkey]

How much are golfs now brand new? £15k seems a lot for a 3 year old hatchback oil burner.

Thats not much help sorry but i'd advise looking at bank loans, should be able to get an APR of at least half that.

[essayer]

Complete guesswork but you’re paying about £15000 over four years, what would it be worth at 7 years old? £5k? Costing £2500/yr plus any bills if it’s not under warranty? Plus interest and early repayment etc

I’d definitely compare this to a PCP or lease on a new one just to check, as that £2500 might just pay for a new one. Not always (and there are downsides to those forms of ownership) but worth doing the sums.

Edited by essayer on Saturday 30th March 18:17

[CzechItOut]

Several banks are doing 2.9% APR personal loans for amounts around 11 grand.

https://www.moneysavingexpert.com/loans/cheap-pers...

[Spidersleg]

WonkeyDonkey said:

How much are golfs now brand new? £15k seems a lot for a 3 year old hatchback oil burner.

Thats not much help sorry but i'd advise looking at bank loans, should be able to get an APR of at least half that.

I believe they are about £28k new, but depends on spec.

[Mo28]

Spidersleg said:

WonkeyDonkey said:

How much are golfs now brand new? £15k seems a lot for a 3 year old hatchback oil burner.

Thats not much help sorry but i'd advise looking at bank loans, should be able to get an APR of at least half that.

I believe they are about £28k new, but depends on spec.

They start from around £30.6k now and tbf they come very well specced as standard.

I use to own a 2016 GTD but had to sell due to doing only 8k miles a year and the dpf light flagging up every 3 weeks. Great car if you do the necessary miles to require a diesel. Late 2015 cars onwards came with keyless entry, winter pack (heated seats, heated windscreen and head light washers) and discover nav as standard.

Just a word of warning, buy on condition and don't believe everything a dealer says. I say this as I have heard of someone who had a GTD and put a mileage blocker on the car. They did around 80k miles in the two years they had it but went back on 15k.

[Terzo123]

CzechItOut said:

Several banks are doing 2.9% APR personal loans for amounts around 11 grand.

https://www.moneysavingexpert.com/loans/cheap-pers...

This is the route I took along with A 3 year return to invoice GAP policy. Far cheaper than anything the dealer could offer.

[ToastedDrive]

Terzo123 said:

CzechItOut said:

Several banks are doing 2.9% APR personal loans for amounts around 11 grand.

https://www.moneysavingexpert.com/loans/cheap-pers...

This is the route I took along with A 3 year return to invoice GAP policy. Far cheaper than anything the dealer could offer.

The M&S loan over 5 years looks really good! I'm presuming that 2.9% isnt guaranteed based on credit score?

[ToastedDrive]

Mo28 said:

They start from around £30.6k now and tbf they come very well specced as standard.

I use to own a 2016 GTD but had to sell due to doing only 8k miles a year and the dpf light flagging up every 3 weeks. Great car if you do the necessary miles to require a diesel. Late 2015 cars onwards came with keyless entry, winter pack (heated seats, heated windscreen and head light washers) and discover nav as standard.

Just a word of warning, buy on condition and don't believe everything a dealer says. I say this as I have heard of someone who had a GTD and put a mileage blocker on the car. They did around 80k miles in the two years they had it but went back on 15k.

Very well spec out indeed! I'll be doing around 12,000 and my commute every day is down an A round which is 60+ the whole way and then Motorways on weekend so I should be fine, my DPF light has never come on in my TDI atm so I should be fine

[ToastedDrive]

Flumpo said:

It depends on your salary and credit rating.

If you have an ok job and ok credit rating you can get 3%. If that’s the case then this deal is terrible.

If you have a less than perfect credit rating and this car is over stretching you a bit, it doesn’t matter as the 9.9% don’t care.

Yeah I've noticed this now, I'm definitely going to look around at loans for lower APR.

[bassanclan]

Loads of 0% credit cards for purchases over 2 years or more. Then Do a balance transfer after 2 years to a similar deal

[Flumpo]

ToastedDrive said:

Flumpo said:

It depends on your salary and credit rating.

If you have an ok job and ok credit rating you can get 3%. If that’s the case then this deal is terrible.

If you have a less than perfect credit rating and this car is over stretching you a bit, it doesn’t matter as the 9.9% don’t care.

Yeah I've noticed this now, I'm definitely going to look around at loans for lower APR.

at least you were sensible enough to go away and ask.

If you haven’t had loans or car finance before you wouldn’t know.