Best Car Financing Terms
Discussion
BrntRubber said:
Hi All,
What’s the best financing terms you have been able to get in the UK?
I am looking at 6% APR fixed for 3 years, which seems high.
Thank you
As a business owner i have used Lombard in the past which are probably amongst the cheapest..IIRC i've had finance with them less the 4% APR.What’s the best financing terms you have been able to get in the UK?
I am looking at 6% APR fixed for 3 years, which seems high.
Thank you
OhThatHurtAbit said:
0% and big discounts = heavy depreciation and massive negative equity. Nothing is free 
I know and it’s usually one or the other!When they had the 0% offer, they rarely gave big deposit contributions or discounts and when the 0% offer run out, they started giving up to 25% off, it all works out the same
BrntRubber said:
richthebike said:
BMW regularly do 0%, that's what the M3 is on. Big discounts too. Probably not what you're asking though!
I fell for that when I bought the M6 Gran Coupe.0% and 10% off msrp. In reality it was way over priced and I sold it 4 years later for 33% of what’s I paid
I'm not expecting a 4 or 5 year old F80 to be worth a lot, but I wanted one, and that's how much they cost. It's sat at just on 500 a month, and the cash is still in my account - who's paying outright when they're giving 0%?!
As for expensive, overpriced etc. it's a hellof a thing. They're ubiquitous and define the segment for a reason I guess.
Anyway, not a financing expert, but this seemed the best way to get what I wanted.
Anyway, back to Porsche...
BrntRubber said:
Did you need to link it to your business?
I've used Clydesdale Asset finance and the rates have always been very competitive. I didn't have to link it to my business but I only borrowed up to £50K. I think after £50K they ask more questions, want more guarantees.Edited by moonigan on Monday 22 April 08:42
This is always an interesting discussion.
The cheapest way is usually cash, but if that's not an option then personal bank loans can be had at circa 3% APR up to £25k.
Above this you can get around 5% APR through third party lenders. At these rates the interest charges do start to stack up (use the Magnitude calculator to get an idea).
Needless to say, if the manufacturer is offering very low or 0% APR then go with that. Although as other posters have mentioned, just because the offer is 0% APR it does not mean the deal is good. Manufacturers can claw back lost interest through, for example, jacking up the RRP.
The cheapest way is usually cash, but if that's not an option then personal bank loans can be had at circa 3% APR up to £25k.
Above this you can get around 5% APR through third party lenders. At these rates the interest charges do start to stack up (use the Magnitude calculator to get an idea).
Needless to say, if the manufacturer is offering very low or 0% APR then go with that. Although as other posters have mentioned, just because the offer is 0% APR it does not mean the deal is good. Manufacturers can claw back lost interest through, for example, jacking up the RRP.
If you do need finance then surely the cheapest way is to mortgage/remortgage. The best rates are way below 2% for the best borrowers and low LTV. You just need to make sure you are disciplined and make over payments within a timescale to ensure that you aren't just perpetually increasing your debt burden.
They'll be some arrangement fees to add to the cost but if you're financing a large amount it should still work out cheaper.
They'll be some arrangement fees to add to the cost but if you're financing a large amount it should still work out cheaper.
Xfe said:
The cheapest way is usually cash,
This makes sense at first but isn't always true.What's your marginal tax rate to take the extra cash?
If you own business, and decided to take an extra £100k out to buy a car it's going to cost you 58% as dividends cone from after tax profit then you're paying another 38% on top of that, so basically 58% tax. It'll cost you £200k+ to buy a 992 for cash.
If you take it as income you're paying 50% income tax, 13.8% employers NI, and 11% employees NI, on all the extra, and losing your tax breaks as you're over the £100k income level. So again it costs you £200k+ to buy a 992 for cash.
How much does finance cost you given you're taking a lower additional income to cover the payments?
When I worked it all out, finance was significantly cheaper than cash due to the marginal tax rates on taking additional income out. Financing a 992 costs £1k pcm so only an extra £12k per year income. Even when you add the interest charges, financing was at least 25% cheaper than cash if you could choose how much income to take (ie you're a business owner like many on here will be).
Edited by kbf1981 on Monday 22 April 17:56
kbf1981 said:
Xfe said:
The cheapest way is usually cash,
This makes sense at first but isn't always true.What's your marginal tax rate to take the extra cash?
If you own business, and decided to take an extra £100k out to buy a car it's going to cost you 58% as dividends cone from after tax profit then you're paying another 38% on top of that, so basically 58% tax. It'll cost you £200k+ to buy a 992 for cash.
If you take it as income you're paying 50% income tax, 13.8% employers NI, and 11% employees NI, on all the extra, and losing your tax breaks as you're over the £100k income level. So again it costs you £200k+ to buy a 992 for cash.
How much does finance cost you given you're taking a lower additional income to cover the payments?
When I worked it all out, finance was significantly cheaper than cash due to the marginal tax rates on taking additional income out. Financing a 992 costs £1k pcm so only an extra £12k per year income. Even when you add the interest charges, financing was at least 25% cheaper than cash if you could choose how much income to take (ie you're a business owner like many on here will be).
Edited by kbf1981 on Monday 22 April 17:56
Very well said!
BrntRubber said:
Give the man a Speedster!
Very well said!
Agree...A smart financial breakdown of why it is nearly always more sensible to take finance on proportion of a high end car purchase...I nearly always take finance out on an expensive car even if it usually follows a large deposit, sometimes 50%. Even when i bought my recent 458 with no p/x so needed finance after putting down a £40k deposit..Another often forgotten side benefit is the degree of insurance afforded by the finance company as they will do all due diligence checks on car's history and if there is any outstanding finance.Very well said!
I used Supercar finance on the 458 who i can wholeheartedly recommend..
Taffy66 said:
Agree...A smart financial breakdown of why it is nearly always more sensible to take finance on proportion of a high end car purchase...I nearly always take finance out on an expensive car even if it usually follows a large deposit, sometimes 50%. Even when i bought my recent 458 with no p/x so needed finance after putting down a £40k deposit..Another often forgotten side benefit is the degree of insurance afforded by the finance company as they will do all due diligence checks on car's history and if there is any outstanding finance.
I used Supercar finance on the 458 who i can wholeheartedly recommend..
If it makes so much sense to take finance then why put down any deposit, especially up to 50%? Surely the benefits of taking finance will be proportionally increased the more you take.I used Supercar finance on the 458 who i can wholeheartedly recommend..
Genuinely interested btw as I can never quite figure out what the right answer is.
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