QP GTS available (briefly)

dem maser said:

I need a car and I can't obtain credit......I have no cash either......if anyone knows a lender which accepts average credit scores let me know.....

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Message me mate

Contigo said:

Which surprises me for someone who lives in a house the size of yours.

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Yes it's slightly crazy. Normally car credit is much easier to get than other types.
If you regularly pay a big mortgage you should easily
Be able to get car credit

Contigo said:

The lowest monthlies are on a PCP, I see no point in running it for 5 years as most people change well before then. £30k down rest on finance over 3 years at £430 per month with a £28k balloon I reckon.

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What happens at the end if I don't want to pay the balloon?

Interesting conversation chaps. There are definitely two schools of thought on car finance however I'm with Phil on this one. It's madness to buy a depreciating asset when money is so cheap right now. I lost £25k on a 911 turbo years ago and swore never to buy outright at that level again. I tend to buy cars up to £15k or so and finance any others. I'd rather hold on to money or invest it, which I have been doing for many years, particularly in SEIS and EIS approved companies. I have 15 or so investments of that type which (hopefully!!) will turn out to be far more productive that parking the cash into cars.

As a general rule, if you want PCP then assume a final value of around 35% of the purchase price. This can be as low as 25% for heavily depreciating stuff or as high as 40% for those deemed less risky by the finance houses.

I can tell you that interest of 5.9% is quite achievable at the moment, perhaps less. I know this because I bought a BMW two weeks ago and got 4.9% with no set up fees.

Here is a very useful tool that you can use to play with numbers. I use this regularly to ensure that I am understanding what I'm signing up to and that the numbers quoted stack up.

http://www.thecalculatorsite.com/finance/calculators/carloancalculator.php

If we look at Dave's example of a Stradale for £67,995 and a £32k deposit on straight finance, it looks like this over 60 months on straight finance (no final value payment)
Initial vehicle deposit:£32,000.00
Loan payments:£41,652.70
Balloon payment at end:£0.00
Total payable:£73,652.70
60 monthly payments of:£694.21
Total interest:£5,657.70

If you did the same over 36 months with a final value, it looks like this,nitial vehicle deposit:£32,000.00
Initial vehicle deposit £32,000
Loan payments:£17,365.24
Balloon payment at end:£24,000.00
Total payable:£73,365.24
36 monthly payments of:£482.37
Total interest:£5,370.24

If it was me, I'd be looking at a 10-15% deposit which should ensure that the car is never in negative equity. By that, I mean that if I had to sell, I would at least get enough back to repay the finance house. In that case, it would look like this,
Initial vehicle deposit:£6,795.00
Loan payments:£47,517.05
Balloon payment at end:£24,000.00
Total payable:£78,312.05
48 monthly payments of:£989.94
Total interest:£10,317.05

At the end of the day, it's all a personal choice and everyone handles these type of decisions in their own way. I choose to use money in other ways and not to tie it to a car. I can fully understand the opposite works for some people too.

Hope that helps!

When it comes to getting finance, I know a great broker who can help if anyone needs it. I also know a great IFA for help with mortgages too, he's based in the South and yet I still use him !!

There are three options at the end of term

1) Pay balloon and own car
2) Trade car in for new one, they pay off remaining finance, any money left over can be used towards your new car and you do a deal on the new car
3) Hand car back to finance company and walk away. It will need to be inside agreed mileage and in good condition or they could charge you. Any charges are in the agreement and so they don't have carte blanche to make up spurious amounts.

In the case of any finance, one at least 50% of the money borrowed has been repaid, you can actually hand the car back at any time. This is not advertised but it's the law. Therefore, if you bought a car for £20k, put down 2k and borrowed 18k, once you have paid £9k (plus interest so likely around 60% of the way through the contract), you can actually hand it back and walk away. This is useful if you happen to have bought a troublesome car or if circumstance change dramatically and you need out.

D Walker said:

What happens at the end if I don't want to pay the balloon?

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Give them the keys back with a grin. As long as In acceptable condition and mileage.
There is normally some equity left as the balloons are bloody conservative

iainw said:

Give them the keys back with a grin. As long as In acceptable condition and mileage.
There is normally some equity left as the balloons are bloody conservative

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PCPs over 3 years often seem to come
With the lowest monthlies, especially with a good deposit. I do 35-50% normally - as Phil says it's rare to keep it more than that anyway.
Ferrari offers 55% residual. Maserati is laughable. 108k purchase price from Dick lovetts for an Mc Cabrio and 36k balloon after 3 years. After I had stopped chuckling I told him not to bother saving the quote.

Athol,
That's brilliant,
Thank you!

Yes, Ferrari and Lambo are two of a very select few that can offer over 50% future value. Maserati main dealer finance offers are typical of the level of customer service that we all feel could be improved on!! They're trying to sell over 50,000 cars a year and yet they don't offer anything other than the ordinary to tempt people in. I'm sure they have a grand plan but I have no idea what it is....

Nae bother mate.

iainw said:

Give them the keys back with a grin. As long as In acceptable condition and mileage.
There is normally some equity left as the balloons are bloody conservative

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So,
If you do less mileage than the agreement, does that get factored in and thT car is worth more or do they just shrug shoulders and say tuff luck!!

D Walker said:

So,
If you do less mileage than the agreement, does that get factored in and thT car is worth more or do they just shrug shoulders and say tuff luck!!

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Tough luck mate. However, in most cases there will be additional value at the end of term over what's still owed and so you'd be unlikely to hand it back. More likely to either pay and own it or buy something else. Remember, you can sell at any time and change to something new or whatever.

Looking at the figures you are quoting I guess my "comfy" spot is around the 50k mark,
I am happier to maybe finance now as I am as sure as I can be that my next contract may last 3 years, with the confidence that if it goes Pete Tong i've the cash to bail me out.
Thanks for all the advice,
I've been trying to convince SWMBO who is worse than me. but like i've said its more available for investment / student let properties..

Dave

D Walker said:

Looking at the figures you are quoting I guess my "comfy" spot is around the 50k mark,
I am happier to maybe finance now as I am as sure as I can be that my next contract may last 3 years, with the confidence that if it goes Pete Tong i've the cash to bail me out.
Thanks for all the advice,
I've been trying to convince SWMBO who is worse than me. but like i've said its more available for investment / student let properties..

Dave

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Yup. As a general rule, lease a depreciating asset and buy and appreciating asset. Sweeping statement buy makes general sense. Cash for other things offers opportunity as well as piece of mind. For example, I make SEIS/EIS investments that offer tax breaks of up to 50% on the money invested as well as no capital gains, if there are any. This way, I effectively use money that would otherwise go to the taxman to inward invest into the SME economy, create jobs, drive invention and generally contribute.

Unless you get Dickies MC!!
Lovely car but I wouldnt dare put miles on it.
Ewan - apologies for being part of decimating your for sale thread.......

outrun said:

Yup. As a general rule, lease a depreciating asset and buy and appreciating asset. Sweeping statement buy makes general sense. Cash for other things offers opportunity as well as piece of mind. For example, I make SEIS/EIS investments that offer tax breaks of up to 50% on the money invested as well as no capital gains, if there are any. This way, I effectively use money that would otherwise go to the taxman to inward invest into the SME economy, create jobs, drive invention and generally contribute.

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SEIS/EIS - Whats that - I am sure you tried to explain it to me on first Le Mans night but I am thick and was ******, so how could an average Joe invest...

D Walker said:

I've been trying to convince SWMBO who is worse than me. but like i've said its more available for investment / student let properties..

Dave

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So you buy to let without finance?

C

D Walker said:

What happens at the end if I don't want to pay the balloon?

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Sell the car privately and pay the balloon off anything over £28k left is yours back from the original deposit. I reckon the balloon will be more like £20k but let me know if you want my finance guy to call you.

CatmanV2 said:

So you buy to let without finance?

C

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Stop it...lol, no we will have to take out mortgage(s),
Just missed out on one in Newcastle with a 16% annual return, the current landlord decided to keep it another 6 months.....
Keep looking tho...

Contigo said:

Sell the car privately and pay the balloon off anything over £28k left is yours back from the original deposit. I reckon the balloon will be more like £20k but let me know if you want my finance guy to call you.

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Cheers Phil - I will...