finance naivity

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mrsteve

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Hi all,

I am in the process of purchasing a new or used s3, the dealer has suggested that to stop me returning every 6 months that i buy new and get the exact spec i want (which is fair enough), so, £31k over 3 years pcp, i was willing to put down a 4k deposit and there maybe about 500 negative equity in my part ex, i suggested i would pay no more than £500 a month,

They seem to be finding it difficult to get to that figure, worst case is im borrowing 27.5k on a 31k car over 3 years, am i just swimming about in dream world or is this not reasonable? (i could clear the neagative equity in my old car so dont consider that)

any help or a slap back to reality would be appreciated.

thanks
MrSteve
 
I was quoted 500+ P mnth on a loan of 20K by hinda so i am not surprised at 27K for more than 500 mth. I would think thats a bit optomistic.

is this a three year lease with a trade in buy out option Probably around setlement of about 13K.
 
Try car-finance.net

I carried out a lot of research when buying mine a few weeks ago. I could not find anyone to get anywhere near them and the stealers were miles away.

Make sure you stick with PCP if that is what you want as a lot of companies will try to sell you a lease purchase deal that does not have a guaranteed future value, just a final payment. Lease purchase will seem attractive as the APR is generally lower then PCP. I would suggest you are trying to get under 9.5% APR on a PCP.


Cheers

M
 
mrsteve said:
Hi all,

I am in the process of purchasing a new or used s3, the dealer has suggested that to stop me returning every 6 months that i buy new and get the exact spec i want (which is fair enough),

thanks
MrSteve
Click to expand...

If you are in the habit of returning every 6 months even speccing your own is unlikely to stop this, I know from experience that I change my own cars far too often to make economic sense yet everytime I've ordered one in the past I've assured the wife that "..this is the car for me...." and believed every word - at the time.

Perhaps you are a serial car buyer or like me just get bored quick. I wouldn't buy brand new as this will cost you even more - just scan the websites and find an ex demo or used with the right spec saving yourself at least the VAT therefore borrowing less. PCP is a good thing in theory but how likely are you to keep a car 3 Years ?

I' go for a personal loan with cheaper APR and be realistic with yourself, the saleman is not thinking of you - he's thinking of extra commision earned off the PCP.

The good news is I'm still more than happy with the S3 still after 7 months of ownership and nothing is tempting me so far so maybe this time it will be different for you too ? Having said that I still wish I'd hung out for black but how many other 6 months old cars would have been out there with only 1,700 miles on the clock - hence my compromise.

Good luck in your search for the right solution, some will think you're mad changing so often but it's your money and you only live once, buy wisely with heavy negotiation and it limits the damage.

Spin
 
Thanks for the response's, Spin140 you sound exactly like me, the wife is not impressed and there will be some serious verbal contracts signed this time :)

ideally id like to keep the car 2 years, doing around 10k miles a year. Financing it myself is an option, ill have to look into that, thanks for the suggestions and i will keep people posted if their interested.

the only live once thing is coming home at the moment, was told i have a blood clot in a sack of blood round my lung last week an im only 25! :/
apprantly it is passed the serious stage and all is well but it was still a reality check...

Ta
MrSteve
 
mrsteve said:
Thanks for the response's, Spin140 you sound exactly like me, the wife is not impressed and there will be some serious verbal contracts signed this time :)

ideally id like to keep the car 2 years, doing around 10k miles a year. Financing it myself is an option, ill have to look into that, thanks for the suggestions and i will keep people posted if their interested.

the only live once thing is coming home at the moment, was told i have a blood clot in a sack of blood round my lung last week an im only 25! :/
apprantly it is passed the serious stage and all is well but it was still a reality check...

Ta
MrSteve
Click to expand...

Glad you're ok mate. Take the wife shopping before you tell her about the new car LOL - works for me. :)


I'm determined to keep mine for 2 years too if anything just to prove it can be done, time will tell...
 
if i take her shopping it could half my deposit :)

currently if i mention the word atom and/or ariel in the house i get hit, evidently we need to go on holidays and enough room for a packed lunch is not acceptable... neither is the line 'but we will get there quicker and have more time to hunt for shoes you could find at home quicker' :(
 
Spin140 said:
Glad you're ok mate. Take the wife shopping before you tell her about the new car LOL - works for me. :)


I'm determined to keep mine for 2 years too if anything just to prove it can be done, time will tell...
Click to expand...


Wish I could keep min for 2 years. The longest I have kept a car over the past 10 years is my crrent E class which I bought on 3rd March last year.

I'd be worth a fortune if I was in to kites or gardening rather than cars!!

M
 
Moisty said:
Wish I could keep min for 2 years. The longest I have kept a car over the past 10 years is my crrent E class which I bought on 3rd March last year.

I'd be worth a fortune if I was in to kites or gardening rather than cars!!

M
Click to expand...


I know what you mean, I used to argue that " I don't drink (much) or smoke so there are worst things I could spend my money on...." but I'd certainly be a lot better off, but hey I love cars, its an expensive hobby.
 
Spin140 said:
I know what you mean, I used to argue that " I don't drink (much) or smoke so there are worst things I could spend my money on...." but I'd certainly be a lot better off, but hey I love cars, its an expensive hobby.
Click to expand...


Well I live in hope that I can keep my A3 for 2 years (well I am sure her indoors does!)

But as I couldn't keep my Jag super V8 or my Alpina B3 conv or my M3 conv or my 355 spider for more than a year, I don't know why it should change now I have gone for an A3!!:)


M
 
A quick search shows that to borrow £27.5k over 3 years means with todays interst rates a monthly repayment of £855. So I guess that's your worst case scenario.

Of course with a PCP arrangement you aren't borrowing all that as there is a balloon payment at the end so it's going to be more like borrowing ~£16k (assuming 10k miles per year) which would be a repayment of about £550 per month. If you do more miles it will be higher (e.g. 20k/year will be more like £625 per month).

That's why £500 is hard for them to achieve.

Someone else might be able to check these numbers but that's how I see it anyway.

A good site that give this info very quickly without having to speak to a greedy saleman is the Lloyds TSB car select website. At the very least it will give you quotes of what you can take to a dealership to match (e.g. there's £1032 off a standard S3 at the moment - Some dealers don't even discount at all on S3s!!).
 
rich164h said:
A quick search shows that to borrow £27.5k over 3 years means with todays interst rates a monthly repayment of £855. So I guess that's your worst case scenario.

Of course with a PCP arrangement you aren't borrowing all that as there is a balloon payment at the end so it's going to be more like borrowing ~£16k (assuming 10k miles per year) which would be a repayment of about £550 per month. If you do more miles it will be higher (e.g. 20k/year will be more like £625 per month).

That's why £500 is hard for them to achieve.

Someone else might be able to check these numbers but that's how I see it anyway.

A good site that give this info very quickly without having to speak to a greedy saleman is the Lloyds TSB car select website. At the very least it will give you quotes of what you can take to a dealership to match (e.g. there's £1032 off a standard S3 at the moment - Some dealers don't even discount at all on S3s!!).
Click to expand...


Rich, I have just checked the numbers and agree with your findings.


M
 
I was going to suggest Marks and Spencer's car buyer plan (balloon/deferred payment plan), but it looks like they only go up to £20k.
If you're interested, £20k over three years would be £436 a month, with a balloon payment of £8k at the end.
 
An S3, reasonably loaded with extra's for less than £500 a month is easily achievable and is well documented on this forum.

Have a search around :icon_thumright:
 
I used freeway (now merged with Lex)
http://www.bankofscotlandfreeway.co.uk/

The spec of my car was just under £30k, and over 36 months, £1500 deposit, 15,000 miles per year I pay about £560 - this includes the maintenance plan, so all servicing, tax discs, tyres, etc, etc is covered.
Believe it or not, this work out less per month than what a company car would have cost me! Only thing I have to pay myself outside of that is the insurance, which to be honest I'm happy to hang on to that responsibility in order to keep my no claims!

Granted interst rates may have changed, but £550 should be realistic.
 
bowfer said:
I was going to suggest Marks and Spencer's car buyer plan (balloon/deferred payment plan), but it looks like they only go up to £20k.
If you're interested, £20k over three years would be £436 a month, with a balloon payment of £8k at the end.
Click to expand...


You are correct, I looked in to their service before but they only go up to £20k which it seems is not enough here.

Sainsburys bank is another that offer a PCP. They will go higher than £20k.

They tend to offer 8.9% if you buy the car from them (and they can generally discount, well £400 on the S3) or 9.9% APR if you buy it elsewhere.


M
 
jamiekip said:
I used freeway (now merged with Lex)
http://www.bankofscotlandfreeway.co.uk/

The spec of my car was just under £30k, and over 36 months, £1500 deposit, 15,000 miles per year I pay about £560 - this includes the maintenance plan, so all servicing, tax discs, tyres, etc, etc is covered.
Believe it or not, this work out less per month than what a company car would have cost me! Only thing I have to pay myself outside of that is the insurance, which to be honest I'm happy to hang on to that responsibility in order to keep my no claims!

Granted interst rates may have changed, but £550 should be realistic.
Click to expand...

With no extras, this will cost you £567 per month.

M
 
Moisty said:
With no extras, this will cost you £567 per month.

M
Click to expand...

Are you sure - I just did it:
Car with no options
£4000 deposit
10,000 mile per annum
36 months
Comes out as £412.23 per month

Here:
Contact Period36 months
Annual Mileage10,000
Price
£412.23 per month
9.9% APR
Price Breakdown
First Monthly Payment £4,135.00
This includes:

Your Deposit :£4,000.00
Credit Acceptance Fee :£135.00
Monthly Payment :£0.00
Followed by 35 monthly payments of :£412.23
Optional final payment of : Should you wish to retain the vehicle at the end of your agreement this is the amount you pay. £13,422.91 Payment breakdown based on £412.23 per month
Finance : £417.04 Vehicle Accessories You Have Selected :


--------------------------------------------------------------------------------

Metallic Paint£-4.81
--------------------------------------------------------------------------------
Maintenance :
This includes £0.00 VAT at 17.5%£0.00 Your car finance is based on the following
List Price :£27,230.00
Cash Price : This includes all discounts and road fund licence for the duration of your contract £26,806.08
Contract Type :pCP Credit Amount :£22,806.08 APR :9.9% Total Amount Payable :£31,985.96

The same specced up like my car - about £29,500 worked out as £565 without maintenance.
 
The only caveat with leasing is the leasing company itself, come 'handback' time.
Some of them can be right fussy beggars, seemingly wanting a car back in showroom condition.
You have to beware things like late services too.
Some of them will 'fine' you for things like that.
Hell, we've had one leasing company (Saab) bill us £400 for a missing remote central locking keyfob.
All very well, until you know the car involved didn't have remote central locking..
I've often been tempted to lease cars for the wife, but our handback experiences at work have always put me off.
We've had cars valetted, yet the collection blokes always mark the collection notes 'dirty'.
Really ****** you off.
 
http://www.dynamic-webs.co.uk/information/car_loan_calculator.html

Use the above to work out what's realistic and what is not.

S3 has a retained value of about 43%, so if your's cost you £32k, then in 36 months time it will be worth about £13k.

What car has it at around £10k, but this is where I believe PCP falls down and Lease Purchase is better, because with Lease Purchase although your final payment is not guaranteed, you have more flexibility in what it should be.

Also, if you are only going to keep the car for 24 months, and you sign up to a 48 month deal, then you can run the risk of a higher final payment, because your not going to go the full term length.

I would also recommend borrowing below £25k as all agreements are then defined as "regulated", therefore, if you want to settle early, you can do so with minimum penalties, as all agreements are governed by the Consumer Credit Act.

Have a good search on the internet for finance stuff, there is a LOT of information out there, but a lot of it comes down to your own personal circumstances. DO NOT just sign up for dealer finance though, because they CAN be negociated down, and if they wont, then there is ALWAYS another lender out there who will.

PM me if you want contact details for a good finance consultant.
 
SnAzBaZ said:
http://www.dynamic-webs.co.uk/information/car_loan_calculator.html

Use the above to work out what's realistic and what is not.

S3 has a retained value of about 43%, so if your's cost you £32k, then in 36 months time it will be worth about £13k.

.
Click to expand...


Crikey, I know what all the sites say but I would expect to get more than £13K for a 3 year old S3 - you only have to look at prices achieved by the previous model and this seems the case. Let's hope so anyway - Gulp !
 
jamiekip said:
Are you sure - I just did it:
Car with no options
£4000 deposit
10,000 mile per annum
36 months
Comes out as £412.23 per month

Here:
Contact Period36 months
Annual Mileage10,000
Price
£412.23 per month
9.9% APR
Price Breakdown
First Monthly Payment £4,135.00
This includes:

Your Deposit :£4,000.00
Credit Acceptance Fee :£135.00
Monthly Payment :£0.00
Followed by 35 monthly payments of :£412.23
Optional final payment of : Should you wish to retain the vehicle at the end of your agreement this is the amount you pay. £13,422.91 Payment breakdown based on £412.23 per month
Finance : £417.04 Vehicle Accessories You Have Selected :


--------------------------------------------------------------------------------

Metallic Paint£-4.81
--------------------------------------------------------------------------------
Maintenance :
This includes £0.00 VAT at 17.5%£0.00 Your car finance is based on the following
List Price :£27,230.00
Cash Price : This includes all discounts and road fund licence for the duration of your contract £26,806.08
Contract Type :pCP Credit Amount :£22,806.08 APR :9.9% Total Amount Payable :£31,985.96

The same specced up like my car - about £29,500 worked out as £565 without maintenance.
Click to expand...


Jamie, I was using your figures (S3, 36 months, £1500 deposit, 15,000 miles per year, full maintenance ).


M
 
Spin140 said:
Crikey, I know what all the sites say but I would expect to get more than £13K for a 3 year old S3 - you only have to look at prices achieved by the previous model and this seems the case. Let's hope so anyway - Gulp !
Click to expand...

Yes, I'm hoping this myself, but I think they tend to put a pessimistic figure in these calculations as they don't want to get their fingers burnt by doing the calculations on a value of say £18,000 and the car is only worth £15,000 when it comes back in!
 
Moisty said:
Jamie, I was using your figures (S3, 36 months, £1500 deposit, 15,000 miles per year, full maintenance ).


M
Click to expand...

Sorry for the confusion mate - I was working on the figures that MrSteve was looking at :)
 
thank you very much for the responses, i have leased a car in the past and had a fairly naff experience with them, obvious defect in paint job underneath the rear bumper which they walked straight up to and questioned, altho i used the 'if you want me to lease through you again' line and all was ok...

spoke to lloyds who have agreed 24k over 5 years at 460 per month at 6.4%, with the 4k deposit that should put me into decent specced demo's or a lesser specced new one.

I will enquire re leasing, some of those deals dont look half bad, may end up selling mine privately in that case though.
 
Spin140 said:
Crikey, I know what all the sites say but I would expect to get more than £13K for a 3 year old S3 - you only have to look at prices achieved by the previous model and this seems the case. Let's hope so anyway - Gulp !
Click to expand...

The Whatcar site quotes even worse figures than that! £27K new, £10,944 for a 3 year old one = 40.5%

Mines bad as well £33,626 new, £15460 for a 3 year old one = 46%

So i'd say that those figures where pretty slack.

J.
 
mrsteve said:
freeway with all my options brand new are at 492 per month, spot on.
Click to expand...

I dealt with Michelle Donnolley and Ruth Gordon when getting my car from freeway- they we're absolutely great to deal with - even with my millions of questions. Say hello from me if you deal with them.

The other thing to remember is they often can get you a better deal when you speak with them - arm yourself with prices you have found from dealers for the spec car you want and send them on to them - if you get a better deal and their supplier can't match it, they have no problem purchasing from your garage and pass the savings on to you.

JK
 
s3, black, armrest £95!!! i almost loathe using it, rear parking sensors, bucket seats, ipod connection, bose, multi function wheel, that should do me just fine.

seats are so expensive but they look excellent...

i will give them a call, ta for the advice.
 
I'd recommend the following too:
Interior Light Pack - adds a little something to the interior ambience
You going for the flat bottom wheel I hope????
Electric Lumbar offers that little bit more adjustment on the seats - some people complain that they can't get comfy.

Other than that, spec looks great - I love the buckets - I just couldn't justify them when I was looking!
You think the £95 for the armrest is bad - what about £55 for the sunband on the windscreen!!!!!

Pleasure on the advise - good luck and enjoy the wait for the car - nearly drove me mad!
 
makes spending 10 quid or even 20 quid on two pairs of sunglasses for the front two passengers that little bit more economical.

i did mean the flat bottom wheel, im justifying the seats in the, id rather have that than the nav, way,

the nav does look sweet but id rather get lost very comfortably than end up at my destination with only 99% of that comfort...

hmmm, now i say it...:detective2:
 
Plus you can get Nav retrofitted for £900 if you get someone to do EVERYTHING, or £400 if you do it yourself.

No lumbar support on the bucket seats, but, yes, they look great!
 
Wouldn't you be as well waiting a wee bit, see what happens to interest rates?
The BOE is under severe pressure to reduce them.
I note, for example, Marks and Spencer are currently charging 8.9% APR for their car buyer plan.
Their car buyer plans have always been a bit dearer than the market norm for conventional loans, but they're usually in the ball park.
Not this time though.
8.9% APR is way above some of the conventional loan rates going around (from about 6.4%).
Our current Marks and Spencer plan, taken out in May 2006, is a lot less than 8.9%.
I can't recall the exact figure, but it's nowhere near that.:no:
 
as i said earlier lloyds offered me 6.4, which considering i have a savings account at 6.2 (not with lloyds) i cant hope for much better than that :)

guess some banks taking a little risk, they do want people to lend money they just need them to spend it in the uk, rather than borrowing loads then taking it out of uk... im not going to pretend to understand this to the degree i would like but i think reasonable deals are out there to get, just got to be careful, but then when it comes to money, i, and im sure all here are careful all the time...
 
I was talking about the car purchase plan not a normal loan. I think the last personal loan I took out was at 5.6% or 5.1%, can't remember. Cheap though!
 
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