Finance question

[Soulboy]

I paid cash (£22,340) for my R in September 2003 and am looking at what I may get back if I sell it privately now (minmum £16k ish).

It has therefore cost me IRO £4k pa (including loss of interest on the £22k). This equates to £339 pm.

Just out of interest, what were the costs for anyone who has got their car on finance (lease purchase/hire purchase/pcp etc)?

This thread may help us decide how best to finance our next cars.

[Smudge]

I normally go the PCP route, and try to work on around a 10% deposit & higher payments, just to keep the Ballon low & also to negotiate on the interest, normally creating my own little dutch auction. At current deal is at 6.6%apr & monthly payments ar £575 a month.

[Soulboy]

[ QUOTE ]

I normally go the PCP route, and try to work on around a 10% deposit & higher payments, just to keep the Ballon low & also to negotiate on the interest, normally creating my own little dutch auction. At current deal is at 6.6%apr & monthly payments ar £575 a month.

[/ QUOTE ]

If you are willing to disclose Smudge - how much was the initial payment and what are you expecting the balloon to be?

Doing it cash, and being a high mileage driver (18,000 pa) I reckon it will cost me £4k pa (£340 pm). I am really interested to know how this compares to other methods.

[TP27]

I bought mine ex-Demo (full spec) and put down a decent deposit and HP'd the rest over 36 months. Repayments were c.£450 pcm which was manageable. I sold the car (through TSN) last month (and miss it TBH!).

[Smudge]

[ QUOTE ]

If you are willing to disclose Smudge - how much was the initial payment and what are you expecting the balloon to be?

[/ QUOTE ]

I can't recall the final figure, but I'll check for you & post it up when I find it. Deposit = £2k.

[gino128]

From what I have seen, without doubt, personal lease or contract hire is the cheapest method. I have been looking at a variety of cars for the new business and contract hire comes up cheapest always - even with c15k miles p.a. on them.

I would imagine that a personal lease with only VAT on top will always be cheaper than a PCP.

My friend works for one of thre big car finance houses and says you should never put more than £500 down on a car as it is effectively dead money.

With the balloon and interest payments being fiddled around with so much on PCP's, you will almost always lose your deposit somewhere in the deal (low deposit, higher i/r, high deposit, lowe i/r) so that the dealer effectively takes your deposit as a cash bonus...unless you blackmail them to give you a good deal or walk away!!

I am looking at a brand new Z4 2.0i SE with 20k miles p.a. on for only £325 p.m.!!! Now that is not a bad deal. For personal simply add VAT!!

[Soulboy]

[ QUOTE ]

I bought mine ex-Demo (full spec) and put down a decent deposit and HP'd the rest over 36 months. Repayments were c.£450 pcm which was manageable. I sold the car (through TSN) last month (and miss it TBH!).

[/ QUOTE ]

So how much did it actually cost you (per month) over the time you had it TP?

This is what I am trying to get at, through all the smoke and mirrors of finance deals.

[TP27]

I'll send you a PM.

[R32North]

I did the old LP Balloon payment option over 40 months!

Car was £23k in Oct 2003 (got a very good trade in so no chance of knocking anything off the forecourt price)

£5500 Deposit

£7400 Ballon

£342 pcm

9% APR, which is high, but its with VW finance

As long as I can get around £12k for mine when the deal is up Ill get most of my deposit back.

Currently a about a £1k loss.

I'll either finance the next car the same way or I'll opt to pop it on the mortgage was I'm going for a mortgage product with a draw-down reserve type facility - plenty of equity in the current house t do that.

[Soulboy]

Hmmmm. Still seems more expensive than buying for cash - or getting a cheap loan (remortgage ) to fund it.

Ive also heard of a few horror stories with finance, where people are charged extortionate amounts for a few stone chips at the end of the term, or for being a bit late with a service etc.

[Mook]

The one thing that everyone is missing of their figures here is what is the real cost of the car when it's on finance, whatever method you've chosen.

If you're paying £X per month over 36 months, what is the difference between the cost of the car and the additional money, i.e. the interest and other charges made by the finance companies?

[Soulboy]

[ QUOTE ]

The one thing that everyone is missing of their figures here is what is the real cost of the car when it's on finance, whatever method you've chosen.

If you're paying £X per month over 36 months, what is the difference between the cost of the car and the additional money, i.e. the interest and other charges made by the finance companies?

[/ QUOTE ]

[ QUOTE ]

So how much did it actually cost you (per month) over the time you had it TP?

This is what I am trying to get at, through all the smoke and mirrors of finance deals.

[/ QUOTE ]

[R32North]

[ QUOTE ]

Hmmmm. Still seems more expensive than buying for cash - or getting a cheap loan (remortgage ) to fund it.

Ive also heard of a few horror stories with finance, where people are charged extortionate amounts for a few stone chips at the end of the term, or for being a bit late with a service etc.

[/ QUOTE ]

Not sure I get you SB. I don't have any of that sort of thing! The car is mine once I pay the final Balloon, no charges, no maintenace, etc, no mileage restrictions, waivers, etc to worry about.

I'm not hiring the car.... just HP with a Ballon at the end.

[Soulboy]

Sorry, I think those potential problems are with contract hire, not lease purchase.

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

Anyway, bottome line.

If I sell mine now, it will have cost about £340 pm (IN TOTAL) over the 2 years I've owned it.

That is with 37k miles on the clock and assuming I now sell it for £16k.

[Golfgirl]

My car was £22,500... I put down a £3,500 deposit (my old car as PX), pay £371 per month and have a £7,500 final payment at the end of 4 years.

[v6tas]

Apologies for the late night post and the fact ive had a couple, but in response to the above, "who really cares" ? It doesnt matter what car you buy, top of range or bottom, cars lose you money. R32 (MK4) owners are lucky its a limited edition model and can assume they will get a good private sale or good trade in if kept in good nick. There have been many posts on TSN about "how much is my car worth" or "what will i get as a trade in". IMHO its irrelevant as you must expect to lose money. As i did, you buy an R32 for 21k and when its time to sell ill probably lose a minimum of 5k. Big bucks but bucks that i was well aware of when i bought it. Weve all originally spent around 20k on lovely cars so lets just enjoy them and not worry about the money loss. If your worried about the money loss then why buy a 20k performance car.....? I hear bus services are improving these days !

[Soulboy]

[ QUOTE ]

"who really cares" ? It doesnt matter what car you buy, top of range or bottom, cars lose you money.

IMHO its irrelevant as you must expect to lose money.

[/ QUOTE ]

You are missing the point.

I am thinking of the best way to buy my next car (and hopefully helping others!) and was using the R as a real life example.

But, if you are not bothered, you could also go out and look for the most expensive mortgage deal when you buy your next house as well. Cause it doesn't matter - its still a nice house - even though it does cost twice as much.

[R32Ash]

I paid cash for mine too.

I bought it at six months old from a VW dealer, for £21,700 including a free service which is now due - so call it £21,500 for the car?

I'm very interested to see what conclusions can be drawn from the various ways of buying. I keep thinking it might have been better not to pay cash, and instead perhaps use another method.

To be honest I never even thought about PCPs. I just assumed that sort of thing would be an expensive solution...

[paulwbriggs]

Unless there is a special low finance deal, cash, if you have it, will almost certainly be the cheapest form of finance, as the cost will be the forgone interest. With the very low current base rate, further diminished by your marginal personal tax rate, the "lost" investment interest is negligible. Of course there are many other considerations such as your attitude to risk (could the capial sum be invested in a higher yielding, higher return investment) and your need for liquidity (might you need cash in the future and have you exhausted it all). But, in simple terms if you've got cash swilling about in deposit accounts compare the net-of-tax interest forgone to the APR of any finance deal to find the cheapest cost of capital.

However, a much more vexing question for me is do I cancel my current GTI order for an R32? 3 of the options I have selected (Xenons, 18" wheels, Highline) are standard on the R32 and this is making it tantalisingly tempting!

[Smudge]

[off topic]With the fear of going off topic Paul, I would answer a simple yes. I've driven over 100k miles in an R32 & I had a MkV GTi as a loaner when I took delivery of my last R. Although the GTi was fun, it wasn't 3.2ltrs of fun. Take a test drive mate, it's the only way to tell. [/off topic]

[Soulboy]

Anyone got anything new to add to this thread with regard to what they have been offered to buy a mkV?

A few comparisons may help us all hammer out the best deal possible.