Finance for a used EV?

[Yomamaisasnowblower]

Considering financing a purchase for a used EV, circa 30k for a daily driver. Does anyone know or have any experience of finance providers that are better for this type of vehicle? Seems pretty expensive at the minute given their recent rapid depreciation. Thanks.

[TheDeuce]

They're not going to look at depreciation for what is essentially just a personal loan. Just head to money supermarket and see who will lend you the 30k at what rate - then extend the loan term to make the monthlies fit your budget.

Say you borrow 30k over 6 years, repayment probably £470ish a month, the loan balance should safely reduce as quickly as the car depreciates, so you can sell the car and settle the loan whenever you wish.

[Glosphil]

Do you need to borrow the whole £30k? A friend just borrowed £15k towards a £25k car &, strangely, the interest rate dropped when he upped his contribution from £5k to £10k.

[mclwanB]

Move to Scotland and get the interest free 5 year loan? Its worked well for us

[The Road Crew]

mclwanB said:

Move to Scotland and get the interest free 5 year loan? Its worked well for us

Scheme is currently closed to new applications sadly, I tried for it a few weeks ago.

[Yomamaisasnowblower]

It is kind of a hard one, yes I could stump up more in cash with a smaller loan or pay in full. However there are some finance places doing used PCP schemes which would work if payments were right.

On top of that, I could lease a new one for 2 years for about 13k.

[covmutley]

I recently bought a polestar 2 using pcp through oracle car finance. They were good to deal with

[Fusion777]

TheDeuce said:

They're not going to look at depreciation for what is essentially just a personal loan. Just head to money supermarket and see who will lend you the 30k at what rate - then extend the loan term to make the monthlies fit your budget.

Say you borrow 30k over 6 years, repayment probably £470ish a month, the loan balance should safely reduce as quickly as the car depreciates, so you can sell the car and settle the loan whenever you wish.

Having a car loan for 6 years though :/

[Yomamaisasnowblower]

covmutley said:

I recently bought a polestar 2 using pcp through oracle car finance. They were good to deal with

What was the deal like if you don't mind me asking? Thanks.

[covmutley]

I was one of the people on here who took advantage of the high GFV (car 36k, finance company said worth 31k after 2 years and 30k miles) briefly available at the time.

I think rate is about 9% and I paid £1k down and £430 a month. Pretty good for 15k miles a year.

[FBR2020]

Fusion777 said:

Having a car loan for 6 years though :/

Not really much different to the huge number of folk with a 3 year PCP that still has a balloon at the end that's equivalent to half of the original price.

[J1990]

TheDeuce said:

They're not going to look at depreciation for what is essentially just a personal loan. Just head to money supermarket and see who will lend you the 30k at what rate - then extend the loan term to make the monthlies fit your budget.

Say you borrow 30k over 6 years, repayment probably £470ish a month, the loan balance should safely reduce as quickly as the car depreciates, so you can sell the car and settle the loan whenever you wish.

That's true when looking at an unsecured loan, however if you're going through a car finance broker (such as Oracle) then you may find that you can get a relatively competitive used-PCP deal against the vehicles. A few months ago quite a few people managed to snag Polestar 2 Long Range versions, I-Paces and I think a few E-Trons all for <£400/month. Full disclosure, this is because one of the funders was still funding against the 'old' predicted future values, however the price crash that happened at the start of the year meant that a lot of these cars were currently within a few thousand of those values predicted for 2-3 years time. It basically made them an interest-only purchase over 3 years.
Whilst you're unlikely to find that deal again, if you're wanting to focus on the monthly payment then this is an option... Though anything other than a 25k personal loanis probably looking at a nasty APR.

[TheDeuce]

J1990 said:

TheDeuce said:

They're not going to look at depreciation for what is essentially just a personal loan. Just head to money supermarket and see who will lend you the 30k at what rate - then extend the loan term to make the monthlies fit your budget.

Say you borrow 30k over 6 years, repayment probably £470ish a month, the loan balance should safely reduce as quickly as the car depreciates, so you can sell the car and settle the loan whenever you wish.

That's true when looking at an unsecured loan, however if you're going through a car finance broker (such as Oracle) then you may find that you can get a relatively competitive used-PCP deal against the vehicles. A few months ago quite a few people managed to snag Polestar 2 Long Range versions, I-Paces and I think a few E-Trons all for <£400/month. Full disclosure, this is because one of the funders was still funding against the 'old' predicted future values, however the price crash that happened at the start of the year meant that a lot of these cars were currently within a few thousand of those values predicted for 2-3 years time. It basically made them an interest-only purchase over 3 years.
Whilst you're unlikely to find that deal again, if you're wanting to focus on the monthly payment then this is an option... Though anything other than a 25k personal loanis probably looking at a nasty APR.

My logic has always been to simply extend the term of the loan to bring the monthlies into budget, and then trust that the loan balance will reduce at least as fast as the car depreciates, which it always has. Probably because when I buy a car that way it's nearly always 2-3 years old so it's taken its big hit of depreciation already.

Normally I find it works out cheaper overall than PCP. Also, you can sell the car and settle the loan whenever suits, rather than have to negotiate rates to potentially extend a PCP - assuming you won't have the final payment funds just sat there..

You also don't need a deposit.