50/50 finance deal.
Discussion
Went in to Lancaster Reading today and was offered a 50/50 finance deal on a new V8 Coupe or a used one that was up to two years old.
Apparently you put down a 50% deposit, have a nominal monthly payment for either one or two years and then have a 50% balloon payment to pay at the end or use the car to settle.
I went in looking to spend around $50k on a used V8 but am very tempted with his offer as I can get a new car for the same amount of outlay. They are offering this deal on all new-2yr old cars.
Sounds good to me as I haven't seen this offered anywhere else but wondered what the general thoughts are on this type of deal?
Apparently you put down a 50% deposit, have a nominal monthly payment for either one or two years and then have a 50% balloon payment to pay at the end or use the car to settle.
I went in looking to spend around $50k on a used V8 but am very tempted with his offer as I can get a new car for the same amount of outlay. They are offering this deal on all new-2yr old cars.
Sounds good to me as I haven't seen this offered anywhere else but wondered what the general thoughts are on this type of deal?
if you can afford 50% down, then just do regular finance and pay for it over 2 years
no point in paying interest on the other 50% outstanding
thats what Id do anyway ...im not a "balloon payment" fan, I think its just a way of getting people to think they can afford something that traditionally they couldnt, and in the meanwhile, the finance company makes a bit more money out of you.....
no point in paying interest on the other 50% outstanding
thats what Id do anyway ...im not a "balloon payment" fan, I think its just a way of getting people to think they can afford something that traditionally they couldnt, and in the meanwhile, the finance company makes a bit more money out of you.....
I got lured into the same kind of great sounding deal with a 911 turbo 7 years ago.
The deal was £57k car putting £26k down, £420/pcm for 48 months, £28k balloon
4.5yrs later, sold car privately for £24k (offered £18k px) so ended up £4k in negative equity and lost my deposit.
I personally think you'll really regret it and "could" say goodbye to your £50k if your not careful.
Buy one you can pay for, save the difference towards your next one.
The deal was £57k car putting £26k down, £420/pcm for 48 months, £28k balloon
4.5yrs later, sold car privately for £24k (offered £18k px) so ended up £4k in negative equity and lost my deposit.
I personally think you'll really regret it and "could" say goodbye to your £50k if your not careful.
Buy one you can pay for, save the difference towards your next one.
michael gould said:
Sorry I'm old school ......if you can't afford to write a cheque out for it ,you can't afford it.....that's why I drive a 6 year old DB9 
Do you have a mortgage? Is that not the same principal? Nowt wrong with finance if you're happy to pay extra to get something early - I for which am George H said:
Do you have a mortgage? Is that not the same principal? Nowt wrong with finance if you're happy to pay extra to get something early - I for which am
A house stands more chance of being an appreciating asset than a luxury car. They also tend to be a longer term purchase that you live in...Anyway, you live with your parents so your opinion on these subjects doesn't count
George H said:
...I for which am
Bye gum Georgeous, what the heck does that mean ?? Poor English with no syntax. Ecky Thump will be turning in his grave !!OP's dilemma appears a straightforward one - it's only finance !! It's an interesting twist on the usual formula. Do the maths and see what the final figure comes out at. As Bogie intimates, appraise the standard route and see what that figure comes to. Then make your decision.
All subject to a benign credit rating, of course
Edited by Jockman on Tuesday 24th January 06:45
S1M VP said:
I got lured into the same kind of great sounding deal with a 911 turbo 7 years ago.
The deal was £57k car putting £26k down, £420/pcm for 48 months, £28k balloon
4.5yrs later, sold car privately for £24k (offered £18k px) so ended up £4k in negative equity and lost my deposit.
I personally think you'll really regret it and "could" say goodbye to your £50k if your not careful.
Buy one you can pay for, save the difference towards your next one.
Blimey, The deal was £57k car putting £26k down, £420/pcm for 48 months, £28k balloon
4.5yrs later, sold car privately for £24k (offered £18k px) so ended up £4k in negative equity and lost my deposit.
I personally think you'll really regret it and "could" say goodbye to your £50k if your not careful.
Buy one you can pay for, save the difference towards your next one.
that finance deal is muchos expensive, by my calculations the total cost for having Porker for a mere 4.5 years is £50,160...(you lose the deposit, the monthly payments and the £4k off the balloon) and you have nothing to show for it by the end of the 4.5 years, that's a whopping £11.1k a year for the privelege. I'm in Mr Gould's boat here, if you don't have the wonga in your current account, step away from the shiny piece of aggressive metal.
Buy cash. No weight around your neck and no feeling of 'being had' every time you look at your car, or get into it. I love the feeling that I truly own my cars. Finance seems attractive but you always end up paying more. I did finance once on a 997, never again, it just plain spoilt the ownership experience. Get a slightly older one that's in great condition. Even a brand new car is a used car the moment you've driven it away from the dealership.
George H said:
michael gould said:
Sorry I'm old school ......if you can't afford to write a cheque out for it ,you can't afford it.....that's why I drive a 6 year old DB9
Do you have a mortgage? Is that not the same principal? Nowt wrong with finance if you're happy to pay extra to get something early - I for which am The deal itself does not sound particularly revolutionary. Once you are dealing with asset finance at this level, a decent broker should be able to tailor a plan towards small/large baloon, small/large monthlies, small/large intitial, long/short, etc
But any individual who takes out any plan that at the very least does not guarantee the value at the end will be at least equivalent to the balloon (which almost certainly means the balloon needs to be a little less than 50% of purchase, on 3yr or longer agreements) is surely taking a big risk
Whilst I personally pay for my cars outright, if there is that guarantee at the end, then the buyer is not doing anything foolish and it comes down to personal preference
BingoBob said:
Plus you get a better deal when you pay cash. I realise that a loan is a necessary evil but are you not better off getting a private consumer loan to finance the car, rather than finance the car itself?
Not necessarily. In fact often, it is the commission on the finance that makes the deal attractive to the dealerThe finance company pays the dealer outright from the outset so the dealer gets paid in full regardless. The fiance company tkaes the risk, nto the dealer. Dealers will normally push a specific finance co/broker in return for a kick back. So almost certianly, the dealer will prefer finance evry time (providing it goes through quickly/smoothly)
When you get a firm like say 'Ford Credit' or 'VW Finance', it is actually either a firm owned by a major credit house, nothing to do with the manufacturer or a completely separate segregated co. run by the car manufacturer at arms length. Either way the dealer and the manufacturer are kept separate to the finance arm
Hi AMFAN, yours truly was in the motor trade for some 23 years. My advice to you would be."Don't do it" If you have 50K to spend on an Aston I would wager that you could probably find another 5K, that would more than likely buy you a car with a screen price of 60K. Even if you had to do a small amount on finance interest rates are so low at the moment. Check the ads £60,000 will buy you quite a new car with all its initial depreciation gone. I would be very confident that the factory are bunging big bonuses to the dealership network to help move new stock, hence the current rabid depreciation on new cars.
The other point is that you will be able to sleep at night for the simple reason that you will OWN a car wth masses of equity .
On a lighter note we are on our second, I still spend time sitting in it of an evening clutching a glass of wine and thinking how lucky I am.
The other point is that you will be able to sleep at night for the simple reason that you will OWN a car wth masses of equity .
On a lighter note we are on our second, I still spend time sitting in it of an evening clutching a glass of wine and thinking how lucky I am.
jonby said:
Not necessarily. In fact often, it is the commission on the finance that makes the deal attractive to the dealer
Indeed. It's been a long time since cash was king. You don't even get a discount on a washing machine for cash now. Have you seen how much a bank charges a Dealer for paying in cash !!I've no problem with somebody taking out a loan to finance a dream, so long as the risks are thought through. We've all taken out business loans to finance, say, a machine that will essentially depreciate in value but will reward us in other ways
Jockman said:
I've no problem with somebody taking out a loan to finance a dream, so long as the risks are thought through. We've all taken out business loans to finance, say, a machine that will essentially depreciate in value but will reward us in other ways
Tad different though as you (should) get a return on the investment and can offset the spend against tax.OP needs to weigh up the cost of ownership and risk as you say.
I kind of agree with the "if you can't afford to write the cheque...." mantra. However there are times when the deal is very good purely on a maths basis, and the money is better of kept in the account / invested.
I too looked at the 50/50 deals but the numbers just didn't stack up so purchased a different car
Example of it working - a new BMW on one of their cheap lease deals - the year 1 depreciation alone would be more than the total lease costs, plus RFL and servicing isn't my problem.
Just a thought....
I too looked at the 50/50 deals but the numbers just didn't stack up so purchased a different car
Example of it working - a new BMW on one of their cheap lease deals - the year 1 depreciation alone would be more than the total lease costs, plus RFL and servicing isn't my problem.
Just a thought....
AMFAN, I have had a thought. Try calling Rachel at Broughtons in Cheltenham; Tel No. 01242 232667. They currently have 2 x V8's in stock within your grasp. Ironically one of them was ours. Registered in 2011 with a monster spec including carbon front splitter and diffuser. It even has a sports exhaust. That car was much loved and cherished plus meticulously run in. The service, help and advice offered by Rachel was superb.
Go on, you know it makes sense!!!
Go on, you know it makes sense!!!
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