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Buying a 100k+car

Bikeracer1098 said:
On a £150k car the ballon payment will probably be £100k

:eek: F**k me, really :?

This is why I have a 996 and not a 991 :sad:

I'm just a poor boy, nobody loves me...


:thumb:
 
Bikeracer1098 said:
HSC911 said:
Bikeracer1098 said:
How does a 2% mortgage ever become more expensive than a 6% loan?

My understanding of that:

IF you pay the borrowed (car) amount over 20 odd years and NOT pay it within the same time frame as the 6% loan :dont know:

:thumb:

Exactly, simple mathematics, no science behind it 👍

Why I think he was doing was comparing paying the capital back within 4 years rather than 25years which is like comparing apples with oranges. Also will be paying the 6% interest on the ballon payment for 4 years etc. So the loam is actually never fully payed unless the lump sum (ballon payment) is paid at the end of the term. On a £150k car the ballon payment will probably be £100k

I should've clarified when I mentioned drawing on a mortgage as a cheaper way, that you'd need to make the relevant overpayments to clear the extra borrowing in the same timescale as the dealer's finance. If you're able to do that and pay the same monthly payments that you would've been paying at the higher dealer rate (on top of your original mortgage amount obviously - which you can afford otherwise you wouldn't have been considering OPC finance in the first place, hopefully), then you would also chip away at your overall mortgage balance too - bonus! The usual caveat would be that your home would be at risk if you failed to make the payments - but I'd like to think we're all responsible enough with our finances not to risk that for the sake of some shiny new metal!!

Horses for courses, really. PCP's do work for some people - eg receiving a healthy car allowance and happy to "rent" a new car every few years and not worried about not owning it at any point (without "buying" it with the balloon). As a way to owning your new pride and joy? I'm not so sure.

It helps to have a good finance man on side too (and I'm not sure the car salesman falls into that category).
 
Would not purchase a car if I had to use finance, possibly an age thing :dont know:
 
Kryton said:
Would not purchase a car if I had to use finance, possibly an age thing :dont know:

Likewise - although when I bought the 997 it was a toss-up between buying that and paying off the mortgage. The GTS won the toss and is now sat in a garage that the bank still owns :floor:
 
Kryton said:
Would not purchase a car if I had to use finance, possibly an age thing :dont know:

Same. I'd only buy one (with cash) if I could afford to buy it twice.
Mos' def an age thing, yo (added in a poor attempt to hide his age)
 
squelch said:
Kryton said:
Would not purchase a car if I had to use finance, possibly an age thing :dont know:

Likewise - although when I bought the 997 it was a toss-up between buying that and paying off the mortgage. The GTS won the toss and is now sat in a garage that the bank still owns :floor:

I'd have paid the Mortgage off first and bought an old banger :)
 
With a lesser car I would be tempted to use a PCP, isn't there a bit of a get out if you've paid back over half the amount you can just hand the car back even if it's in negative equity.

I bought my 911 (15 plate) on a PCP. I put down enough to make the monthly payment what I wanted. With a car like this and being second hand you avoid the huge VAT payment which means that each payment I make I'll get something back out the other-side.

My old 997 was £600 a month, and I got back £525 once I sold it, effectively it was £75 a month.

Yes there is the rule of buy what appreciates and lease what depreciates however in my view if the money is going into an equitable asset and the maths makes sense I'd rather the money go into the car than just spending it on Gin and Meals out!

My bridging car which was a new of the forecourt S3 was £425 a month of depreciation and I had to pay £4k down and £2k to close it down the other side. I should have waited for the paid back half clause, but I wanted the 911 and I'm impatient.

I could see why PCPs could be the next PPI, irresponsible lending poorly explained economics I wonder who is laughing more, the finance companies or the dealers.
 
Kryton said:
squelch said:
Kryton said:
Would not purchase a car if I had to use finance, possibly an age thing :dont know:

Likewise - although when I bought the 997 it was a toss-up between buying that and paying off the mortgage. The GTS won the toss and is now sat in a garage that the bank still owns :floor:

I'd have paid the Mortgage off first and bought an old banger :)

It was a close run thing but with rates so low I thought I'd just leave it. If / when interest rates rise to a point I lose sleep I'll have a re-think, unless the right GT3 falls in my lap.... :D
 
Bikeracer1098 said:
HSC911 said:
Bikeracer1098 said:
How does a 2% mortgage ever become more expensive than a 6% loan?

My understanding of that:

IF you pay the borrowed (car) amount over 20 odd years and NOT pay it within the same time frame as the 6% loan :dont know:

:thumb:

Exactly, simple mathematics, no science behind it 👍

Why I think he was doing was comparing paying the capital back within 4 years rather than 25years which is like comparing apples with oranges. Also will be paying the 6% interest on the ballon payment for 4 years etc. So the loam is actually never fully payed unless the lump sum (ballon payment) is paid at the end of the term. On a £150k car the ballon payment will probably be £100k

I knew when I typed that I would need to provide a full spreadsheet and appendix with the assumptions :frustrated: but it is a car forum :floor:

You are right to question it....Simple answer = Time

I did reference "TOTAL INTEREST" as a rough calculation and stayed away from the monthly payment etc as it would have ended up at 3 pages. Same reason I did not mention inflation etc.

My point was to illustrate that mortgage term is important and roughly where the cut-off for the amount of interest was. I thought that was clear, but maybe it isnt. I should have said 4 years on the finance.

Bikeracer1098 said:
With regards to pension tax relief it is possible to effectively get 60% tax relief on the portion of salary between £100k - £120 rather than 40%
Sorry. Mixing up income tax rates with effective tax relief. Thanks for correcting that :thumb: Hence why I pay an IFA to do my maths. :frustrated:
 
For anyone new to car finance, watch out for how the interest rate is presented. Some show AER, some show APR, some show % over Finance House Base rate. All are % interest rates but not all are the same.

Ask for an APR rate in writing from any funding source and compare based on that...

Sorry if this is simplistic or obvious, but I've seen a few mates not realise this....
 

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