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Kryton
Spa-Francorchamps


Joined: 05 Mar 2005
Posts: 262
Location: Coniston, Lake District


PostPosted: Thu Nov 30, 2017 3:42 pm    Post subject: Reply with quote

squelch wrote:
Kryton wrote:
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 Smile
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991.2 GT3, full Club Sport pack
2Lt 718 Cayman (weekday drive)
 
  
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chrisbill86
Trainee


Joined: 15 Dec 2013
Posts: 84
Location: Milton Keynes


PostPosted: Thu Nov 30, 2017 3:56 pm    Post subject: Reply with quote

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.
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squelch
Silverstone


Joined: 05 Jun 2016
Posts: 130
Location: Bucks


PostPosted: Thu Nov 30, 2017 3:58 pm    Post subject: Reply with quote

Kryton wrote:
squelch wrote:
Kryton wrote:
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 Smile


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.... Very Happy
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From Stuttgart: 997 GTS, 996 C4S
From Munich: S54 & S50 M Coupes, 535d M Touring, and a couple of bikes from Italy and Germany
 
  
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G2
Nürburgring


Joined: 26 Oct 2015
Posts: 408



PostPosted: Thu Nov 30, 2017 9:33 pm    Post subject: Re: Buying a 100k+car Reply with quote

Bikeracer1098 wrote:
HSC911 wrote:
Bikeracer1098 wrote:
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 wrote:

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
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991 C4S - Riviera.
 
  
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G2
Nürburgring


Joined: 26 Oct 2015
Posts: 408



PostPosted: Thu Nov 30, 2017 9:59 pm    Post subject: Reply with quote

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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