Car financing...

[Riz_RS4]

How do you mean?

Compared to what?

Well i was offered 5.0% from the VW Dealership in Chesterfield..... got it knocked down to 3.8% [img]images/graemlins/wink.gif[/img] on a sum of £20,000 over 3,4,5 years.

The deal fell through because they wanted me to take delivery of the car the week after..... [img]images/graemlins/confused.gif[/img]

So i began to ring other dealerships to secure the car i wanted as there was only 2 left in that specification.

I had £1000 burning a hole in my pocket waiting to go to the dealer who came back to me with a March 04 delivery.

Found one who beat what the chesterfield dealer offered [img]images/graemlins/smile.gif[/img]

3.75% over 3,4 years
3.5% over 5 years

And the important part was they were willing to hold my car until March 1st for the new 04 plates [img]images/graemlins/jump.gif[/img] wooohoooo!

This is also after the intrest rate increase from the bank of england.

Just look around and see what other dealers can do for you?

Riz [img]images/graemlins/s3addict.gif[/img]

[Gareth]

Riz M8 I think you're getting your numbers a little mixed up [img]images/graemlins/confused.gif[/img]

There is no way in million years that you are talking about APR %. The figures you are quoting are the Flat rate which you have to times by a factor of (approx) 2.1 to get the real interest rate i.e. the APR

For example;

The 3.8% you got offered at the dealer in Chesterfield would be equal to c. 7.98% APR...about 2% above what you can get from Lombard/Sainsburys/Tesco etc.. [img]images/graemlins/blush.gif[/img]

And the 3.5% flat rate you got over 5 years (if that's the deal you signed up for) would actually equate to c.7.35% APR.. [img]images/graemlins/033102scull_1_prv.gif[/img]

Could have done much better than that with some shopping round [img]images/graemlins/boohoo.gif[/img] [img]images/graemlins/frown.gif[/img]

[Riz_RS4]

Ooooooops [img]images/graemlins/033102scull_1_prv.gif[/img]

[img]images/graemlins/roflmao.gif[/img] nevermind huh...

Riz [img]images/graemlins/s3addict.gif[/img]

[Jon]

sorry I missed this thread (been on an island with no internet for 2 weeks)...if anyone wants cheap finance give me a shout.

[martian]

The figures you are quoting are the Flat rate which you have to times by a factor of (approx) 2.1 to get the real interest rate i.e. the APR

For example;

The 3.8% you got offered at the dealer in Chesterfield would be equal to c. 7.98% APR...about 2% above what you can get from Lombard/Sainsburys/Tesco etc.. [img]images/graemlins/blush.gif[/img]

And the 3.5% flat rate you got over 5 years (if that's the deal you signed up for) would actually equate to c.7.35% APR..

According to your calculation Lombard/Sainsburys/Tesco etc lend money under base?
Errr .... I don't think so.
Alliance and Leicester APR is 6.7%- if you divide that by 2.1 that's a base rate of 3.19%-ie over half a percent under base.
Am I missing something here?

[Gareth]

The figures you are quoting are the Flat rate which you have to times by a factor of (approx) 2.1 to get the real interest rate i.e. the APR

For example;

The 3.8% you got offered at the dealer in Chesterfield would be equal to c. 7.98% APR...about 2% above what you can get from Lombard/Sainsburys/Tesco etc.. [img]images/graemlins/blush.gif[/img]

And the 3.5% flat rate you got over 5 years (if that's the deal you signed up for) would actually equate to c.7.35% APR..

According to your calculation Lombard/Sainsburys/Tesco etc lend money under base?
Errr .... I don't think so.
Alliance and Leicester APR is 6.7%- if you divide that by 2.1 that's a base rate of 3.19%-ie over half a percent under base.
Am I missing something here?

I think you are missing something here....if you re-read my post you will se that I said "times by c.2.1" not "divided by 2.1" [img]images/graemlins/grin.gif[/img]

I think you need new glasses or calculator old chap [img]images/graemlins/biggrin3.gif[/img] [img]images/graemlins/033102bigblink_1_prv.gif[/img]

[martian]

No, no, no.....
You originally said ' times the flat rate by 2.1 to get the APR'- so logically by your calculations, if an APR is divided by 2.1 then that will take you back to the flat rate- so this does'nt explain how these lenders are lending under base!
I'll lend you me glasses and calculator [img]images/graemlins/thumb.gif[/img]

[Riz_RS4]

Ok guys lets do this the easy way....

My car fianance on £20,000 over 60 months at 3.75% works out to £395.83 per month.

Total repayable = £23749.80

Total intrest = £3749.80

Intrest per year = £749.96

Seem`s simple to me....... and it was cheaper than a loan from the bank which came in at £410 per month approx.

Remember the bank of england will push intrest rates up again, or so i hear.

Riz [img]images/graemlins/s3addict.gif[/img]

[DuncS3]

Remember the bank of england will push intrest rates up again, or so i hear.

Riz [img]images/graemlins/s3addict.gif[/img]

Very likely Riz - but most loans are fixed at the rate they are taken out arent they - Based on the figures you have given above, yours works out about 7.0% APR I think.

Dunc [img]images/graemlins/s3addict.gif[/img]

[Riz_RS4]

yours works out about 7.0% APR I think.

Cheers Dunc.... ive never really understood this "fixed rate" and APR [email]cr@p...[/email] either way the monthly repayment remains the same figure every month.

I cant wait to pick it up..... [img]images/graemlins/laugh.gif[/img]

Riz [img]images/graemlins/s3addict.gif[/img]

[daddyjohal]

Have to disagree here.

Why would you want potentially all your capital tied up in sure fire depreciating asset i.e. the car?? [img]images/graemlins/spineyes.gif[/img] Plus if/when you need/want to get out of it you have get it done asap (and potentially for less than market value) if need the capital elsewhere [img]images/graemlins/tongue.gif[/img]

It makes more sense to secure an attractive finance arrangement that suits your own personal situation.

Just my (financed at low rate) 2p's worth.. [img]images/graemlins/nodder.gif[/img]

Er, don't quite get that idea. I think you'll find whichever method you use to fund your car, it'll depreciate the same! So let's say you take out finance for your car, it's still gonna depreciate by the same amount as if you bought it cash, but now you're paying stupid amounts of interest to the bank or finance firm and you're only earning a pathetic amount of interest in the bank. Besides property, there aren't many sure fire ways of getting a decent return on money nowadays, but you are GUARANTEED to pay the interest on the car. There's no agreeing or disagreeing here, it's plain and simple maths.

Want proof? Ok. Ford make their profits by borrowing money from banks to build the cars they then sell to the public on finance, but they charge the public more than the banks charge them. Simple. They make a greater return out of you than the banks or other forms of investment would give them, so by financing your car you are paying over the odds.

with respect I think you've missed my point here [img]images/graemlins/tongue.gif[/img]

1. I was not saying that if you finance a car it will depreciate any different to the rate if you had purchased it outright for cash.

2. Who said anything about "stupid amounts of interest"?? If you take a balanced payment finance package and secure a good deal you would be paying a rate similar to mortgage rate. To me that is anything but "stupid amounts"

3. Didn't say anything about putting the amount spent on car in a bank instead [img]images/graemlins/confused.gif[/img] Quite obviously the return on your investment there is pathetically low.

Overall my comments were referring to the fact that most cannot/will not pay in full with cash for a car as they don't have the funds to do. If you do, then that's great and I'm sure that's what you'll feel comfortable doing. For me as I own two properties (one here and the other in South Africa) I cannot afford to pay cash outright for cars. If I had an abundance of cash I would buy the cars outright, but I don't so I'm happy to just get a finance agreement that utilises my funds- partly augmented by a car allowance- most efficiently for my own situation...

Gareth.

My remark about the depreciation was sarcastic, when you mentioned it in your post, i didn't see the relevance of the depreciation at all when discussing methods of payment. Obviously the car will depreciate the same whatever method of payment.

If you buy the car on finance when you already have the cash to hand for an outright purchase (read my original post to which you responded), any interest you pay is stupid because it's an unnecessary waste of cash. On an expensive car it will be hudreds to thousands of pounds.

I know you didn't mention the bank, but this is where most people leave money when it's not being used unfortunately.

I understand your comments regarding not being in the position to pay for the car outright, but my original post to which you responded said quite clearly that IF you had the cash, an outright purchase would be best.

No offence meant mate [img]images/graemlins/wink.gif[/img]

[Gareth]

No, no, no.....
You originally said ' times the flat rate by 2.1 to get the APR'- so logically by your calculations, if an APR is divided by 2.1 then that will take you back to the flat rate- so this does'nt explain how these lenders are lending under base!
I'll lend you me glasses and calculator [img]images/graemlins/thumb.gif[/img]

Oh here we go again [img]images/graemlins/062802beat_prv.gif[/img]

Within interest rate calculations there is a something called the "the rule of 80/20" This essentially means that you can't take one headline number and divide/times it to get an exact same calculation.

Hence your taking my (approx) 2.1 multiplcation of the flat rate to give the APR does not reference back when you divide it to try and attain the flat % rate.

I am reasonably up to speed ( [img]images/graemlins/blush.gif[/img]) on these things but would be happy for a "full on" finance guru to enlarge on my point.

p.s. Logic very rarely comes in finance percentages M8 [img]images/graemlins/3flypigs.gif[/img]

p.p.s. Wouldn't be easier if we could all pay cash for our cars and we wouldn't have the hassle of financ?! [img]images/graemlins/laugh.gif[/img]

[Gareth]

yours works out about 7.0% APR I think.

Cheers Dunc.... ive never really understood this "fixed rate" and APR [email]cr@p...[/email] either way the monthly repayment remains the same figure every month.





I cant wait to pick it up..... [img]images/graemlins/laugh.gif[/img]

Riz [img]images/graemlins/s3addict.gif[/img]

Mmm you sure it's fixed and not variable..???

Depends if it's linked to FHBR (Finance House Base Rate) of course [img]images/graemlins/smile.gif[/img]

[Gareth]

Riz

Simple way around this is to ask what the APR is.

By law they have to tell you and at the end of the day the APR is the real rate of interest you will be charged.

Incidentally your 3.75% would actually be a little over the 7.0% Dunc indicated...but I wouldn't worry about it....it's only money after all [img]images/graemlins/1syellow1.gif[/img] [img]images/graemlins/beerchug.gif[/img]

[Gareth]

No offence taken, or meant, at all old chap [img]images/graemlins/rocker.gif[/img]