Car finance - Whats a good / bad rate/deal?

Gibbo · 3 Mar 2011 at 16:23

Anim said:
I'm also opting for a 5 year loan soon because it will have no impact on my lifestyle, i could pay it back in 2 or 3 years but i'd probably have to budget a little here and there. Instead with having no early repayment charges i can choose whether to put my end-of-month spare cash in to the loan or spend it on something fun, having the freedom to do that is key for me. Its the same with my mortgage, i could put more in and pay it off quicker but im very comfortable with my lifestyle, when i get a higher paid job the increase in pay will be going in to the mortgage primarily because my lifestyle wont need to change

+1

Gibbo · 3 Mar 2011 at 16:24

Robbie G said:
I seriously doubt that a dealer will come down to 7% for a ~£25k car finance deal, but then they'd consider what you're paying for the car also so you can but try.

Yes they can charge 1% of the overpayment amount, not the whole lot.

For example if your payment for March was £1000 and you paid £5000, they could charge you up to £40 (or £20 if you were in the last year of the term).

This is obviously very good for borrowers. Whereas previously, someone might have been keen to borrow over the shortest possible term in order to reduce the total interest paid, borrowers can now pay over the term that suits their lifestyle, choosing to overpay very cheaply if their circumstances change and they find themselves in a position of higher disposable income.

All I can say is that is bloody excellent!

So is there a 25k limit or not as BMW offered 27k at 9.8% APR on the spot.

DM · 3 Mar 2011 at 16:25

Gibbo said:
Excellent so they are in a position to barter then.

So basically I can barter with a car dealer on:-

Car sticker price
My trade in price
Finance APR Rate

Once hit price targets on above three can try ones luck with getting stuff thrown in like service packs or extras.

No you are only going to win one way, the dealer needs to earn something.

Regardless of how he words it, the dealer wants X amount from a car, so just take your best shot at getting what you want.

Sell that Evo private for a start and get that out of the equation.

Participant · 3 Mar 2011 at 16:25

Gibbo said:
All I can say is that is bloody excellent!

So is there a 25k limit or not as BMW offered 27k at 9.8% APR on the spot.

The £25k only applies to personal unsecured loans, car finance is different.

merlin · 3 Mar 2011 at 16:26

Dealers will finance whatever is needed - there's no £25k limit for them - how do you think Lambo etc sell £140k cars?

Private finance like Tesco/Sainsburys Finance etc - they'll have the £25k limit.

Gibbo · 3 Mar 2011 at 16:28

DiamondMark said:
No you are only going to win one way, the dealer needs to earn something.

No my point is.

You come to a price on the car and a trade in for yours. But maybe your not quite at the target so instead you can try to barter with them on the interest on the car finance.

My question is does the dealership have the ability to offer a better interest rate and I think Fox confirmed this is true.

merlin · 3 Mar 2011 at 16:28

If you are getting the car of your dreams on a straight deal then cool. But if you're shying away from let's say a GTR because of the chunks of cash involved - I'd seriously take a look at a finance package with a baloon as it could theoretically put a GTR on the driveway for the same monthly as whatever it is you're presently flirting with.

Gibbo · 3 Mar 2011 at 16:29

merlin said:
Dealers will finance whatever is needed - there's no £25k limit for them - how do you think Lambo etc sell £140k cars?

Private finance like Tesco/Sainsburys Finance etc - they'll have the £25k limit.

Very rich people arrive and do a bank transfer for the full amount.

merlin · 3 Mar 2011 at 16:30

Gibbo said:
Very rich people arrive and do a bank transfer for the full amount.

True, but I'd say the vast majority still use finance! Sometimes it makes more sense to finance even if you could in theory just drop shopping bag of cash on the salesmans desk.

DM · 3 Mar 2011 at 16:31

Gibbo said:
No my point is.

You come to a price on the car and a trade in for yours. But maybe your not quite at the target so instead you can try to barter with them on the interest on the car finance.

My question is does the dealership have the ability to offer a better interest rate and I think Fox confirmed this is true.

Yes but they wont do it if it messes up thier bottom line.

Forget how they come to "i want 3k from this car" they want 3k from that car.

They dont give a **** how they get that 3k, kick back from finance co or pure profit on a cash sale, they just want whatever they want from that car.

Gibbo · 3 Mar 2011 at 16:32

merlin said:
If you are getting the car of your dreams on a straight deal then cool. But if you're shying away from let's say a GTR because of the chunks of cash involved - I'd seriously take a look at a finance package with a baloon as it could theoretically put a GTR on the driveway for the same monthly as whatever it is you're presently flirting with.

I shall be honest mate, when a dealer mentioned to me 27k on finance I was like get a grip, but then when they said why its only like £550 a month I was genuinely shocked as I expected £800 a month.

The car I am looking at is an M3 DCT, ex-demo 2010 for 52k, seems a tad expensive.

I can get a GTR for 40-42k from a dealership, they seem to have dropped a lot, but that would be only 15k ish on finance and that over 5yr term would be pittance.

Thing is I can't make the move yet until April/May as I want to at least get to see how my car is with all the free bits on it, because everything I've driven so far I end up getting back in the EVO and preferre it. If only it did not look and sound so crap, LOL.

Gibbo · 3 Mar 2011 at 16:34

DiamondMark said:
Yes but they wont do it if it messes up thier bottom line.

Forget how they come to "i want 3k from this car" they want 3k from that car.

Yeah I understand that of course, but as a customer I want the best deal possible and if you time it right sometimes dealerships have a car they want shut off because maybe its end of month, they have a bonus target to hit or new registration is due so sometimes they will let cars go quite cheap and sometimes they won't. But as a customer I've got to try for the best deal and not just be a walk over.

DM · 3 Mar 2011 at 16:39

Gibbo said:
Yeah I understand that of course, but as a customer I want the best deal possible and if you time it right sometimes dealerships have a car they want shut off because maybe its end of month, they have a bonus target to hit or new registration is due so sometimes they will let cars go quite cheap and sometimes they won't. But as a customer I've got to try for the best deal and not just be a walk over.

I understand that and sometimes if i have a car that im just sick of the sight of you can have it for 100 quid drink, but it matters not if my target is 100 quid or 5k i want what i want.

If you want to roll the dice and hope for good luck, might i recommend black on the roulette table.

merlin · 3 Mar 2011 at 16:41

Dealers can be known to play hard-ball but certainly I've found every one I've ever dealt with to be willing to discuss sensible offers once you've made it clear you are in a postion to sign up there and then.

Emphasis on sensible there ^ no dealer will give you the time of day if you insult them.

Gibbo · 3 Mar 2011 at 16:45

merlin said:
Dealers can be known to play hard-ball but certainly I've found every one I've ever dealt with to be willing to discuss sensible offers once you've made it clear you are in a postion to sign up there and then.

Emphasis on sensible there ^ no dealer will give you the time of day if you insult them.

Exactly mate, I've never been insulting to dealers or talk rubbish but at the same time normally make it clear I know the going rate of such car/year/mileage and am not expecting to pay more without good reason.

I've never paid sticker price for a car, not ever.

Because as a customer I want to buy said vehicle, have 1-2yr motoring and then sell it with as little loss as possible to myself.

Depends on the dealer, some markup at very fair prices and others markup very high and have a lot of play in their price or like Diamondmark says, sometime they have a car they just want shut off.

DM · 3 Mar 2011 at 16:46

merlin said:
Dealers can be known to play hard-ball but certainly I've found every one I've ever dealt with to be willing to discuss sensible offers once you've made it clear you are in a postion to sign up there and then.

Emphasis on sensible there ^ no dealer will give you the time of day if you insult them.

Without a doubt all i am saying is this.

Car dealer Dave wants 2k absolute bottom line, he dosent really care if that is made up from ****ing you on a part ex, charging you 1% over the odds and getting a bit of commission or just dropping his window price he dosent give a monkeys, so of course he will listen to your sensible bid, he will listen to anything you want to talk about in fact as long as he walks away with his 2k.

That 2k profit might have started at 4k on a sunny day but if 2k is the bottom line its 2k.

Gibbo · 3 Mar 2011 at 16:47

Pretty much my last question:-

With new finance if you do an overpayment, what changes the term or the repayment amount? Basically if you overpay by £1000 one month does your payment for the following month drop or do they just reduce your term?

merlin · 3 Mar 2011 at 16:47

Print out other ads for similar cars albeit priced sharper and take them into the dealer with you and use them as bargaining chips.

merlin · 3 Mar 2011 at 16:48

Gibbo said:
Pretty much my last question:-

With new finance if you do an overpayment, what changes the term or the repayment amount? Basically if you overpay by £1000 one month does your payment for the following month drop or do they just reduce your term?

It only ever reduces the term.

Gibbo · 3 Mar 2011 at 16:48

DiamondMark said:
Without a doubt all i am saying is this.

Car dealer Dave wants 2k absolute bottom line, he dosent really care if that is made up from ****ing you on a part ex, charging you 1% over the odds and getting a bit of commission or just dropping his window price he dosent give a monkeys, so of course he will listen to your sensible bid, he will listen to anything you want to talk about in fact as long as he walks away with his 2k.

That 2k profit might have started at 4k on a sunny day but if 2k is the bottom line its 2k.

Yep agreed, my point is most will be starting off at 4k and if your a walk-over they will make that 4k on you and not the 2k bottom line.

I know how business runs, we all have to make profit otherwise you go bust, its just a case of getting the best deal that works for all, both seller and buyer.