Buying "expensive" cars

paddy

paddy

paddy

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Following on from HEADRATs thread on his brother-in-laws new Aston Martin Rapide.

I was wondering how people buy such cars.

I took a punt at the following numbers for a ~£140'000 car:

paddy said:
Assuming you haggle 25% off: £105'000 purchase price
£50'000 deposit and 2 years @ £600/month.
Leaves ~£40'000k at the end.
2010 Rapids appear to be worth ~£80'000 which gives you £40'000 in your pocket.
So has 2 years Aston Martin ownership really just cost: 50k + (24*600) - 40k = ~ £24'000.
£1000/month doesn't seem too bad - assuming I earnt something approaching 6 figures!
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For which I've been somewhat ridiculed :p.

Now I've never bought a car for more than £10k and never from anything approaching a premium marque. I've also never needed to use finance. So how that area of the market works is an unknown to me.

So educate me, at what value do people start using finance as the norm (I assume you don't drop £140k cash on an Aston Martin and take the £30k/year depreciation as a "running cost"). And what sort of numbers are we talking about.

Obviously a lot of this is circumstance specific but I'm interested.
 
paddy said:
Following on from HEADRATs thread on his brother-in-laws new Aston Martin Rapide.

I was wondering how people buy such cars.

I took a punt at the following numbers for a ~£140'000 car:



For which I've been somewhat ridiculed :p.

Now I've never bought a car for more than £10k and never from anything approaching a premium marque. I've also never needed to use finance. So how that area of the market works is an unknown to me.

So educate me, at what value do people start using finance as the norm (I assume you don't drop £140k cash on an Aston Martin and take the £30k/year depreciation as a "running cost"). And what sort of numbers are we talking about.

Obviously a lot of this is circumstance specific but I'm interested.
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Lol.

25% off a new AM?

Lol.
 
AM currently have a 0% PCP deal on the moment, which makes it very appealing but it still requires a very hefty deposit.
 
Lease purchase deals etc start to become useful when the amount of money in the car could be more usefully used elsewhere. For example, a loan APR of 6% over 2-3 years might be good if it frees up some cash for investment.

Arguably, the danger zone is when people borrow a high percentage of the car's value and after a year or so find themselves in negative equity.
 
You don't get a discount on a new Aston. You buy them by getting them used or going in with a huge deposit and getting finance or buying them outright. Used with finance is the cheapest way (even better if you have a car allowance to pay part or full repayments). You need to bear in mind that not many of these cars exist around the world.
 
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arcamalpha said:
Lease purchase deals etc start to become useful when the amount of money in the car could be more usefully used elsewhere. For example, a loan APR of 6% over 2-3 years might be good if it frees up some cash for investment.
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People often say this but except for very specific and rare circumstances I don't buy it. If you can invest at a higher return than you can borrow from a bank then why involve a car in the mix, you'd just borrow to invest!
 
My GF's old bosses (husband and wife) were very, very wealthy. They had Audi's, Aston's, BMW's, Porsche's etc on the drive and they were all on finance. I asked him about it and he said he makes more money investing with the cash that would pay for the cars than he loses by paying interest etc on the finance deals for the cars.
 
maccapacca said:
Aren't most through company accounts where leasing makes more sense than buying.
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Leasing a car like this through a company makes a lot less sense than it used to because it would become liable for company car tax which on that sort of car for a 50% taxpayer would be enormous.
 
Most people have no idea how this end of the market works, hence the question I guess, but buyers at this end of the sector in the main are wise and astute business people and are not foolish with their cash. Some have the equity and will simply walk in and buy the car they want for cash, most will deposit and finance as renting a depreciating asset its preferable to them.

Some of you have and will get to the place where these cars will become viable and you, like me, will smile when you see comments like "but you never own the car" as in reality, who cares, you'll keep it for 12 months and bin it for something fresh, it's irrelevant. We are talking a few percent of your monthly outgoings, relatively. When you get in to the really rarefied air of collecting special cars then these will typically be acquired for cash and will usually be sold for a profit, often substantial.

It amazes me the sorts of deals out there on special cars, deals you would never read about in What Car or on most internet forums but they are out there and the margin a dealer has in a 2nd hand car at this level is substantially more than someone selling a focus and if they hang around too long will be ripe for picking up at a sizeable chunk off.
 
You will find that a lot of people who can afford these cars will also have an accountant. They can do wonders with your books, especially if you give them a chance to play with financing and the like.
 
[TW]Fox;23467380 said:
People often say this but except for very specific and rare circumstances I don't buy it. If you can invest at a higher return than you can borrow from a bank then why involve a car in the mix, you'd just borrow to invest!
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This would mainly apply to company directors who want to keep cash in the business (especially if you're a growing business). Whilst you say you'd borrow to invest, it's not always possible to get finance as a business, whereas car finance is pretty straightforward.
 
This is something that I think is incredibly specific depending on what you are buying.

A crude example maybe, but based on residuals, you may consider buying a 911 Carrera 2 in a very different way to a 911 GT3 special edition. I don't think I am explaining this well, but look at how 996 C2's have gone down to, in some cases, 10-14k, whereas a 996 GT3 RS (with the awesome blue or red wheels) is significantly more valuable.

I would also imagine that the UK is different to other countries also, where it seems that in places like the USA, leasing a car is a lot more widely done, with specific websites to allow you to take over other peoples leases once they have 'done their time' with the car.

I do think that Housey has really hit this on the head. For someone who can really afford this sort of car (and I'm not talking someone who uses ECP £12.50 pattern part discs and chucks on aftermarket suspension when the factory fit breaks) leasing the car is a nice way to remove effort from the purchase, you just hand it back once you are done.

Buying a 'classic' car (lets pick something like an NSX-R, simply as I know they are super rare) is going to be done in a very different way, for a multitude of reasons.
 
s0ck said:
So are people that buy used performance (liabilities) cars using a chunk of their savings a bit silly?
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Not always. I know of someone who bought a special car that has appreciated in value during their ownership.

Sure, there have been running costs, but with savings getting bugger all interest, I'm sure its enabled them to own a car that is fantastic experience, and not lost out through depreciation of the vehicle.

I'd imagine there are some situations where you could genuinely make money on it. Running costs included. Didn't the Enzo do that?
 
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