Quarter-term downgrade - actually possible?

RedvGreen

RedvGreen

RedvGreen

Soldato
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So, life has presented a few interesting things recently for me, and i'm now looking to get on the property ladder.

My biggest expenditure is my car, which is 1yr old (owned since new), and i'd be looking to get rid to get something more financially sensible, to free up more monthly salary.

If I were to jump from a 330D xDrive to a 118D/120D, would I really be saving any money, or, most likely, would I have so much negative equity (after 1yr of finance) dumped on the (used/nearly-new/pre-reg) 118D/120D that i'd not be saving anything?

As far as I could tell, the owed amount (less interest) is currently neck-and-neck with the retail value for my car, however this does not account for retail profit margins which can differ vastly.
 
its madness take a 20+ % hit on a one year old car only to go and buy another new or nearly new car.

Yes get rid of the car if you can't afford it but do like the rest of us and buy a 5+ year old car
 
Dr House said:
its madness take a 20+ % hit on a one year old car only to go and buy another new or nearly new car.

Yes get rid of the car if you can't afford it but do like the rest of us and buy a 5+ year old car
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This is the financial spiral - you will only be able to chop the vehicle against another vehicle under the same brand. Not many dealerships would be willing to do a deal against another marque, or an older model (as they simply won't stock them).
 
Unfortunately there is no really easy way out. That is the risk you take when you take on a new car.

That's why i always preferred to buy cars with a bank loan if needed as it's not tied to the car you could simply sell it, buy something cheaper and pay a big chunk off the loan.
 
This is the problem with financing new cars, it removes quite a lot of your flexibility to exit the car if circumstances change. The power is all with the dealer I'd imagine so you'll probably find the downgrade isn't saving you anything like as much as you think it will. The best thing to do is find a way to keep going with what you have.
 
Well, I may not make a huge saving on monthly, but no harm in checking with the Dealership to see what the actual difference can be.

If the vehicle is limiting my Mortgage in Principle, then I can just delay the house for a year, pay off existing other debts, and also get rid car at 2yr, instead of 1yr, which may afford a bit less damage.
 
Always worth talking to the dealer but they do hold all the cards.

Personally a house is worth a thousand cars so i'd always prioritise it over anything else. Always makes me laugh when people moan about not being able to get on the property ladder yet have a brand new financed car sat outside!
 
sovietspybob said:
Always worth talking to the dealer but they do hold all the cards.

Personally a house is worth a thousand cars so i'd always prioritise it over anything else. Always makes me laugh when people moan about not being able to get on the property ladder yet have a brand new financed car sat outside!
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Hindsight is a wonderful thing, but like I said, priorities change!
 
The finance will affect your mortgage options. Best bet is to get shot of the car/finance and buy another for cash. Pointless chopping it in for a cheaper new car IMO.
 
It is usually the monthly commitment that they care about, or at least it was before the new rules came in. If you can check / confirm that then it doesn't really sound like what you're thinking about would make much difference.

I'd also be careful about applying for any new finance so close to actually applying for the mortgage, which I'm assuming you'd have to do
 
MagicBoy said:
The finance will affect your mortgage options. Best bet is to get shot of the car/finance and buy another for cash. Pointless chopping it in for a cheaper new car IMO.
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Exactly. Even without the mortgage application it would be certifiable to pay the steepest part of the depreciation curve on 2 cars in quick succession.
 
I was in this situation, turned out my finance was actually in the form of a loan, so I just sold the car and bought a more sensible one.

Double check that the finance is on the car

might not be any help but its worth checking just in case
 
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