Car Finance via Mortgage?

NeilMick

NeilMick

NeilMick

Associate
Joined
30 May 2003
Posts
1,042
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UK
Hello,

Just looking to for peoples opinions on using an interest only mortgage to help finance the purchase/ownership of a Aston Martin V8 Vantage and whether I should consider any other alternatives (I know some people will save wait and save up, but that will take me some time).

Earlier ones of these can now be picked up from between 30k-35k, of which I have around 15k of, leaving me having to finance the remaining 20k.

As these aren't depreciating a great deal below their current level then I should always have the 20k in the car that I've borrowed on the interest only mortgage.

Basically I'm looking for someone to give me a reason not to get one for the £25 a month the mortgage will cost. :D

Thanks,

Neil
 
Think about the total interest you will pay on said mortgage increase. Ok you may only intend to keep it there for a couple of years, but who really goes from owning a car like this and all the running costs that come with it back down to a £1k banger so the outstanding sun can be paid ?

Also consider any penalties if and when you do want to pay that lump back

Need to consider whether the lower LTV through not having that sum there would attract a better rate of interest too .

Then there's the question of how the whole debt amount is going to be paid off - you may not think the car will depreciate quickly now on, but Aston's are not known for reliability so you will want some cash aside for actually running the thing. This could quickly consume any funds you okan to use to lay off the balance

Sounds like a bonkers idea to me - any more mortgage debt than you need is rarely a good idea
 
This would be my weekend car, I already have another daily run around.

Thanks for the reminder about the penalties, will indeed check this out before proceeding.

My LTV would still be <10% so I don't think it will have much of an impact on the rate I could get
 
By mortgaging the car, do you actually mean remortgaging the house to release equity and then using that equity to buy the car outright?
So over 20 years you will slowly pay back the purchase cost through the normal repayments on your home?
How do you plan to pay it off if you are just going to take this 'mortgage' interest only?
 
How are you intending to pay off the money for the car and house? Sounds like a ridiculous idea to me.
 
I wouldn't start off with the intention of buying the car outright, just pay the interest payments on the 20k borrowed. The idea would be to keep it a couple of years then sell it and pay the mortgage amount off, accepting any of the 15k I have put in originallly that it has lost is what the car will have cost me (plus the interest payments)

Although after 2 years I could have saved enough to pay it off and keep the car, so that option would be open to me.
 
NeilMick said:
I wouldn't start off with the intention of buying the car outright, just pay the interest payments on the 20k borrowed. The idea would be to keep it a couple of years then sell it and pay the mortgage amount off, accepting any of the 15k I have put in originallly that it has lost is what the car will have cost me (plus the interest payments)

Although after 2 years I could have saved enough to pay it off and keep the car, so that option would be open to me.
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And then once you're used to the idea of driving an Aston and all your friends and neighbours see it, what are you going to do, get rid it, pay off the mortgage and go back to an Audi A4?

Sounds like a recipe for putting yourself into a slightly awkward 'keeping up with the Jones' situation, except actually it's yourself you will be trying to keep up with.
 
NeilMick said:
I wouldn't start off with the intention of buying the car outright, just pay the interest payments on the 20k borrowed. The idea would be to keep it a couple of years then sell it and pay the mortgage amount off, accepting any of the 15k I have put in originallly that it has lost is what the car will have cost me (plus the interest payments)

Although after 2 years I could have saved enough to pay it off and keep the car, so that option would be open to me.
Click to expand...

Have you also factored the running costs for a car such as an Aston?
 
Kenai said:
And then once you're used to the idea of driving an Aston and all your friends and neighbours see it, what are you going to do, get rid it, pay off the mortgage and go back to an Audi A4?

Sounds like a recipe for putting yourself into a slightly awkward 'keeping up with the Jones' situation, except actually it's yourself you will be trying to keep up with.
Click to expand...

Like I said, I will have saved enough after the 2 years to be able to pay off the balance and keep the car if I choose to.

I'm not really bothered what other people think of me, at least I will have owned one at some point in my life and whatever I replace it with wouldn't be an Audi A4.
 
Bear said:
Have you also factored the running costs for a car such as an Aston?
Click to expand...

Like I said, it will be a weekend car so not as much of an issue of a daily driver, but yes I have researched the car and am aware of things like clutches and rear lights which are potential issues which will need money spent on them.
 
Will you realistically be saving that much whilst paying for the upkeep of a car like that? And if you can save that fast, why not just wait a bit, it's hardly a typical 'I could afford an Aston if I don't eat for 15 years' situation.
 
No different to raising any other form of finance, other than the fact you're doing it on interest only and won't be paying it off as you go.

If it is cheaper than any other form of finance then why not. That's what finance is for - buying something that you don't have the capital for now, and paying it off over time.
 
Thanks, that was my thinking too, it's by far the cheapest way of borrowing the money I can think of and was just checking I hadn't missed any pitfalls when looking into it.

I guess people wouldn't be so averse to it if I was paying off the capital as well, however as long as I'm happy it won't depreciate too far and don't mind potentially not having it after 2 years then I fail to see any real downsides.
 
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