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Post by racingteatray on Jun 4, 2020 18:50:49 GMT
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Post by PetrolEd on Jun 4, 2020 22:04:31 GMT
It is when you compare the cost of financing used vs new in that particular instance I'd be interested in the details of that! (Not being argumentative - genuine interest!) Easy to get lost in the numbers but I’d expect a 992 to cost 30k in depreciation over 3 years and the 2012 991 to lose just over 10k in the same time frame |
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Post by racingteatray on Jun 4, 2020 22:11:44 GMT
I'd be interested in the details of that! (Not being argumentative - genuine interest!) Easy to get lost in the numbers but I’d expect a 992 to cost 30k in depreciation over 3 years and the 2012 991 to lose just over 10k in the same time frame That's what I imagined, which is why I was intrigued by Pete's assertion. |
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Post by chipbutty on Jun 5, 2020 15:57:33 GMT
That's not how finance companies were setting up their GMFVs. The last time I looked, the monthlies on an early 991 was not that much different from a new car and it appeared that the driver was the GMFV on the 8 year car was very low compared to the borrowed amount
Now you may end up moving the car on for way more than the GMFV (new and used) - but add in running costs for an aged 991 and the new car looked very attractive.
I also can't get my head around " £50k " for an 8 year old one versus " £80k " for a brand new one.
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Post by Deleted on Jun 5, 2020 15:59:50 GMT
From what I have heard the R8 is a bit of an arsy bugger, too wide for a lot of roads.
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Post by Tim on Jun 5, 2020 16:01:47 GMT
They always look narrower to me than the Italian equivalents.
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Post by garry on Jun 5, 2020 16:35:23 GMT
That's not how finance companies were setting up their GMFVs. The last time I looked, the monthlies on an early 991 was not that much different from a new car and it appeared that the driver was the GMFV on the 8 year car was very low compared to the borrowed amount Now you may end up moving the car on for way more than the GMFV (new and used) - but add in running costs for an aged 991 and the new car looked very attractive. I also can't get my head around " £50k " for an 8 year old one versus " £80k " for a brand new one. This sounds right to me. My 991 is worth £40k - £45k I think. I reckon a gmfv on a three year deal would be low £20k’s? A new 992 is £90k. What would the gmfv be - £55k? Add in to that the cheaper finance deals you can get on new cars and I bet they’re not too distant. Could be talking complete nonsense as I’ve never bought a car that way. |
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Post by Martin on Jun 5, 2020 16:40:19 GMT
That's not how finance companies were setting up their GMFVs. The last time I looked, the monthlies on an early 991 was not that much different from a new car and it appeared that the driver was the GMFV on the 8 year car was very low compared to the borrowed amount Now you may end up moving the car on for way more than the GMFV (new and used) - but add in running costs for an aged 991 and the new car looked very attractive. I also can't get my head around " £50k " for an 8 year old one versus " £80k " for a brand new one. This sounds right to me. My 991 is worth £40k - £45k I think. I reckon a gmfv on a three year deal would be low £20k’s? A new 992 is £90k. What would the gmfv be - £55k? Add in to that the cheaper finance deals you can get on new cars and I bet they’re not too distant. Could be talking complete nonsense as I’ve never bought a car that way. Yes, but you'd be paying interest on double the amount so I can't see it being cheaper. With some proper man maths yes, but not on paper. I've only had one PCP (the 535d) and would prefer not to have another, but I know in some cases they can work out pretty well and they do give you certainty. I used a low interest bank loan for the BMW (2 years, so now paid off) and took advantage of the deposit contribution by getting the Golf on a PCP and paying it off in the first week. |
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Post by garry on Jun 5, 2020 16:52:23 GMT
This sounds right to me. My 991 is worth £40k - £45k I think. I reckon a gmfv on a three year deal would be low £20k’s? A new 992 is £90k. What would the gmfv be - £55k? Add in to that the cheaper finance deals you can get on new cars and I bet they’re not too distant. Could be talking complete nonsense as I’ve never bought a car that way. Yes, but you'd be paying interest on double the amount so I can't see it being cheaper. With some proper man maths yes, but not on paper. I've only had one PCP (the 535d) and would prefer not to have another, but I know in some cases they can work out pretty well and they do give you certainty. I used a low interest bank loan for the BMW (2 years, so now paid off) and took advantage of the deposit contribution by getting the Golf on a PCP and paying it off in the first week. Forgot about the interest on the loan! But, yes, some man maths on the cost of running new vs old would get them closer |
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Post by johnc on Jun 5, 2020 17:11:21 GMT
But manufacturer's low interest rates on new cars are often less than half the rate on a used car so it can work out about the same for interest.
PCP usually costs a small fortune in interest unless you can get a low rate. I just revert to my spreadsheet to work it out and when the interest figure is large I find another way.
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Post by racingteatray on Jun 5, 2020 17:31:43 GMT
People tend to focus on whether they can afford the monthly payments and the GFV. But it's also very much about the amount you are actually charged to spread the cost over the PCP period. Otherwise you're just heedlessly inflating the cost of an already expensive purchase.
On that basis, thanks to very low APRs, the PCP on both our cars sort of fell into the no-brainer bracket.
It cost my wife about £600 in interest to spread the purchase of her Fiat over three years, so about £200/year.
It is costing me about £2,600 in interest to spread the purchase of my BMW over four years, so about £650/year.
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Post by Martin on Jun 5, 2020 17:58:45 GMT
I think the loan I used for the BMW cost me £750 in total for the 2 years ( 2.9% APR), which wasn’t a lot to keep the tucked away savings in place.
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Post by racingteatray on Jun 5, 2020 18:17:00 GMT
I have 2.9% APR as well but the difference on the PCP is that you pay it on the full outstanding amount. On the other hand, the monthly is lower as the GFV is deducted. Degree of swings and roundabouts.
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Post by Martin on Jun 5, 2020 18:21:49 GMT
I have 2.9% APR as well but the difference on the PCP is that you pay it on the full outstanding amount. On the other hand, the monthly is lower as the GFV is deducted. Degree of swings and roundabouts. Definitely. That really helped when I went from a company car to the 535d, as I had no equity and nothing saved specifically for a car deposit. The monthlies on the loan were a touch over £1k but I figured that was slightly less than the monthly depreciation and only for 2 years. |
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Post by chipbutty on Jun 5, 2020 19:49:14 GMT
I was comparing the full deal, including likely running costs over the 3 year period.
Money down + sum of monthlies + running costs to derive a 3 year total. The new car was more expensive, but importantly (as stated originally) not by a significant enough margin to make used more attractive than new (IMO).
Of course, the unknown is the return if you sell at 3 years rather than give back or trade for a newer version. If current pricing trends remained at point of resale, then there is some cash coming back which reduces the total spent. However, I would never rely on this as the law of sod will burn your fingers and I would never allow it to interfere with the man maths.
Also - there is a point where a monthly figure reaches a significance where the expectations become much greater. So, for example, if it's £700 a month for the 8 year old 50k miler and £900 a month for the brand new one. I'll go brand new every time as the perceived VFM is so much higher.
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Post by chipbutty on Jun 5, 2020 19:57:46 GMT
I should add, it's a similar money in, enjoyment/benefit out calculation that has always put me off the 911.
It's only the 991 and 992 that I really like the look of, but they are so expensive compared to anything remotely comparable without being better enough by a margin big enough to justify the extra cost.
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Post by Martin on Jun 5, 2020 20:07:04 GMT
I should add, it's a similar money in, enjoyment/benefit out calculation that has always put me off the 911. It's only the 991 and 992 that I really like the look of, but they are so expensive compared to anything remotely comparable without being better enough by a margin big enough to justify the extra cost. Are you talking about list price or cost to buy? When it comes to total cost, I can’t think of anything that’s a lot cheaper but comparable? Not new anyway, the decent residuals do make a difference when you’re buying used. |
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Post by Deleted on Jun 6, 2020 9:23:41 GMT
For me one of the points of consideration is the realistic opportunity to use the performance and ability of a given vehicle on the roads as they are and with the potholes not getting the right attention/roads being tarted up rather than properly dealt with. Wheels and tyres can, as we have seen on the forum, cost a small fortune to replace and four new tyres are properly scary considering the prices I have seen quoted.
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Post by Deleted on Jun 6, 2020 9:43:07 GMT
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Post by johnc on Jun 8, 2020 7:10:32 GMT
To give an idea of the difference between HP and PCP and the difference in cost I have put two examples below for the same car.
CAR 1
- PCP
PRICE OF CAR 48500 ANNUAL INTEREST 4.90%
OPENING PAYMENT 5000 MONTHLY INTEREST 0.41%
LOAN AMOUNT 43500
BALLOON PAYMENT 22500 TOTAL MONTHS 49
MONTHLY PAYMENT £565.62
TOTAL INT PAID £6,715.47
TOTAL PAID £55,215.47
CAR 2
- HP
PRICE OF CAR 48500 ANNUAL INTEREST 4.90%
OPENING PAYMENT 5000 MONTHLY INTEREST 0.41%
LOAN AMOUNT 43500
BALLOON PAYMENT 0 TOTAL MONTHS 49
MONTHLY PAYMENT £981.33
TOTAL INT PAID £4,585.29
TOTAL PAID £53,085.29
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Post by racingteatray on Jun 8, 2020 7:36:41 GMT
Indeed. But while I could stomach a monthly payment of £565, I certainly couldn't stomach a monthly payment of £981. I'd rather pay £2k more interest for the ability to nearly half the monthlies.
When I was buying my current car, I set a ceiling on the monthlies of £400. Anything more than that seemed financially irresponsible. Monthlies on the GC are £395. The balloon payment can then be funded by taking out an unsecured personal loan at c.2.9% APR (same as the current rate), which will keep the monthlies broadly equal until such time as I fancy a change of car, and then I can reconsider. That's what I did with the M135i and it worked well enough.
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Post by Martin on Jun 8, 2020 8:06:26 GMT
Indeed. But while I could stomach a monthly payment of £565, I certainly couldn't stomach a monthly payment of £981. I'd rather pay £2k more interest for the ability to nearly half the monthlies. When I was buying my current car, I set a ceiling on the monthlies of £400. Anything more than that seemed financially irresponsible. Monthlies on the GC are £395. The balloon payment can then be funded by taking out an unsecured personal loan at c.2.9% APR (same as the current rate), which will keep the monthlies broadly equal until such time as I fancy a change of car, and then I can reconsider. That's what I did with the M135i and it worked well enough. If you don’t hand the car back at the end of the initial term on the PCP deal and have to take out another loan, the total interest paid will be higher because you’ve paid it all off in the HP example. I get your point and it’s why PCPs are so attractive. I’m not sure how going over £400 is financially irresponsible, but you do have to set yourself a limit (then man maths an increase!). Some people would say paying £55k for a £43k car is financially irresponsible! |
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Post by Bob Sacamano v2.0 on Jun 8, 2020 8:20:32 GMT
To give an idea of the difference between HP and PCP and the difference in cost I have put two examples below for the same car. CAR 1
- PCP PRICE OF CAR 48500 ANNUAL INTEREST 4.90% OPENING PAYMENT 5000 MONTHLY INTEREST 0.41% LOAN AMOUNT 43500 BALLOON PAYMENT 22500 TOTAL MONTHS 49 MONTHLY PAYMENT £565.62 TOTAL INT PAID £6,715.47 TOTAL PAID £55,215.47 The way I look at that, by paying a £5000 deposit on a PCP the monthly payment is actually £565.62 + (£5000/49) = £667.66. I'm happy to use PCPs with a competitive interest rate and set myself a monthly budget but I won't put down a deposit to artificially get below that figure. |
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Post by PetrolEd on Jun 8, 2020 8:31:57 GMT
Theres more assumptions here then an Autocar magazine article proclaiming you can buy a Ferrari for the same cost as a Mondeo.
A new Porsche 992 is 82K or at least 90k once you've put a few essentials on it. Typically Porsche finance hasn't needed to put any low rate offers in place as they haven't needed to, nor discount.
On my GT4 the lowest the dealer could get to was 5.9% which was the same as new cars. They dont sell enough cars to get the volume discounts off VWFS apparently.
A new 992 funded over 48 months is going to be at circa £1400 a month with a GMFV of 40K. HP with Balloon you can raise the residual to 50K but then your APR is going to be higher to cover the risk. Trying to get decent residuals at the moment is hard work.
At those costs you could finance the full balance of the used 911 for considerably less (£1000 a month) and actually have a car you own at the end of the term. Yes, the new car I predict being worth 50k after 4 years therefore you'll have 10K when you trade it in but I predict the old car to be worth at least 20k.
Again these numbers are speculative but I see a near 30k difference in finance costs but of course this makes no mention of running costs but theres quite a slush fund to cover warranty and servicing.
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Post by PG on Jun 8, 2020 8:32:30 GMT
If you don’t hand the car back at the end of the initial term on the PCP deal and have to take out another loan, the total interest paid will be higher because you’ve paid it all off in the HP example. I get your point and it’s why PCPs are so attractive. I’m not sure how going over £400 is financially irresponsible, but you do have to set yourself a limit (then man maths an increase!). Some people would say paying £55k for a £43k car is financially irresponsible! From an overall fiscal perspective, then buying on HP makes more sense than PCP. But people use PCP for a number of reasons. Racing's one is the key one - it allows people to get into cars that they could not afford, or not wiling to pay in terms on monthly expenditure, on HP. It is also where the manufacturers put their support (like a deposit contribution that you won't get on HP). It also depends on one's mindset. If people think of cars like phones, then "renting" makes sense to them. PCP'ers looking at the above figures would instead be thinking - "wow, look at all those cars that I could get on PCP for £900 a month". |
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Post by racingteatray on Jun 8, 2020 10:30:25 GMT
Indeed. But while I could stomach a monthly payment of £565, I certainly couldn't stomach a monthly payment of £981. I'd rather pay £2k more interest for the ability to nearly half the monthlies. When I was buying my current car, I set a ceiling on the monthlies of £400. Anything more than that seemed financially irresponsible. Monthlies on the GC are £395. The balloon payment can then be funded by taking out an unsecured personal loan at c.2.9% APR (same as the current rate), which will keep the monthlies broadly equal until such time as I fancy a change of car, and then I can reconsider. That's what I did with the M135i and it worked well enough. I’m not sure how going over £400 is financially irresponsible, but you do have to set yourself a limit (then man maths an increase!). Some people would say paying £55k for a £43k car is financially irresponsible! That's the point. I never said it was financially irresponsible, per se. I simply meant that for me, on my income and given the other many things I have to fund out of my income and the desire to still have some aside to save for other things, £400 felt like a responsible limit. Especially when you consider that for me any half-decent car is an expensive indulgence as I don't actually need one 90% of the time. I completely agree that paying £55k for a £43k car is irresponsible. I'd never do it. But if I buy my car outright cash in December, then thanks to a very large discount and low APR, a car that retailed at £48,355 will have cost me slightly less than £42k all-in, and moreover I was able to spread that cost over 4 years. A quick glance on line shows me that to fund the £17.5k balloon for a further four years at 2.9% APR will cost me a further £1k in interest, whilst maintaining my monthlies at just slightly less than I currently pay. That would mean I could spread the cost of purchasing a car over eight years for interest of less than £4k all-in, or less than £500 per annum. I call that ok in the grand scheme of things. And I could do other things with the wodge of my savings that I would otherwise need to use to buy the car outright. |
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Post by Martin on Jun 8, 2020 10:41:15 GMT
I’m not sure how going over £400 is financially irresponsible, but you do have to set yourself a limit (then man maths an increase!). Some people would say paying £55k for a £43k car is financially irresponsible! That's the point. I never said it was financially irresponsible, per se. I simply meant that for me, on my income and given the other many things I have to fund out of my income and the desire to still have some aside to save for other things, £400 felt like a responsible limit. Especially when you consider that for me any half-decent car is an expensive indulgence as I don't actually need one 90% of the time. I completely agree that paying £55k for a £43k car is irresponsible. I'd never do it. But if I buy my car outright cash in December, then thanks to a very large discount and low APR, a car that retailed at £48,355 will have cost me slightly less than £42k all-in, and moreover I was able to spread that cost over 4 years. A quick glance on line shows me that to fund the £17.5k balloon for a further four years at 2.9% APR will cost me a further £1k in interest, whilst maintaining my monthlies at just slightly less than I currently pay. That would mean I could spread the cost of purchasing a car over eight years for interest of less than £4k all-in, or less than £500 per annum. I call that ok in the grand scheme of things. And I could do other things with the wodge of my savings that I would otherwise need to use to buy the car outright. All that matters is that you (or whoever it is) understands the numbers and is happy with the deal. Interest rates are so low on savings at the moment, it makes sense (to me) to use some of mine to fund the cars. Great man maths, comparing the £42k with the list price rather than the discounted/actual price!  |
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Post by racingteatray on Jun 8, 2020 10:52:29 GMT
Absolutely. I'm a debt finance lawyer, so this is definitely an area where I have some familiarity and hence my willingness to leverage where it makes sense to do so.
Man maths-wise, discounted price was £39k but about £3k of the discount came from the finance company, so actually the position was flat.
Sure you can take the finance out to get that and then cancel it within 14 days, which is what I advise wealthier friends and colleagues to do. But I wasn't in a financial position to do that.
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Post by garry on Jun 8, 2020 11:06:23 GMT
I’m not sure how going over £400 is financially irresponsible, but you do have to set yourself a limit (then man maths an increase!). Some people would say paying £55k for a £43k car is financially irresponsible! That's the point. I never said it was financially irresponsible, per se. I simply meant that for me, on my income and given the other many things I have to fund out of my income and the desire to still have some aside to save for other things, £400 felt like a responsible limit. Especially when you consider that for me any half-decent car is an expensive indulgence as I don't actually need one 90% of the time. I completely agree that paying £55k for a £43k car is irresponsible. I'd never do it. But if I buy my car outright cash in December, then thanks to a very large discount and low APR, a car that retailed at £48,355 will have cost me slightly less than £42k all-in, and moreover I was able to spread that cost over 4 years. A quick glance on line shows me that to fund the £17.5k balloon for a further four years at 2.9% APR will cost me a further £1k in interest, whilst maintaining my monthlies at just slightly less than I currently pay. That would mean I could spread the cost of purchasing a car over eight years for interest of less than £4k all-in, or less than £500 per annum. I call that ok in the grand scheme of things. And I could do other things with the wodge of my savings that I would otherwise need to use to buy the car outright. This makes sense to me. Everyone has their own limits. I own the Porsche and lease the Ford (which I think of and treat like a white good). My approach to buying them is very different ( the ford could have been anything with seven seats that was cheap to lease). I like just handing it back. Shockingly they cost me about the same (paid £53k for the Porsche three years ago. Now worth low £40k’s I suspect so somewhere near £3k per year in depreciation, pay £250 per month for the ford on a 3 x 35 lease). The Etron (which replaces the ford as 7 seats no longer needed) is amazingly cheap (high £300’s to lease but done through the business so it’s pre tax money and zero bik, plus lower running costs) |
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Post by garry on Jun 8, 2020 11:26:00 GMT
And just to give a sense how some spend money, I know a guy, runs a decent business but not mega wealthy and he leases a Rolls Royce Dawn for well over £2k per month. Everyone has their own limits I guess!
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