6.9% finance rate jumped to 10.9%!!

[Sidicks]

I dunno if things are different in the UK, but I’ve never heard of a loan offer locking its rate for 9 months. Expecting anyone to honor an interest rate from last June seems crazy with how rates have been changing. Usually 60 days is the max.

Things aren’t different in the UK - you aren’t locking in the rate, you are locking in the borrowing - had rates declined significantly instead, I doubt the OP would have been happy paying 6.9% if market rates were 3.9%.

The key point is that the OP has the option to take out finance with any firm he chooses, and is quite likely to find terms that are better than available from the OPC.

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[TheSauce]

To be fair though, you are in a completely different financial market with so many variables that are different, so your own experience in the states bears little resemblance to ours and vice versa.

Totally true, that is fair. Where did interest rates sit at a year and a half ago there?

 

[Fish Fingers]

There have been other threads discussing this for UK buyers.

Iirc some dealers honoured the rate after a certain point (lock in)?

 

[RingoDingo]

Totally true, that is fair. Where did interest rates sit at a year and a half ago there?

I don't miss the days of free money and dumb people getting rich off of imaginary and wasteful things like NFTs, but I do miss not paying an arm and a leg for reasonably less risky loans. Sad face and sympathies.

 

[jahall333]

Been looking at other financing options, rates lower, but "subject to elegibility"... My small business is 4 years old so need to check it out... Thanks all for your ideas and advice!

 

[Raphie]

But 10% over 120k, that’s
9.5k Y1
7k. Y2
5k Y3
2k Y4

that’s 26k interest for just driving a Porsche that’s over 20% of the buying price on interest. Why would one do that?

 

[jahall333]

But 10% over 120k, that’s
9.5k Y1
7k. Y2
5k Y3
2k Y4

that’s 26k interest for just driving a Porsche that’s over 20% of the buying price on interest. Why would one do that?

Here's the detail.... Prices are GBP...
Thanks

 

[DerekS]

The only way to avoid getting gouged on financing is to walk in with your own prearranged.

It's a profit center.

 

[Raphie]

It’s not even a purchase?!? It says rental, so operational rather than financial lease?
i traded in my Merc and took cash out of my savings account, I bought cash and the car is mine, from day 1, no interest. Why would one pay that much premium just to look pretty?

 

[kempez]

It’s not even a purchase?!? It says rental, so operational rather than financial lease?
i traded in my Merc and took cash out of my savings account, I bought cash and the car is mine, from day 1, no interest. Why would one pay that much premium just to look pretty?

It’s a personal contract purchase (PCP), very common in the UK and when the rates aren’t ridiculous, a relatively safe way to buy a car if you aren’t sure you’ll want to keep it more than 3-4 years.

 

[Raphie]

But what happens after 4 years? You need to give it back?
If so, you give them 20k cash, pay another 47.4k in the next 48 months and after that they take the car back and you’re left empty handed? All of that for only a 89k car? Looks like desperate to me?
the car is worth way more than 22k after 4 years.

you already have 20k, so that leaves a 69k cash gap, paying 47.4k + 20k to rent the car for 48 months just is crazy. If you make like 200k a year you can save up that gap while waiting. If you make less I wouldn’t look at financing as 1k per month for just a car is then already a considerable commitment IMHO.

 

[jahall333]

But what happens after 4 years? You need to give it back?
So you give them 20k cash, pay another 47.4k in the next 48 months and after that they take the car back and you’re left empty handed? All of that for only a 89k car? Looks like desperate to me?
the car is worth way more than 22k after 4 years.

After the 48 months you pay a balloon payment of 48K then you own the car outright...
Or, you hand the car back and they give you the equity as a deposit on a new Taycan (so no 2nd deposit), and you just continue with the monthly payments for another 48 months...

 

[Raphie]

Ok, so I misread.
the car is 90k when paid in cash
you do a down payment of 20k
which then leaves 70k to be financed
to finance that 70k you will pay 95k (25k premium) in 47 installments totalling 46k
and then 48k as final depositand then the car is yours.
but that’s still a 28% premium on the cash price.

 

[jahall333]

Ok, so I misread.
the car is 90k when paid in cash
you do a down payment of 20k
which then leaves 70k to be financed
to finance that 70k you will pay 95k (25k premium) in 47 installments totalling 46k
and then 48k as final depositand then the car is yours.
but that’s still a 28% premium on the cash price.

Yep!
That's how most people buy a car, I think!

 

[Raphie]

It’s how bad one wants it I guess, I would rather save up and pay cash and keep the 25k in my pocket. But I’m looking from a consumer perspective. If you buy this on your company and you can deduct the interest it might be a different story. I‘m not familiair with the UK specifics.

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