Ian
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Registered: 28th Aug 99
Location: Liverpool
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quote:
Originally posted by Corsa_Sport21
That to me would work out to be a pretty penny.
Cheaper than buying it cash.
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Corsa_Sport21
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Registered: 13th Apr 08
Location: Leven, Fife. Drives : 205 GTi
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How exactly??
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Chris x
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Registered: 11th Sep 08
Location: Bexhill
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quote:
Originally posted by Corsa_Sport21
You could probably actually come out on top in that case. Be in profit.
Bound to be worth around £3500 still??
Not sure how many miles Archies has done...but I have been looking at Type R's. Was a Milano Red, 94k Miles, 54plate, FHSH, new clutch (Honda), completely standard and in mint condition, that didnt sell at £3k.
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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Mines has just hit 90k, i've done 3k in it.
At 180 miles per tank i dread to think what i've spent on fuel.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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quote:
Originally posted by Corsa_Sport21
How exactly??
Because I'm taking the piss because it frustrates me that your (and most people's tbh) grasp of finance is so shit.
How can he be in profit? You mean he has equity in the car - yes of course if he pays enough off to offset depreciation.
That isn't a trick - that is paying more off than the car loses.
The loss curve is generally an exponent and the payment curve is normally a straight line, and they intersect at some point, and if he's paid it off quicker, they intersected a while ago.
Same as if he owed more, they would intersect later, but he's not down - the payments were less.
Not profit is it.
By that token if you buy a car cash you are in profit because the car is worth the full amount and you're giving none to a finance company. Notwithstanding the fact that you just bought a car.
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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So in reality i'm best off keeping it, taking it on the chin and learning my lesson the hard way ?
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Corsa_Sport21
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Registered: 13th Apr 08
Location: Leven, Fife. Drives : 205 GTi
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I would say its best off selling it. Going by what Ian is saying, you have already taken the biggest hit on it.
How much would you need to pay to settle it now??
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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Dont know my early settlement, but going by payments and period left £3500.
Once i finish and sell the Corsa thats money towards paying it off aswell, and a few big homers lined up which should help.
May just work towards paying it off then swapping for something i want.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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There's no 'bigger hit' then if you bought it cash.
The car depreciates either way.
You've paid a bit of interest, there we go. If you keep the loan and the car, you'll carry on paying interest. If you terminate the loan, you'll stop paying interest. Why is why your settlement figure is less than the balance outstanding.
No different at all to buying it cash. Market conditions which dictate what the car is worth do not care how the money is made available to buy it.
The finance deal might be shit, no idea, not done the maths on that. I'm just trying to get away from talking about financing the car like its some trap you now can't get out of.
Its just maths. I think the figures are on the other page, I'll work it out if you've got a good or bad finance rate if you wish, but at no time does that change the rate the car was going to lose money.
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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I think the general reality of it all is i'm more comfortable with having something bought and paid for, i dived in with 2 feet when it came to this.
£1100 is a lot to piss away if i was to get £3500 back for the car itself.
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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That's just expensive, newish cars for you, nothing to do with finance.
I think most of yours you have lost a tenner or sometimes made money? Can't do that with a flash motor like that one.
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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TBH Over the years i've owned over 50 cars, and maybe only lost money on 3 or 4 down to mechanical failure or swapped for something thats been a moneypit.
Edit - Majority of the time i've made money because of my trade, buying things needing attention, otr things like when i built my XE i sold it for double what it cost me to buy and build.
[Edited on 19-08-2012 by Archie]
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Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
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That's my point - this car being not like that is only partly due to it being financed.
In fact tell me more about the deal, was it from a dealer?
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Archie
Organiser: Scotland
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Registered: 18th Dec 07
Location: South Ayrshire
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Aye.
Was reduced from 4995 to 3995 as the manager special, which caught my eye.
Knocked it down to £3800 so i could get it there and then, given that i'd tax, service and MOT it myself (No biggie, its what i do)
£80 for service kit from Honda *Mates rate*
£20 for MOT from work.
£150 for 6 months tac (Due end of this month(
£700 deposit, paid cash on the spot, 7% interest rate, 24 monthly £152 payments, 2 month break before my 1st payment.
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Corsa_Sport21
Member
Registered: 13th Apr 08
Location: Leven, Fife. Drives : 205 GTi
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So Ian, are you saying that financing the car hasn't made him worse off than what he would have been to this day, if he bought the car outright?? Thats the impression im getting.
[Edited on 19-08-2012 by Corsa_Sport21]
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Ian
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Registered: 28th Aug 99
Location: Liverpool
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Not at all - that would be ridiculous - he's paid interest.
I'm talking about the car depreciating at the same rate.
I'm also talking about the situation to sell, which depends on both the depreciation and the finance agreement.
I said the car would have depreciated in either case. I also said that the finance agreement puts him in debt or equity, but it only does so as a result of what he's paid.
I could be in massive debt to a car, needing to pay off grands, you might think that is a bad situation, but if I told you the monthly payments were a fiver you'd see how it happened.
Likewise I could have a few grand equity in the car, sounds nice until you learn I was paying £600pm for a £6k car.
It truly doesn't matter how it looks. The only cost to financing is the interest. In this case the cost has the potential to be £700 + (24 x £152) = £4348, minus the cash price.
I'm ignoring the £250 to get it on the road although that actually just effectively increases your deposit figure to £950.
Either way, the cost to finance would be £548 if you went the full term.
If you don't, its less. That's still the only cost though. Being badly off by owning the car is just because its from a dealer so £500 too expensive, it doesn't need anything fixing and Archie is selling as a private individual. All that together puts him in that situation in contrast to his other cars. The £500-odd interest just makes it look a bit worse, but that isn't for me the whole picture.
[Edited on 19-08-2012 by Ian]
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