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      05-24-2008, 12:32 PM   #1
scooba0010
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VW FINANCE

can any one offer any sound advise on finance please.I always pay cash when i change my car i normally accept some shit offer on the px and give the guy a cheque a week or so before the car is ready to be collected.

This time i thought i would attempt to sell my car private and negotiate hard for a outright cash purchase on the golf gti.I think i have done ok at around 9% on a car in stock exactly to my wifes spec.

Now i have the dealers financial services manager wanting me to use there finance he mentioned 3.4 % flat rate and has sent me a couple of examples by email in one it mentions 8% apr .sorry to be thick but that doesnt sound very good or is it ?

EXAMPLE 1 IS 36 times 295.53 plus 159 arrangment fee plus 99 final fee it seams there is 939 interest on a loan of 9700. so i guess a cost of 1200 for the 9700 finance .

I have quite a stash put away on fixed term of 6.4% in a bond is it better to pay cash or just let this guy sell me something

any advise would be good thanks
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      05-24-2008, 03:23 PM   #2
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Originally Posted by scooba0010 View Post
can any one offer any sound advise on finance please.I always pay cash when i change my car i normally accept some shit offer on the px and give the guy a cheque a week or so before the car is ready to be collected.

This time i thought i would attempt to sell my car private and negotiate hard for a outright cash purchase on the golf gti.I think i have done ok at around 9% on a car in stock exactly to my wifes spec.

Now i have the dealers financial services manager wanting me to use there finance he mentioned 3.4 % flat rate and has sent me a couple of examples by email in one it mentions 8% apr .sorry to be thick but that doesnt sound very good or is it ?

EXAMPLE 1 IS 36 times 295.53 plus 159 arrangment fee plus 99 final fee it seams there is 939 interest on a loan of 9700. so i guess a cost of 1200 for the 9700 finance .

I have quite a stash put away on fixed term of 6.4% in a bond is it better to pay cash or just let this guy sell me something

any advise would be good thanks
3.4% flat rate would probably be about 7.2% APR depending on fees. 8% APR is a little high for current rates as you could get a personal load for 6.5%. Not awful though.

If you use your bond money you lose 6.4% interest. If you take the finance you lose 8% interest. The net difference to you is 1.5% and that's the true cost of the finance to you - not the 1200

There isn't much in it so the key question is do you want to keep your debts down or you cash liquid.
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      05-25-2008, 02:21 AM   #3
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Thanks NFS,

I have just read the email again its flat rate of 3.24% and 8% apr the costs for arranging and clearing on final payment is approx 250 .

I borrowed 2k in 1985 from mercantile credit over two years to buy a Ford escort RS1600I when i was about 21 years old .Because my father with drew his interest free loans as he considered changing cars every 6 monthe rediculous.I paid my monthly payment on time and by month 6 had enough to clear the final 18 payments i expected some discount on the interest but at the time that wasnt the case for early settlement,I decided then Finance was bad news and to me a mugs game .

I think over the years things have changed and i should look again with open eyes ,I could take the 50/50 deal where i pay half deposit and finance the rest leaving the 50% in my current account i will see what rate that pays ?

Next question do you think the rate offered is fixed for the term of the loan ? .or do loans fluctuate with the likes of motgages ?

I have sent the guy a email saying that 8% is to much and i would be interested at 5.25% apr would that be a good rate ?.

I suppose the guy works on commision ?

I will let you know how i get on Paul
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      05-25-2008, 02:24 AM   #4
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vw offers 4.9 and even 0 % with good credit right now
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      05-25-2008, 02:32 AM   #5
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WTF ,so the financial guy is Taking the pi$$. Im now thinking my gut reaction is /was right ,

Please can you tell me where that info comes from ?

Thanks in advance Paul


My original plan was to pay in full by debit card ie on the day from my account in full ,the sales man asked me to here what the financial services guy had to offer with open ears .Please listen to David he may change your mind . .

$ly little to$$er
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      05-25-2008, 03:58 AM   #6
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WTF ,so the financial guy is Taking the pi$$. Im now thinking my gut reaction is /was right
0% or 4.5% offers are not 'real'. Just think about it, you can make more money than that by putting your money in the building society. Why would they be selling you finance at a loss?

These low finance rates are just discounts in disguise. I recently bought a new VW Polo and the discounts on drivethedeal.com were the best I could find. I got about 12.5% of the list price. But ... To get the 0% finance you normally have to buy at list! So it may well be MORE expensive than a decent discounted deal with 7.2% APR (which is the current best personal loan rate).

http://www.moneysupermarket.com/loans/

You've negotiated a decent discount at 9% push for a lower rate by all means, but I think you will struggle to do much better than 7% at the moment.

If you borrowing less than 25K the loan will be regulated and the agreement will detail the costs of early settlement. Check these carefull to see what interest you will be charged.

As I said before, also remember that if you spend your cash it has gone. If you invest that money and take finance the interest earned on the savings will offset the cost of the loan.
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      05-25-2008, 04:15 AM   #7
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I think in your case as you have the money to buy the vehicle if you want to keep all or some of your money liquid for saftey net or other investment opportunities.

In this is the case the personal loan option feels better as the money will not be tied against the car. Therefore if you sell say after 1 year you will not have any penalty as car and finance are seperated.

Also from a savings perspective there will be taxed owned unless it's in an ISA or pension 'rapper' so hence the real difference between the loan rate and savings on 10k is probably pretty minimal to someone like yourself. Lets say worse case 400 to 500 with interest and charges differences.

Do you want to pay 10 to 13 a month extra to have 10k freed up is the real question.
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      05-25-2008, 05:30 AM   #8
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Hi savings rates at current are awful so it stack up finance will be cheap with global interest rates low as well, Being a bit on the tight side i sort of new the answer you are proberbly right the dealer would like to make a few quid extra on the deal .I m pleased with the 9% off and i am not buying a car with loads of extras i dont want either ,This is for my wife to take her dog out in thats about it maybe shopping .What i did think was strange was how much tighter the deals on vws are over BMs it was a real struggle to get something off .

I will pay them cash ,its hassel this finance thing .Im waiting now to see where property goes ,I am after some bargins if there is some to be had in the next year or so and i dont think that 10k will make much difference to the scheme of things thanks for the advise Paul

just out of curiosity has ant397 returned from his vacation ? i sort of was after a set of csl rims but now i have done some money on a gti i am struggling to justify the expense at present .

But once the mini is sold i may be tempted to enquire again .I just had the mini fully sorted out by a local company called attention to detail he done a top job and the car is mint .
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      05-25-2008, 07:56 AM   #9
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Sccoba

Have you not condisidered a lease type deal? They work out quite well and you can keep your money in the bank......

http://www.smartlease.co.uk/golf-sport-gt.html

http://www.smartlease.co.uk/golf-gti.html

http://www.smartlease.co.uk/golf-gti-5door.html

All seem pretty good? 3 months deposit and then just hand it back after! I have had my last 3 cars like this and as long as your not doing high mileage works out pretty economical.

Just a thought?

Paul
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      05-25-2008, 09:57 AM   #10
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Hi thanks for all the ideas
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