nerfherder Posted January 15, 2009 Report Share Posted January 15, 2009 A salesman from my local OPC rang me this morning to see if I was still looking for an early 987 3.2 S around £20k. Yes, I am (although I haven't done anything over the holidays). My current plan is to sell my car privately for £8k and get a personal loan for £12k over 3 years. That would have repayments of £375/month, and leave me with a 6 year-old car worth £10k(?) at the end. The cheapest on the OPC network is £22,991 (about £3k more than a dozen on Autotrader), and the salesman talked up the benefits of buying from an OPC (as you would expect him to do). He also started talking finance. I explained my plan, and he asked if I'd thought about Lease Purchase, and explained it briefly. Even though I deal with figures every day, these car lease/hire schemes do my head in, and I'm very wary of anything that sounds too cheap ("You can afford a newer car with the same payments" - "Hmm, OK, what's the catch?). I understand how and why a loan works - I borrow money off you so I can have a lump sum now, and you charge me interest on that money (as well as me having to repay you the money I borrowed). But the whole lease/balloon thing just doesn't seem to click in my brain. So, I have an appointment to talk to him face-to-face on Saturday morning to discuss Lease Purchase, and for him to value my car for trade-in. I'll do some reading up about Lease Purchases, but I wonder if any of you can explain it simply to me - especially any pitfalls or gotchas I should look out for? Link to comment Share on other sites More sharing options...
Chippy Posted January 15, 2009 Report Share Posted January 15, 2009 I'd be interested too....maybe I'll be able to get the DB9 afterall Link to comment Share on other sites More sharing options...
Araf Posted January 15, 2009 Report Share Posted January 15, 2009 Like gamblers forgetting about the times they lose, people on PCP's overlook the fact that they put a deposit down first...... Link to comment Share on other sites More sharing options...
Necroscope Posted January 15, 2009 Report Share Posted January 15, 2009 Let me know how you go, as its something i was thinking about as well. Link to comment Share on other sites More sharing options...
PaulB Posted January 15, 2009 Report Share Posted January 15, 2009 Like gamblers forgetting about the times they lose, people on PCP's overlook the fact that they put a deposit down first...... Exactly! Link to comment Share on other sites More sharing options...
NickFrog Posted January 15, 2009 Report Share Posted January 15, 2009 "You can afford a newer car with the same payments" - "Hmm, OK, what's the catch The monthly payments are meaningless. It's the "real world" total cost of ownership/finance for the entire lenght of the ownership that counts. Link to comment Share on other sites More sharing options...
nerfherder Posted January 15, 2009 Author Report Share Posted January 15, 2009 "You can afford a newer car with the same payments" - "Hmm, OK, what's the catch The monthly payments are meaningless. It's the "real world" total cost of ownership/finance for the entire lenght of the ownership that counts. I was just thinking the same thing as I was at the gym over lunch, and decided to knock up a spreadsheet showing exactly that for the loan. Then I can do the same for the figures the salesman gives me, and understand how much extra it would cost me. edit: OK, these are the figures showing total cost (excluding tax/insurance/service/fuel) of a personal loan: Value of my car = £8k 3 y/o Boxster price = £20k Cost to change = £12k Total payments over 36 months = £13.5k Value of 6 y/o Boxster = £11.5k Total cost over 3 years = £8k (my car) + £13.5k (finance) - £11.5k (Boxster value) = £10k That sounds about right. Let's see how the figures work out for this Personal Lease thing... Link to comment Share on other sites More sharing options...
Greenie Posted January 15, 2009 Report Share Posted January 15, 2009 My 56 plate Boxster was financed using the Porsche finance scheme. Its on par with most other manufacturers deals that I've experienced in the past. I think they work best for people like me who don't intend to keep their car for longer than the initial 3 year payment plan, as the 'minimum future value' (or what you still owe at the end of the agreement) in theory should be less than the actual trade in value, giving you some equity to put towards your next pruchase. This suits my circumstances, as it allowed me to buy a much newer car initially, as the finance monthly payments are based on the difference between the cost of the vehicle, less the minimum future value. My car has minimum future value set at £14850 (what you still owe after the 3 year finance deal), so in theory should give me a few thousand pounds towards my next purchase.... Hope this makes sense and helps! Steve Link to comment Share on other sites More sharing options...
Araf Posted January 15, 2009 Report Share Posted January 15, 2009 I think they work best for people like me who don't intend to keep their car for longer than the initial 3 year payment plan, as the 'minimum future value' (or what you still owe at the end of the agreement) in theory should be less than the actual trade in value, giving you some equity to put towards your next pruchase. Steve Also, if you have a look at the expense figures for Jeoff's 986, then you'll see that he spent nothing on maintenance for the first couple of years of the car's life. After that, the bills start. Link to comment Share on other sites More sharing options...
edge Posted January 15, 2009 Report Share Posted January 15, 2009 I may look at that next time I go for a new car as I have started to wonder if splashing such a large amount of cash out in one hit was or is such a good idea. Link to comment Share on other sites More sharing options...
nerfherder Posted January 15, 2009 Author Report Share Posted January 15, 2009 My 56 plate Boxster was financed using the Porsche finance scheme. Its on par with most other manufacturers deals that I've experienced in the past. I think they work best for people like me who don't intend to keep their car for longer than the initial 3 year payment plan, as the 'minimum future value' (or what you still owe at the end of the agreement) in theory should be less than the actual trade in value, giving you some equity to put towards your next pruchase. This suits my circumstances, as it allowed me to buy a much newer car initially, as the finance monthly payments are based on the difference between the cost of the vehicle, less the minimum future value. My car has minimum future value set at £14850 (what you still owe after the 3 year finance deal), so in theory should give me a few thousand pounds towards my next purchase.... Hope this makes sense and helps! Steve Thanks Steve - can I go through this to see if I've got it right? You bought new (I guess) for (for example)£34,850 and set your MFV to £14850, meaning you financed £20k (assuming you didn't put in a deposit). The total payments for that over 3 years would be something like £22.5k. A 3 y/o Boxster will be worth something like £17850, so you would end up with £3k equity in your car. Your total cost to finance would therefore be something like £22.5k-£3k = £19.5k over the three years? Link to comment Share on other sites More sharing options...
Notb4eleven Posted January 15, 2009 Report Share Posted January 15, 2009 On the MFV, the contract provides for 'deductions' for damage to the car, worded very loosely. So, in theory, OPC could say you surrender value is £14850 less £xxx for those scratches on the side door etc. OPC finance people were very vague (absolutely shyte) in explaining their standards on what constitutes damage. Anyone here have any experience of this? I've got one of these, and my neighbour has to decide what to do with his Cayenne in April, also got a MFV. Link to comment Share on other sites More sharing options...
Greenie Posted January 16, 2009 Report Share Posted January 16, 2009 The article prompted me to check out my finance info....and sorry - I've got it wrong! I'VE GOT A 4 YEAR DEAL, NOT 3 YEARS...DOHHH! Anyway, here's the actual figures as per my arrangements with Porsche Colchester..... My car was 8 months old and a very high spec. The screen price was £32995 (its new price with options would have been £38K, and with only 3Kmiles on the clock, I felt I got a good deal) So, here's the sums: - Price - £32995 deposit £4000 Balance £28995 1st payment = £540.29 47 payments = £465.29 1 payment = £14850 I think the APR was about 8%, so not brilliant, but average at the time. Some more explanatiom....when I buy my cars, I set a monthly repayment budget and so don't really take into consideration how much the whole package is costing me. I don't intend to keep the car beyond this year, so won't pay the full of credit as detailed above. I know its a costly way to buy a car, but this was the only way I could finance/replace my old 986 with a car I fell in love with. The 986 was a p/x'd at a reasonable price (went towards the deposit) Anyway, sorry for the mis-information! Steve Link to comment Share on other sites More sharing options...
Araf Posted January 16, 2009 Report Share Posted January 16, 2009 £8k in interest - or £172 per month. Link to comment Share on other sites More sharing options...
nerfherder Posted January 16, 2009 Author Report Share Posted January 16, 2009 The article prompted me to check out my finance info....and sorry - I've got it wrong! I'VE GOT A 4 YEAR DEAL, NOT 3 YEARS...DOHHH! No problem. Thanks for the detailed info - it gives me an idea for comparison. I think, if my figures are correct, and assuming a 4 y/o Boxster is worth £15k (going off current figures), that if you kept it for the full 4 years the total cost of finance would be £26k (£4k deposit + £22k payments + £0 [value of car - GFV]). Link to comment Share on other sites More sharing options...
Araf Posted January 17, 2009 Report Share Posted January 17, 2009 How did you get on? Link to comment Share on other sites More sharing options...
nerfherder Posted January 17, 2009 Author Report Share Posted January 17, 2009 How did you get on? Well, it all seemed good until I sat down at home, plugged the figures into my spreadsheet and worked out total cost of ownership was £11k more than my original plan! The salesman was pleasant to deal with - knowledgable and patient. I spent a total of 2 and a half hours there, including a test drive of a new 3.4 demonstrator. He looked at my car, we talked finance, what I could afford, what I couldn't. The longest part was when he went away to get a trade-in value for my car, speak to OPC Nottingham (who had sold the car I was interested in), and work out figures for another car Newcastle has just got in (which was £3k more than the Nottingham car, which was £3k more than I said I was prepared to pay...). The good news is that he offered me a trade-in price of 8k on my Civic Type-R. That's nearly £2k above book price, and about what I'd be able to get with a private sale - probably. The bad news is that the finance is as follows: Boxster price: £26k Part-ex: 8k Monthly payments: 36 * £304 (=£11k) Balloon payment: £13k So, total payments = £32k cost of credit = £6k The spec on the car was as follows: Boxster S 3.2 2005/05, 20k miles, Midnight blue, 19" carrera wheels, xenon, Bose, ocean blue full leather, sports chrono, PASM, hard top, auto a/c, cruise, leather sport seats, leather 3-spoke steering wheel. So, the car he had available is a much higher spec than I would have gone for, and the total payments are more than I'm prepared to make. I'll let him know that when he rings me in a couple of days. Link to comment Share on other sites More sharing options...
plastech Posted January 17, 2009 Report Share Posted January 17, 2009 How did you get on? Well, it all seemed good until I sat down at home, plugged the figures into my spreadsheet and worked out total cost of ownership was £11k more than my original plan! The salesman was pleasant to deal with - knowledgable and patient. I spent a total of 2 and a half hours there, including a test drive of a new 3.4 demonstrator. He looked at my car, we talked finance, what I could afford, what I couldn't. The longest part was when he went away to get a trade-in value for my car, speak to OPC Nottingham (who had sold the car I was interested in), and work out figures for another car Newcastle has just got in (which was £3k more than the Nottingham car, which was £3k more than I said I was prepared to pay...). The good news is that he offered me a trade-in price of 8k on my Civic Type-R. That's nearly £2k above book price, and about what I'd be able to get with a private sale - probably. The bad news is that the finance is as follows: Boxster price: £26k Part-ex: 8k Monthly payments: 36 * £304 (=£11k) buy it you girl............ Balloon payment: £13k So, total payments = £32k cost of credit = £6k The spec on the car was as follows: Boxster S 3.2 2005/05, 20k miles, Midnight blue, 19" carrera wheels, xenon, Bose, ocean blue full leather, sports chrono, PASM, hard top, auto a/c, cruise, leather sport seats, leather 3-spoke steering wheel. So, the car he had available is a much higher spec than I would have gone for, and the total payments are more than I'm prepared to make. I'll let him know that when he rings me in a couple of days. Link to comment Share on other sites More sharing options...
Araf Posted January 17, 2009 Report Share Posted January 17, 2009 Surprising, how easy it is for them. They've offered £2k over book for yours, but say nothing about the fact that £26k is year old 3.4 territory, and their 05 plate 3.2 is £6-7k over the bottom of the market. This is where soooo many people get caught, and then feel cheated by Porsche. Anyway, the figures. Basically, buy it, run it for three years, and at the end of that, you will still have to find £13k (which will probably be the going rate for a 6/7 year old Boxster). Failing that, walk away from the balloon and you've done £19k. I think I'd also say "No thanks." I reckon the figures would be similar for a brand new 2.9 Gen2...... Link to comment Share on other sites More sharing options...
NML Posted January 18, 2009 Report Share Posted January 18, 2009 Head and heart stuff going on here. If you are still thinking of financing I'd say you are going to be better off going private (and being picky) and getting a warranty. Think about the price the guys got who traded in the cars you were looking to get from OPC. Link to comment Share on other sites More sharing options...
nerfherder Posted January 18, 2009 Author Report Share Posted January 18, 2009 Yeah, thinking about it some more over night has confirmed in my mind that my original plan is the way to go - selling private and then buying with cash (via a personal loan, which will only cost me about £1.5k credit) from either an OPC that is willing to drop its price by a vast amount, or from a decent independent garage like Cridfords. I'll stick mine on Autotrader today for £8.5k and see if I get any interest. Link to comment Share on other sites More sharing options...
Northeast Canuck Posted January 18, 2009 Report Share Posted January 18, 2009 I used to own a 987 that I bought from the OPC at Newcastle. At the time I signed up for a "balanced payments" scheme which is now no longer available. But the principle was similar in that there was a balloon payment. The important thing however was that the balloon payment was NOT a guaranteed future value! ie, if the car was worth less then I would have to make up the difference, or pay the balloon some other way, etc. I think that they have a lease deal which is available to business which has GFV but I don't think that this is available to private buyers. The bigger the balloon payment, the bigger the risk to you. They will manipulate the balloon payment to get your monthly payments down - beware! In the end, I had paid over the odds for the car and had to take a shower when I sold it. Porsche have given you a favourable deal on your trade-in because they know that if they don't they probably won't be able to do a deal with you - AND - they don't have to discount their car very much, if at all. The problem for you is that you effectively pay over the odds for the car itself and are immediately in quite a lot of negative equity - unless of course you own the trade-in outright in which case you simply lose much of the value of your deposit instead. Either way, they win. You should look around for a private finance deal. The Porsche finance is VERY expensive, I believe around 8.9% at the moment. They make thousands out of you this way. I am currently looking for a 997 and have been able to obtain private finance quotes at 6.6% which is much better than what Porsche can offer. The problem with this particular deal is that the car itself has to be quite expensive so I don't think that the Boxster would qualify. But still worth shopping around I think. Good luck! Link to comment Share on other sites More sharing options...
nerfherder Posted January 18, 2009 Author Report Share Posted January 18, 2009 You should look around for a private finance deal. The Porsche finance is VERY expensive, I believe around 8.9% at the moment. They make thousands out of you this way. I am currently looking for a 997 and have been able to obtain private finance quotes at 6.6% which is much better than what Porsche can offer. The problem with this particular deal is that the car itself has to be quite expensive so I don't think that the Boxster would qualify. But still worth shopping around I think. Good luck! Yeah, I think you're spot on with your analysis of the Porsche finance, and them trying to make the deal look sweet by over-valuing my trade-in. Best finance I've seen for a personal loan is 7.8% either from yourpersonalloan.co.uk, or from Lloyds bank (I'm a customer, and they keep sending me letters begging me to borrow huge amounts of money at this rate). I do like the idea of a personal loan, because the car is then mine to do with as I please - as long as the direct debit keeps coming out of my account every month, the bank don't care. Link to comment Share on other sites More sharing options...
hornetrider Posted January 18, 2009 Report Share Posted January 18, 2009 They've got a cheek valuing an 05 987S at 26k! There's a stunning one on PH at sub 20k. http://www.pistonheads.com/sales/734991.htm Link to comment Share on other sites More sharing options...
Northeast Canuck Posted January 18, 2009 Report Share Posted January 18, 2009 If you are going to just get a bank loan, you really should consider buying privately. Proper finance deals usually require you to purchase from a dealer, either network or indy, but bank loans do not. There are some great deals around on private sales and although I would be very cautious and do all the relevant checks etc (which are detailed in great length on this website), you will get a much keener deal than you would from an OPC. If you are nervous though, I would buy from an indy like Stirlings or Cridfords or 911virgin. You will get as good a service but without the massive markup! Good luck! PS I miss my Boxster, just drove past it today - it was going the other way........ Link to comment Share on other sites More sharing options...
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