Please, no offence intended, but put any spare £ into Premium Bonds and discover the joys of Bangernomics. With a Megane valued at £5k you are still well above that level.
Only borrow for property or to buy a business, and even then you can get your fingers burnt!
Fortunately for me, in 35 years of car ownership, I have never borrowed, or ever wanted to borrow, money for a depreciating lump of metal....which is a bit rich and a real trial of strength coming from an avowed petrolhead!
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Thanks everyone for your advice.
I am quite comfortable borrowing money and paying for the previlage. I am also happier with a newer not-so-banger car.
I have done the banger owning and am convinced on the psychological effect of owning a nicer car. Personal choice I suppose.
So I guess I am willing to lose more than I would if I bought out-right a cheaper car, I just want to minimize that extra amount.
I have the money to spend but I simply just want to make an informed decision, which seems impossible the moment a car dealer gets added to the equation.
Thanks for trying to help, I'm a lost cause obviously :-)
cheers
ben.
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If you must spend £21K on a Cooper convertible and have to borrow .........
I would maybe tone down the spec - buy a Cooper not a Cooper S
Look at the web/HJ Site and see (if anybody) is selling them at a discount - your £21K is almost certainly List Price - Autumn is not the time most people buy a convertible and there could be adeal to be done on the Price.
After getting a better Purchase Price see if you can get a better Finance Package for the car @ the Price you have negotiated.......................
Really Borrowing £17K for a £21K purcahse is not the wisest move.
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actually he's paying £24K including the list price and the finance charge.
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Benji, if taking PCP over 3 years, then you still need to pay the 10k at the end. Assuming you would then need to finance the 10k, say by taking a loan over 3 years, then in effect you are buying your car over a 6 year loan period.
Compare the PCP deal to, say a 5 year standard loan and you may find the loan a lot lot cheaper. Although be careful, with some loans, you can hand car back after paying 50% of loan, with others you cannot.
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2007 Seat Altea XL 2.0 TDI (140) Stylance
2005 Skoda Fabia vrS
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On PCP you are 250pm for 3 years, plus 5k deposit plus 10k to keep.
= 9k + 5k = 14k plus funding of 10k
10k over 2 years (at current rates) is 444pm, total 10669
so total is 24669 over 5 years.
a straight loan of 16k over 5 years = 311pm, total of 18693
plus your 5k deposit = 23693, a saving of about a grand.
Remember with PCP, you will be tied into a maximum mileage and face penalties for going over that.
Now I know there are lots of assumptions here, what interest you could earn on your money etc but still think its good for comparison.
[apologies for lack of pound signs but I cannot find them on my laptop, what it should be turns out to be a #]
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2007 Seat Altea XL 2.0 TDI (140) Stylance
2005 Skoda Fabia vrS
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Thanks everyone again, interesting reading.
BobbyG, thanks your post struck a cord... If circa £1k is the extra I pay for the PCP then somehow I feel it's not too bad.
The PCP gives me lower monthly payments, which I like.
If at the end of the 3 year the car is worth £14k and not £10k then I have £4k to put towards the next Mini. Or I can sell it privately. Or, I think, Mini will give me market value at the time.
The Mini is actually for my girlfriend and she's likely to want something new in 3 years.
I suppose the PCP allows you to put off part of the loan to the end of the term to keep the payments down, and you pay for that privelage
It has to be the Cooper S, the others are lacking. The model is the Sidewalk, so comes loaded with all the stuff you'd expect a car to have at a slightly lower price than if you were to add them yourself.
Thanks again everyone.
cheers
ben
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Personally there are plenty of things that I would rather have for that money, used boxster, brera etc
Or if I wanted a small car a suzuki swift
But girlies do seem to like the mini - do remember that the Cooper S is group 16 insurance which may be a significant extra cost.
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Of course there is a much cheaper alternative here that involves trading in current for a new chassis....... but I am not talking cars! :)
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2007 Seat Altea XL 2.0 TDI (140) Stylance
2005 Skoda Fabia vrS
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As has been pointed out, not only are you actually borrowing £16,000, not £6,000, but because you do not reduce the £10,000 part during the term of the loan the total interest is more than if you had paid off the £16,000 in level payments.
PCP is designed for dealers. The final payment ensures that most people will either have to find a lump sum in 3 years or walk back into a dealer as a captive customer, to be plucked again.
Dealers love to work to a monthly payment. They can play with prices, deposits, APRs and residuals to give themselves a good deal; the customer gets a deal he is happy with but frequently hasn't a clue whether it's the best he could have got, or anywhere near.
I would recommend breaking the deal down. Negotiate the price for the car; if there's a p/x deal with that separately - by all means sell it to the dealer but know what the real price of the new car and the true value of the p/x are.
When you know what you need to finance, go look for a loan. If the payments on the balance over three years are higher than you want to pay, consider whether you can put a bit more deposit in. Failing that, consider extending the loan term to 4 years. If you do decide to change the car at three years, you will owe a lot less, using your figures, than £10,000. You will have the option of keeping it without having to stump up £10,000 - you just continue the payments until you are ready, or you have paid the loan off. You will save money and not be a hostage to the deal. Of course if you can negotiate a better price on the car you might not have to borrow £16,000.
Oh, and consider very carefully whether you should buy Payment Protection Insurance - if you do want it, DON'T buy it with the loan, repeat DON'T - if it's not at least twice as expensive as a separate policy it will be the first time I have ever seen that be the case. This applies equally to dealer loans or bank loans - the banks offering competitive APRs make far more money out of PPI than interest margin.
Edited by Manatee on 07/10/2007 at 12:05
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[apologies for lack of pound signs but I cannot find them on my laptop what it should be turns out to be a #]
Switch on the numeric keypad on your laptop, hold down the Alt key and type 156 = £
I have to agree with the advice here after years of paying someone else to help me buy a car I then have to maintain, insure etc... better to save up and buy what you can afford.
If you must spend £24k on a car then there are much, much nicer cars around than a small Pug engined, vibey, MINI.
Edited by gmac on 07/10/2007 at 11:26
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Since you're intent on getting a convertible I trust that, when stationary, it will always be somewhere safe. One slit from a Stanley knife and ..............
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L\'escargot.
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>>Guaranteed value af £10,000 (after 3 years)
>>Amount left to finance: £ 6,000
>>Monthly amount: £ 250 (there abouts, got him down from £280)
>>We will have paid £ 9,000 for £6,000 of credit
>>For comparison a loan at current rates would be: £ 6,583
Except of course that you are actually financing £16000. I dont think you actually understand the finance package you are being offered.
You are borrowing £16K and paying back 6K of the capital plus interest of the whole amount over three years at the end of which you will pay the remaining £10K or hand the car back.
So at the end of three years you will have spent £14K and have nothing.
or you will have spent £24K and have a three year old mini.
It may be that the mini is worth more than £10K at the end of the three years, but what cars are advertised at in autotrader isnt what you get as a trade in and you will not be in a strong negotiating position.
But I'm another that doesnt believe in borrowing. Especially on cars.
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Lingscars.com offering Mini con for 199 PM +vat,seems cheap to me.
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