Finance Advice required for buying new car.

pcr · 2nd March 2008, 15:29

I ask this on behalf of a family member, all replies much appreciated.

Planning on buying a cheap new car for around £8500, have an 8-year old 206 (poor condition) to get rid of. Can pay cash but prefer not to. HP appeals more than PCP or lease due to mileage limitations.

Am tempted by the discounts offered by these Internet companies, can anyone recommend one of these, what are the pitfalls.

DeanFYoung · 2nd March 2008, 15:43

What kind of car are they after? Honda?

That money will get you used Lotus Elise S1...

pcr · 2nd March 2008, 16:09

Sorry Dean, this is for a very basic runabout, VW Polo type.

FWH · 2nd March 2008, 16:12

I quite like the Toyota Aygo for a basic runabout.

DeanFYoung · 2nd March 2008, 16:22

In that case may I suggest a Skoda Fabia or Seat Ibiza - both good value for money, decent kit levels and well built

pcr · 2nd March 2008, 16:29

Thanks guys, but what do you think is the best way to buy it ?.

cb550 · 2nd March 2008, 17:23

My Partner's looking for a small hatchback-been on the internet comparing prices etc.Visited a local car 'supermarket' yesterday and they have an '07 fiesta 3 door style for £5995 and Grande Punto's similar spec. same price /year.

So far these are the best prices I've found,although new Sirions are on offer at £6995 which have a very good spec.She intends to purchase by cash(bank loan)

ghowarth · 2nd March 2008, 18:09

Hyundai release the rather smart looking i10 soon, and is a good price at around 6k with good spec levels.

dragonglance · 2nd March 2008, 18:27

For that kind of money you could get a brand new Citreon C3, (i did not say that name btw guys) it is just a figment of your imagination.

terry · 2nd March 2008, 18:37

If you have the cash there is little to be gained by going for HP.
I'd say the car supermarkets (Trade Sales/Motorpoint/Car Giant etc.) are very good value if you are not after one of the latest models....I have bought 3 nearly new cars over the years and all have been OK, they had the remainder of the manufacturers warranty too.
At those places you pay the sticker price, they don't usually haggle as their margins are lower than main dealers. I did save a couple of hundred on one of the cars, the price had been reduced from when I enquired to when I actually went to buy!

Terry

pcr · 2nd March 2008, 18:54

The reason for considering HP is to maintain some savings for other things while paying only an easily affordable monthly amount.

I agree you can get a good deal at car supermarkets. The ones I've been to also have new cars, but I'm never sure if they are "grey imports", if that's the term. Also, I'm guessing that part-ex of an old car is not on at these cut-price outlets.

I'm afraid the chose of car is not mine but will pass on your recommendations. Thanks.

TTDegs · 2nd March 2008, 21:19

no idea how much an 8 yr old 206 is worth, but if they can stand the hassle factor, selling private will generally get you more money

by HP / PCP I take it they are looking for some sort of ballon payment thing at the end?

NH Dan · 3rd March 2008, 09:15

[quote=cb550;152548]My Partner's looking for a small hatchback-been on the internet comparing prices etc.Visited a local car 'supermarket' yesterday and they have an '07 fiesta 3 door style for £5995 and Grande Punto's similar spec. same price /year.

So far these are the best prices I've found,although new Sirions are on offer at £6995 which have a very good spec.She intends to purchase by cash(bank loan)[/quote]

why?? try considering finance from the car dealer. its ecured against the vehicle and quite often can be at a better rate than the banks. If the dealers weren't competitive then they wouldn't sell finance. Be vary careful with bank adverts of 'APR 5.9%' etc as often this is for much higher amounts than you actually want to borrow.

gjackson · 3rd March 2008, 12:25

Without wishing to sound anal financial advice in the UK is regulated and therefore no one unless qualified can give you firm specific advice on here.

Generally though.

It is better to have no loans than a loan and savings.

The dealer may be able to get a lower apr than you can a loan. However this is because the loan is secured against the car (and they get a commission).

In the same way Mr. Car Salesman says beware of the banks advertising rate also be careful of the dealers headline rate as these are often variable as well depending on the model/optional extras/your deposit/mileage allowance. Additionally you could be tied to the dealer network for servicing - there are anti competion laws against this for your warranty though these don't apply to PCP and some HP because the car belongs to the finance company not you so they can stipulate who maintains the car.

A cheeky way to do get the dealers finance incentives is to put the biggest deposit down possible and then pay the finance off early, some agreements allow this without penalities if done say within 14 days. Your dealer won't be happy though as they tend to loose their commission for the finance.

Tongue in cheek comment - If the dealers were competitive they would employ customer service staff and not sales peeps

TTDegs · 3rd March 2008, 13:02

at the end of the day - get lots of quotes, and make sure that they include a 'total amount payable' figure, which is the important bit

Some, less scruplious, finance companies will include up front 'admin' charges whilst at the same time advertising a low APR.

But they all have to (or at least are supposed to!) provide you with a total cost charge, which has to include these 'admin' fees

cb550 · 3rd March 2008, 14:30

[quote=NH Dan;152785]

Quote:

Originally Posted by cb550

My Partner's looking for a small hatchback-been on the internet comparing prices etc.Visited a local car 'supermarket' yesterday and they have an '07 fiesta 3 door style for £5995 and Grande Punto's similar spec. same price /year.

So far these are the best prices I've found,although new Sirions are on offer at £6995 which have a very good spec.She intends to purchase by cash(bank loan)[/quote]

why?? try considering finance from the car dealer. its ecured against the vehicle and quite often can be at a better rate than the banks. If the dealers weren't competitive then they wouldn't sell finance. Be vary careful with bank adverts of 'APR 5.9%' etc as often this is for much higher amounts than you actually want to borrow.

Fair points there,and yes the whole financing thing can be a bit of a minefield for the unwary.The salesman for the Fiesta was very keen to offer terms,which after all is offering buying options.I did say if we followed the vehicle up we would at least look at what was on the table.

NH Dan · 3rd March 2008, 14:49

Quoting GJACKSON :

Without wishing to sound anal financial advice in the UK is regulated and therefore no one unless qualified can give you firm specific advice on here.Any car salesman (or come to think of it, member of staff) that is involved in offering financial or insurance products and advice HAS to be qualified thru the FSA - Financial Services Authority. If you doubt the qualifications of the member of staff in question, then you only have to ask to see their accreditation. If you doubt any of this or the level of professionalism involved, please feel free to come and see my desk and just how much paperwork is created by each deal that is done, all of which is to ensure that the customer is in the best of knowledge of what they have agreed to purchase and the function of the product that they have purchased.

Generally though.

It is better to have no loans than a loan and savings.correct

The dealer may be able to get a lower apr than you can a loan. However this is because the loan is secured against the car (and they get a commission). Not a negative point then. the loan is secured against the vehicle, enabling you to obtain a lower APR/interest rate and also have the future potential to obtain a personal loan if needs be for other matters.

In the same way Mr. Car Salesman says beware of the banks advertising rate also be careful of the dealers headline rate as these are often variable as well depending on the model yes/optional extras no/your deposit (amount borrowed to be precise)/mileage allowance -not usually.
??? Any rate quoted to a customer and subsequently SOLD to a customer is a fixed rate unless specified otherwise. Yes , there may be differeing rates available dependant on what offers are currently in the marketplace but none that I know of on variable rates. Additionally you could be tied to the dealer network for servicing - there are anti competion laws against this for your warranty though these don't apply to PCP and some HP because the car belongs to the finance company not you so they can stipulate who maintains the car.No change there, the anti competition laws remain the same no matter who the owner is of the vehicle. As long as the car is serviced in line with the manufacturers recommended schedule and the recognised tooling and Honda UK parts are used, then you are fine.

A cheeky way to do get the dealers finance incentives is to put the biggest deposit down possible and then pay the finance off early, some agreements allow this without penalities if done say within 14 days. Your dealer won't be happy though as they tend to loose their commission for the finance.Not cheeky really, a dealership (or any supplier who obtains commission) will suffer a clawback period at some point. As always, when you choose to pay off your obligations is entirely up to you and your circumstances, if the finance has been sold properly then you shouldnt need to do this.

Tongue in cheek comment - If the dealers were competitive they would employ customer service staff and not sales peeps

you mean as in order takers??

TTDegs · 3rd March 2008, 15:51

nicely summed up there

pcr · 3rd March 2008, 17:39

Thanks again for the replies, I know a little more about financial loans now.

The old car will be sold privately, which will fall on me to prepare it, being the only one with time and spanners in the family.

A deposit of £4000 will be paid, the rest by HP.

Now just need to get a decent discount.

You know, considering the lack of hassle involved, I can see the appeal of driving your old banger to the dealers, half-hour of paperwork, and drive home in the new car. Just costs more.

TTDegs · 3rd March 2008, 18:25

indeed pcr

in a lot of cases, that is why dealers charge more, and give you a lower price part-ex than private sale.
You are effectively paying them to deal with the hassle of getting shot of your old car (plus any warrenty they give with it)

pays your money and takes your choice

For me, the money that I could save has always been outweighed by the issue of NOT having to deal with everything that comes with selling private:
sort out an ad;
with a pic;
wait by the phone, wondering if it will ring;
"no, I'm NOT interested in the 500 people you have waiting to buy my car thank you";
arrange to stay in for people who never turn up;
watch them kick the tyres;
decide if you dare ask if they are insured for the test drive;
panic about being driven somewhere and kicked out of the car;
panic if the cheque will clear, or worse, if they will come back in the night for the bundle of £20 notes they gave you;
wonder if the £20 notes are fake!;
spend the next 6 months wonderring if the exhaust has fallen off yet, and what they will do if it has

drive in, sign, drive out - sorted!

(in my book

)

2nd March 2008, 15:29	#1 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 847 Thanks: 0 Thanked 1 Time in 1 Post	Advice required for buying new car. I ask this on behalf of a family member, all replies much appreciated. Planning on buying a cheap new car for around £8500, have an 8-year old 206 (poor condition) to get rid of. Can pay cash but prefer not to. HP appeals more than PCP or lease due to mileage limitations. Am tempted by the discounts offered by these Internet companies, can anyone recommend one of these, what are the pitfalls.

3rd March 2008, 14:49	#17 (permalink)
NH Dan Newton Honda Magic Rear Seat Join Date: 31st January 2008 Location: South London,Uk Posts: 915 Thanks: 19 Thanked 23 Times in 23 Posts	Quoting GJACKSON : Without wishing to sound anal financial advice in the UK is regulated and therefore no one unless qualified can give you firm specific advice on here.Any car salesman (or come to think of it, member of staff) that is involved in offering financial or insurance products and advice HAS to be qualified thru the FSA - Financial Services Authority. If you doubt the qualifications of the member of staff in question, then you only have to ask to see their accreditation. If you doubt any of this or the level of professionalism involved, please feel free to come and see my desk and just how much paperwork is created by each deal that is done, all of which is to ensure that the customer is in the best of knowledge of what they have agreed to purchase and the function of the product that they have purchased. Generally though. It is better to have no loans than a loan and savings.correct The dealer may be able to get a lower apr than you can a loan. However this is because the loan is secured against the car (and they get a commission). Not a negative point then. the loan is secured against the vehicle, enabling you to obtain a lower APR/interest rate and also have the future potential to obtain a personal loan if needs be for other matters. In the same way Mr. Car Salesman says beware of the banks advertising rate also be careful of the dealers headline rate as these are often variable as well depending on the model yes/optional extras no/your deposit (amount borrowed to be precise)/mileage allowance -not usually. ??? Any rate quoted to a customer and subsequently SOLD to a customer is a fixed rate unless specified otherwise. Yes , there may be differeing rates available dependant on what offers are currently in the marketplace but none that I know of on variable rates. Additionally you could be tied to the dealer network for servicing - there are anti competion laws against this for your warranty though these don't apply to PCP and some HP because the car belongs to the finance company not you so they can stipulate who maintains the car.No change there, the anti competition laws remain the same no matter who the owner is of the vehicle. As long as the car is serviced in line with the manufacturers recommended schedule and the recognised tooling and Honda UK parts are used, then you are fine. A cheeky way to do get the dealers finance incentives is to put the biggest deposit down possible and then pay the finance off early, some agreements allow this without penalities if done say within 14 days. Your dealer won't be happy though as they tend to loose their commission for the finance.Not cheeky really, a dealership (or any supplier who obtains commission) will suffer a clawback period at some point. As always, when you choose to pay off your obligations is entirely up to you and your circumstances, if the finance has been sold properly then you shouldnt need to do this. Tongue in cheek comment - If the dealers were competitive they would employ customer service staff and not sales peeps you mean as in order takers?? Last edited by NH Dan; 3rd March 2008 at 14:50. Reason: edit

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads for: Advice required for buying new car.
Thread	Thread Starter	Forum	Replies	Last Post
Suspension Suspension repairs required	SteveP	Wheels, Tyres, Suspension and Brakes	12	11th January 2008 17:23
Recommendation Required Please	DaveMurphy	Cleaning and Styling	4	9th December 2007 01:17
Advice wanted for newbie buying used Civic	AndyS	General Discussion	1	30th January 2007 11:36
Questions Introduction - buying advice needed.	Kop-Alonso	Buying, Dealers and Servicing	12	15th December 2006 11:40
Questions Advice Required	Brodick	Buying, Dealers and Servicing	9	6th December 2006 12:05


This thread is about: Advice required for buying new car., it's in Buying, Dealers and Servicing at the Honda Civic forum Civinfo; I ask this on behalf of a family member, all replies much appreciated. Planning on buying a cheap new car for around £8500, have an ...

2nd March 2008, 15:43	#2 (permalink)
DeanFYoung Supporter Magic Rear Seat Join Date: 19th June 2007 Location: Southampton Posts: 544 Thanks: 8 Thanked 3 Times in 3 Posts	What kind of car are they after? Honda? That money will get you used Lotus Elise S1...

2nd March 2008, 16:09	#3 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 847 Thanks: 0 Thanked 1 Time in 1 Post	Sorry Dean, this is for a very basic runabout, VW Polo type.

2nd March 2008, 16:12	#4 (permalink)
FWH Super Moderator Civinfo master Join Date: 3rd June 2007 Location: Sweden Posts: 5,227 Thanks: 6 Thanked 44 Times in 39 Posts	I quite like the Toyota Aygo for a basic runabout.

2nd March 2008, 16:22	#5 (permalink)
DeanFYoung Supporter Magic Rear Seat Join Date: 19th June 2007 Location: Southampton Posts: 544 Thanks: 8 Thanked 3 Times in 3 Posts	In that case may I suggest a Skoda Fabia or Seat Ibiza - both good value for money, decent kit levels and well built

2nd March 2008, 16:29	#6 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 847 Thanks: 0 Thanked 1 Time in 1 Post	Thanks guys, but what do you think is the best way to buy it ?.

2nd March 2008, 17:23	#7 (permalink)
cb550 Supporter Triangular Exhaust Join Date: 26th May 2007 Location: Nottingham Posts: 385 Thanks: 13 Thanked 2 Times in 1 Post	My Partner's looking for a small hatchback-been on the internet comparing prices etc.Visited a local car 'supermarket' yesterday and they have an '07 fiesta 3 door style for £5995 and Grande Punto's similar spec. same price /year. So far these are the best prices I've found,although new Sirions are on offer at £6995 which have a very good spec.She intends to purchase by cash(bank loan)

2nd March 2008, 18:09	#8 (permalink)
ghowarth Supporter Locking Wheelnut Join Date: 13th February 2008 Location: Aylesbury UK Posts: 132 Thanks: 0 Thanked 1 Time in 1 Post	Hyundai release the rather smart looking i10 soon, and is a good price at around 6k with good spec levels.

2nd March 2008, 18:27	#9 (permalink)
dragonglance Supporter Triangular Exhaust Join Date: 23rd February 2008 Location: UK Posts: 210 Thanks: 0 Thanked 0 Times in 0 Posts	For that kind of money you could get a brand new Citreon C3, (i did not say that name btw guys) it is just a figment of your imagination.

2nd March 2008, 18:37	#10 (permalink)
terry Supporter Triangular Exhaust Join Date: 24th September 2006 Location: Cambridge Posts: 328 Thanks: 0 Thanked 0 Times in 0 Posts	If you have the cash there is little to be gained by going for HP. I'd say the car supermarkets (Trade Sales/Motorpoint/Car Giant etc.) are very good value if you are not after one of the latest models....I have bought 3 nearly new cars over the years and all have been OK, they had the remainder of the manufacturers warranty too. At those places you pay the sticker price, they don't usually haggle as their margins are lower than main dealers. I did save a couple of hundred on one of the cars, the price had been reduced from when I enquired to when I actually went to buy! Terry

2nd March 2008, 18:54	#11 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 847 Thanks: 0 Thanked 1 Time in 1 Post	The reason for considering HP is to maintain some savings for other things while paying only an easily affordable monthly amount. I agree you can get a good deal at car supermarkets. The ones I've been to also have new cars, but I'm never sure if they are "grey imports", if that's the term. Also, I'm guessing that part-ex of an old car is not on at these cut-price outlets. I'm afraid the chose of car is not mine but will pass on your recommendations. Thanks.

2nd March 2008, 21:19	#12 (permalink)
TTDegs Super Moderator Civinfo master Join Date: 4th August 2006 Location: Cardiff Posts: 5,638 Thanks: 0 Thanked 1 Time in 1 Post	no idea how much an 8 yr old 206 is worth, but if they can stand the hassle factor, selling private will generally get you more money by HP / PCP I take it they are looking for some sort of ballon payment thing at the end?

3rd March 2008, 09:15	#13 (permalink)
NH Dan Newton Honda Magic Rear Seat Join Date: 31st January 2008 Location: South London,Uk Posts: 915 Thanks: 19 Thanked 23 Times in 23 Posts	[quote=cb550;152548]My Partner's looking for a small hatchback-been on the internet comparing prices etc.Visited a local car 'supermarket' yesterday and they have an '07 fiesta 3 door style for £5995 and Grande Punto's similar spec. same price /year. So far these are the best prices I've found,although new Sirions are on offer at £6995 which have a very good spec.She intends to purchase by cash(bank loan)[/quote] why?? try considering finance from the car dealer. its ecured against the vehicle and quite often can be at a better rate than the banks. If the dealers weren't competitive then they wouldn't sell finance. Be vary careful with bank adverts of 'APR 5.9%' etc as often this is for much higher amounts than you actually want to borrow.

3rd March 2008, 12:25	#14 (permalink)
gjackson Locking Wheelnut Join Date: 5th February 2008 Location: West Yorks Posts: 111 Thanks: 0 Thanked 2 Times in 2 Posts	Without wishing to sound anal financial advice in the UK is regulated and therefore no one unless qualified can give you firm specific advice on here. Generally though. It is better to have no loans than a loan and savings. The dealer may be able to get a lower apr than you can a loan. However this is because the loan is secured against the car (and they get a commission). In the same way Mr. Car Salesman says beware of the banks advertising rate also be careful of the dealers headline rate as these are often variable as well depending on the model/optional extras/your deposit/mileage allowance. Additionally you could be tied to the dealer network for servicing - there are anti competion laws against this for your warranty though these don't apply to PCP and some HP because the car belongs to the finance company not you so they can stipulate who maintains the car. A cheeky way to do get the dealers finance incentives is to put the biggest deposit down possible and then pay the finance off early, some agreements allow this without penalities if done say within 14 days. Your dealer won't be happy though as they tend to loose their commission for the finance. Tongue in cheek comment - If the dealers were competitive they would employ customer service staff and not sales peeps

3rd March 2008, 13:02	#15 (permalink)
TTDegs Super Moderator Civinfo master Join Date: 4th August 2006 Location: Cardiff Posts: 5,638 Thanks: 0 Thanked 1 Time in 1 Post	at the end of the day - get lots of quotes, and make sure that they include a 'total amount payable' figure, which is the important bit Some, less scruplious, finance companies will include up front 'admin' charges whilst at the same time advertising a low APR. But they all have to (or at least are supposed to!) provide you with a total cost charge, which has to include these 'admin' fees

3rd March 2008, 15:51	#18 (permalink)
TTDegs Super Moderator Civinfo master Join Date: 4th August 2006 Location: Cardiff Posts: 5,638 Thanks: 0 Thanked 1 Time in 1 Post	nicely summed up there

3rd March 2008, 17:39	#19 (permalink)
pcr Magic Rear Seat Join Date: 5th September 2006 Location: Shropshire Posts: 847 Thanks: 0 Thanked 1 Time in 1 Post	Thanks again for the replies, I know a little more about financial loans now. The old car will be sold privately, which will fall on me to prepare it, being the only one with time and spanners in the family. A deposit of £4000 will be paid, the rest by HP. Now just need to get a decent discount. You know, considering the lack of hassle involved, I can see the appeal of driving your old banger to the dealers, half-hour of paperwork, and drive home in the new car. Just costs more.

3rd March 2008, 18:25	#20 (permalink)
TTDegs Super Moderator Civinfo master Join Date: 4th August 2006 Location: Cardiff Posts: 5,638 Thanks: 0 Thanked 1 Time in 1 Post	indeed pcr in a lot of cases, that is why dealers charge more, and give you a lower price part-ex than private sale. You are effectively paying them to deal with the hassle of getting shot of your old car (plus any warrenty they give with it) pays your money and takes your choice For me, the money that I could save has always been outweighed by the issue of NOT having to deal with everything that comes with selling private: sort out an ad; with a pic; wait by the phone, wondering if it will ring; "no, I'm NOT interested in the 500 people you have waiting to buy my car thank you"; arrange to stay in for people who never turn up; watch them kick the tyres; decide if you dare ask if they are insured for the test drive; panic about being driven somewhere and kicked out of the car; panic if the cheque will clear, or worse, if they will come back in the night for the bundle of £20 notes they gave you; wonder if the £20 notes are fake!; spend the next 6 months wonderring if the exhaust has fallen off yet, and what they will do if it has drive in, sign, drive out - sorted! (in my book )