How to finance a used car, different options?

drunkmonkey

Would there be any way to bring down the payments on a €28,000 car loan with a balloon payment or anything similar, do garages still do them, can they be got on a 2010 car?

Here's the scenario, I'd like to change the car, the sticker price of the 2010 car is €28,000. I have a trade in with a minimum value of €10,000. That would leave the amount to be financed at €18,000 which would mean repayments of €375pm over 5 years.
Ideally I'd like to pay back no more than €200pm, is there any way I could structure the finance to achieve this?

Edit:
The car is in a main dealers and I'm trading in the same brand.

bazz26

Have you spoken to your bank/lending institution? These days it maybe unlikely that they will give you a 5 year term on a car that is already 3 years old. The reason is that from their stand point if the loan goes bad then they are left trying to sell on a older car that probably has a market value less than what was left owing on it. As you probably know banks are very tight with lending money these days and when they do their lending criteria is very high.

68Murph68

I really cant see a finance company willing to accept anything like €200 pm to finance this.

Finance a three year old €18,000 car at €200 pm.:eek:

Even without any interest component it would take you seven and a half years to repay the capital. (90 months by 200 per month)

When you consider the interest component its not even remotely plausible.

drunkmonkey wrote: »

Here's the scenario, I'd like to change the car, the sticker price of the 2010 car is €28,000. I have a trade in with a minimum value of €10,000. That would leave the amount to be financed at €18,000 which would mean repayments of €375pm over 5 years.
Ideally I'd like to pay back no more than €200pm, is there any way I could structure the finance to achieve this?

Also I doubt your figure of €375 pm is correct.

375 by 12 by 5 is €22,500 to finance a loan of €18000 over five years on a three year old car doesnt add up.

mickdw

I heard that audi are bringing in balloon type finance on used stock so that might be something to look at. That said you would be kinda selling your soul to the devil as you currently have 10k value built up in your car whereas with a deal like you are looking for, you will end up with close to zero value built up in the car making it impossible to get into something anywhere near as expensive in future.
400 per month or so is a realistic figure to be paying on the deal. Reducing it is just putting off paying til later.
Of course if your financial situation suits low payments for a few years, it might be ideal.

ted1

With the risk of sounding harsh,you can't afford it.

drunkmonkey

mickdw wrote: »

I heard that audi are bringing in balloon type finance on used stock.
400 per month or so is a realistic figure to be paying on the deal. Reducing it is just putting off paying til later.
Of course if your financial situation suits low payments for a few years, it might be ideal.

It's something like what Audi are thinking of I'm after but just not an Audi : (

I could afford the the 400pm but then ill be paying a redicolous amount of money a month to run the car, I'm currently spending just under 500pm on diesel so 400 pm on a car repayment isn't appealing to me, hence I was thinking of some kind of balloon payment which I don't really have a problem with. I wouldn't expect the loan to go full term I'm just firing money out in all directions at the moment so the oh would fall over if I come home with a new car and end up 400 lighter a month.

I've never financed a car, I usually just apply for a personal loan and go off and buy whatever I want.

I suppose realistically I could borrow 10 and sell my own but it won't get me into the car I want as there is hardly any for sale in a 08/09 and I don't want the tax that comes with the 07 and below.

ironclaw

A €28k 2010 car in 5 years will be practically worthless thanks to depreciation. You'll never get back the €10k of 'built up' value in your current car and the €18k you'll pay back, you won't see that either. Say you eventually sold the car for €10k in 5 years, you stand to lose €18k. Your renting a car for 5 years basically. And that doesn't account for inflation, petrol, tax, insurance or repayment interest etc etc.

Your literally going to be burning money in a huge pile. You would be far better off financing a new car.

drunkmonkey

A new one is about 60k so that's not really an option. Suppose I just have to wait another year or two until they fall in value a bit more, if its lost 30k in value the last 3 years its bound to loose another good chunk over the next 2.

Bpmull

I always thought the longest car finance you could get is 5 years and obviously your monthly repayments will be more than 200 euro for 5 years. Unless you could get a personal loan on the car.

drunkmonkey

200 a month for 5 years only gets you about 10k

OldmanMondeo

Most places will only do 5 years on new cars. Herself works in a bank and we have been looking around recently.

DylanII

What the guy want to do is add his own money along with the trade in to make the upfront payment more and the amount he needs to borrow less.

I dont think he is looking for a longer term, he just wants to pay more upfront. (I think).

I cant see why that would be a problem.

68Murph68

drunkmonkey wrote: »

I've never financed a car, I usually just apply for a personal loan and go off and buy whatever I want.

I've always been of the opinion that you should never borrow to buy a car.

If you constantly borrow/finance to buy cars over the course of your life you end up paying a huge amount of interest.

Its pure short term live on credit thinking.

ThreeLineWhip

Ah the Crippling Balloon Payment at the end, I thought those had been outlawed?

st1979

DylanII wrote: »

What the guy want to do is add his own money along with the trade in to make the upfront payment more and the amount he needs to borrow less.

I dont think he is looking for a longer term, he just wants to pay more upfront. (I think).

I cant see why that would be a problem.

No he wants a balloon payment. Which is where u pay less during the term and are left with a large payment owed at the end. Which is ment to be covered by the trade in value.

drunkmonkey

st1979 wrote: »

No he wants a balloon payment. Which is where u pay less during the term and are left with a large payment owed at the end. Which is ment to be covered by the trade in value.

10k trade in
10k finance
And 8k or less balloon depending on final sale price.

I'd expect the car to be worth 6-8k after 5 years. If its worth lets say 5k I expect to stump up the difference. If its worth 8k then I'm even. I'd also not like a penalty for paying off the balloon payment value early either.

Something like that would suit me.

Farmer Pudsey

In a nut shell it looks like you cannot afford the car. Even looking at the figures you are spending 500/month on diesel are you commuting long distances or is it liftstyle. It sounds like the car you want to purchasse is a 3 year old prestige car do you need it. What kind of fuel figures is your present doing will this new car disimprove the MPG.

Five years is a long time to take out a car loan on even on a new one. Have you taught about maintenance costs. Will it cost more to insure. A balloon payment might seem like a good idea now but what if anything happens to the car.

TBH it sounds like you wan to dig a hole for yourself.

drunkmonkey

Digging a hole would be buying a new one. MPG, running cost and insurance would all be around the same. Nearly identical, the new car would have cheaper tax.
I'd expect to have the 10k finance cleared in the next 12/24mts I'm just trying to keep the repayments as low as possible in case anything un-expected cropped up.

I don't see why it's not something that's offered, the above scenario I'm putting up 70% of the cost to the main dealer straight away.
I can see why Audi as Mick mentioned above is rolling out something like this. Held buyers get into a quality car and helps garages shift 10,11,12 regs quickly.

mickdw

Just to add, there is nobody going to five a balloon payment of more than the value of the car at the end of five years as you seemed to imply in one of your posts.

What are you looking at, 5 series?

As you seem to be doing big miles, the balloon is a complete non runner really. As the balloon deals give an option to return the car at end of term, the high useage is going to go against that.

djimi

68Murph68 wrote: »

I've always been of the opinion that you should never borrow to buy a car.

If you constantly borrow/finance to buy cars over the course of your life you end up paying a huge amount of interest.

Its pure short term live on credit thinking.

And in the real world where most of us dont have several thousand just lying around unused in bank accounts there is little option but to borrow/finance to get a decent car.

drunkmonkey

mickdw wrote: »

Just to add, there is nobody going to five a balloon payment of more than the value of the car at the end of five years as you seemed to imply in one of your posts.

What are you looking at, 5 series?

As you seem to be doing big miles, the balloon is a complete non runner really. As the balloon deals give an option to return the car at end of term, the high useage is going to go against that.

That's what I was thinking, probably looking for a bit much to defer the 8k (guess I better save a little first:( ). Car probably wouldn't be worth a whole lot if I was trying to hand it back with 300k + on it.

I was thinking of a 10 335d.

Farmer Pudsey

djimi wrote: »

And in the real world where most of us dont have several thousand just lying around unused in bank accounts there is little option but to borrow/finance to get a decent car.

drunkmonkey wrote: »

That's what I was thinking, probably looking for a bit much to defer the 8k (guess I better save a little first:( ). Car probably wouldn't be worth a whole lot if I was trying to hand it back with 300k + on it.

I was thinking of a 10 335d.

If you cannot afford it do without it is as simple as that. This is the stupidity that happened during the boom. People went buying on credit things that they could not afford. at the end of the day a car has four wheels and gets you from A-B.

With the price of fuel/running costs have seen a few people get caught latly. People having to drop thousands to get rid of 4WD's and another caught with a petrol people carrier. Cars are an expensive buisness and you do not want to be working just to own a prestige one.

I like to drive around in somthing like this however I do not think that I can afford it so I will not buy it

http://www.carzone.ie/search/Mercedes-Benz/S-Class/320-CDI-/28713433123408280/advert?channel=CARS&featuredListingClickThru=true

djimi

Farmer Pudsey wrote: »

If you cannot afford it do without it is as simple as that. This is the stupidity that happened during the boom. People went buying on credit things that they could not afford. at the end of the day a car has four wheels and gets you from A-B.

With the price of fuel/running costs have seen a few people get caught latly. People having to drop thousands to get rid of 4WD's and another caught with a petrol people carrier. Cars are an expensive buisness and you do not want to be working just to own a prestige one.

I like to drive around in somthing like this however I do not think that I can afford it so I will not buy it

http://www.carzone.ie/search/Mercedes-Benz/S-Class/320-CDI-/28713433123408280/advert?channel=CARS&featuredListingClickThru=true

Why did you quote me on that? The vast majority of motorists drive vehicles that they have on some sort of credit; be it finance or a bank/credit union loan. Nothing wrong with that; its perfectly affordable, just means that people do not have a massive lump sum to spend all in one go on a car.

mickdw

There is nothing wrong with car finance and nothing wrong with investigating how to get the lowest payment possible. The fact that you cannot afford an s class merc is neither here nor their.

drunkmonkey

Farmer Pudsey wrote: »

If you cannot afford it do without it is as simple as that. This is the stupidity that happened during the boom. People went buying on credit things that they could not afford. at the end of the day a car has four wheels and gets you from A-B.

We'd all be living in huts if we only bought the things we can afford today. A lot of people finance their car in some way shape or forum.
I clock up a good few miles, I want something nice under my butt with a bit of comfort and poke, I don't mind paying a bit extra for it. It's more than something to just get me from A to B.

Farmer Pudsey

drunkmonkey wrote: »

We'd all be living in huts if we only bought the things we can afford today. A lot of people finance their car in some way shape or forum.
I clock up a good few miles, I want something nice under my butt with a bit of comfort and poke, I don't mind paying a bit extra for it. It's more than something to just get me from A to B.

I have no issue with people borrowing what I have an issue with is borrowing or buying something they cannot afford. Balloon payments are usually set uo so that they are a good bit less than the projected value of the car. The reason being that the banks/lending intutitions want a comfort factor.

There are a lot of people living in hut because they borrowed or bought what they could not afford. And yes a lot of people finance there car in some shape or form. However this should not be used as an excuse to over borrow. If you clock up a fair few miles you should be clued into economy. I do myself in the last 12 months between work, leisure and buisness I clocked up between 60-70Kilometres however I am f##ked if I would put a noose around my neck for something with a bit of poke

galwaytt

drunkmonkey wrote: »

That's what I was thinking, probably looking for a bit much to defer the 8k (guess I better save a little first:( ). Car probably wouldn't be worth a whole lot if I was trying to hand it back with 300k + on it.

I was thinking of a 10 335d.

According to my local CU online calculator, €200 p.m. would get you approx 10k over 5 years.

I admire your aspiration, but I just don't think what you're looking for is do-able. I mean, why would any garage or manufacturer carry an 8k balloon for what is going to be an 8yr old car ? What would be in it for them ? I mean, look around at 8 yr old stock now - cars go downhill very quickly.....condition-wise after the first couple.......

And, if you could find someone to do it, I'd be saving to clear it simultaneously with the loan repayment: that way, and payment #60, you'd clear the balloon from cash, as well.

So, which is cheaper: Option A - borrowing 18k on Day 1, for 60 months, or....Option B - borrowing 10k and saving 8k........for 60 months.

Option A - would cost you € 352 per month, or €21,131 total, inc interest.

Option B - would cost you €196 per month in loan repayments and € 133 per month in savings, monthly total of €329, giving €19,739 total, inc interest.

A difference then, of €23 per month, or € 1,392 over the 60 months.

Option B is certainly cheaper, but requires much greater discipline. Fall off the wagon and in yr 5 you'll be re-borrowing 8k just to keep your car.

Now, all this is predicated upon 6.5% Credit Union finance, which works out cheap. If you could access a cheaper rate via mfr for the 28k, tbh, it would make the gap even smaller....

Food for thought, certainly.

Which brings us to Option C: The Hybrid Loan

Borrow €18k from your CU at €352 per month.

Then, make a determined effort to pay down an extra 8k off that by payment 36 ??, and so from payment 37 onwards you'll be on your goal of €200. You' will then have no balloon, and you could trade out of the car at market value with possibility no liability. Think of it this way: you're putting the balloon at the front, not the end of, the loan.

drunkmonkey

galwaytt wrote: »

I mean, why would any garage or manufacturer carry an 8k balloon for what is going to be an 8yr old car ? What would be in it for them ?

8k?

Wicklowandy

If your spending €500 a month on diesel, you must be doing the guts of 3000 miles a month. Is it commuting?

Why not buy a commuter diesel and a lovely toy (boxter, s2000, or a lovely modern classic e30 m3 whatever you fancy.

At the end of 2-3 years throw away your commuter and get another, your toy will always have a bit of value if bought wisely.

I dont believe that a 335d is going to be a cheap item to run to intergalactic mileage.

Spend 10k on your toy and 5k on your commuter, borrow 5k over 2 years, pay back €250 a month.
If your circumstances ever changed (new house, emigration) your never going to be in a hole you cant get out of.

The biggest cost of car ownership will always be depreciation if your buying a car like that. Why not let someone else take the sting?

fasttalkerchat

If it was a new car you could go down the rental with an option to buy after 5 years. No sure if they will offer that on a new car but you could ask.

drunkmonkey

Wicklowandy wrote: »

Spend 10k on your toy and 5k on your commuter, borrow 5k over 2 years, pay back €250 a month.

So I should get rid of my toy to buy a ****box and another toy, sweet jesus

68Murph68

drunkmonkey wrote: »

MPG, running cost and insurance would all be around the same. Nearly identical, the new car would have cheaper tax.

How much would you save in terms of taxation?

Compared to the cost of this proposed deal I'd imagine the savings would be close enough to being negligible.

drunkmonkey wrote: »

I don't see why it's not something that's offered, the above scenario I'm putting up 70% of the cost to the main dealer straight away.

You arent putting up 70% of the cost to the main dealer straight away.

You are putting up a car valued at €10k to buy a car valued at €28k

You are borrowing €18k which is close to 70%

If we look at this deal.

You want to borrow €18k and want to repay 200 per month for five years.

That will mean in 5 years time you will have made repayments of €12k.

However that doesnt mean you will owe €6k.

Chances are you will still probably owe close enough to €10k-€12k with interest rates.

Say the car is worth €6k at this point.

That would still leave you a balloon payment of €4k-€6k

So basically this deal would take you from a position were you currently have an asset of €10k to a position in five years time where you would have a debt of €4k-€6k and no asset after having paid €200 per month to get to that position.

It's madness.

Wicklowandy

drunkmonkey wrote: »

So I should get rid of my toy to buy a ****box and another toy, sweet jesus

Nah, head on and buy something you patently (to everyone except you) cant afford

choons

Wicklowandy wrote: »

If your spending €500 a month on diesel, you must be doing the guts of 3000 miles a month. Is it commuting?

Why not buy a commuter diesel and a lovely toy (boxter, s2000, or a lovely modern classic e30 m3 whatever you fancy.

At the end of 2-3 years throw away your commuter and get another, your toy will always have a bit of value if bought wisely.

I dont believe that a 335d is going to be a cheap item to run to intergalactic mileage.

Spend 10k on your toy and 5k on your commuter, borrow 5k over 2 years, pay back €250 a month.
If your circumstances ever changed (new house, emigration) your never going to be in a hole you cant get out of.

The biggest cost of car ownership will always be depreciation if your buying a car like that. Why not let someone else take the sting?

I think that's a great idea!

drunkmonkey wrote: »

So I should get rid of my toy to buy a ****box and another toy, sweet jesus

You still haven't said what you currently drive . . .

Wicklowandy

And 5k buys a good diesel car, youre not doing regular driving, and id be surprised at any 'toy' that will do equivalent mpg to the 335d

drunkmonkey

Wicklowandy wrote: »

And 5k buys a good diesel car, youre not doing regular driving, and id be surprised at any 'toy' that will do equivalent mpg to the 335d

Your going to get nothing decent that's able for long hard driving across the country for 5k.
They do make toys in diesel these days you know.

copacetic

drunkmonkey wrote: »

So I should get rid of my toy to buy a ****box and another toy, sweet jesus

If desperate to change your only real option for the monthly payment you want is to buy new and have a car still worth a fair bit in 3 years. It's the only way finances work out.

Eg the deal on a4 2.0tdi SE in all the papers at the moment. 0.9% over 3 years with about 10k down gives you €299 a month and handing the car back with GMFV of 17k.

However that probably only gives you 5k in equity at the end and the car isn't a 335d by any means.

However interest is less that 1k over three years so it's a good deal as these go.

Wicklowandy

drunkmonkey wrote: »

Your going to get nothing decent that's able for long hard driving across the country for 5k.
They do make toys in diesel these days you know.

We'll agree to differ on what you can buy for 5k and the problems with having diesel and toy in the same sentence.

Good luck with your life of penury:)

Wicklowandy

I suggest a boxter or m3, and he says a diesel toy...ha

drunkmonkey

Yea that's a good deal I could easily afford, but I wouldn't have any interest in that type of Audi. I'd rather buy a car a few years older but with a lot higher specification.

Wicklowandy

http://cars.donedeal.ie/for-sale/cars/3797802

http://cars.donedeal.ie/for-sale/cars/4316697

drunkmonkey

Wicklowandy wrote: »

I suggest a boxter or m3, and he says a diesel toy...ha

You may have you missed it but this thread is about getting a diesel toy for as cheap as possible per month.

Wicklowandy

No the thread didnt mention cars for quite a while, if you can remember. You were looking for someone to tell you that you were having a great idea.

You still havent said what youre diesel 'toy' is

drunkmonkey

Wicklowandy wrote: »

http://cars.donedeal.ie/for-sale/cars/3797802

http://cars.donedeal.ie/for-sale/cars/4316697

So your saying buy both those, you do know i'd be paying out about 3k alone in motor tax.
I don't need a toy for the weekend i've got my bikes. I want a comfortable quality mile muncher with plenty for get up and go and a bit of class. The 335 isn't out of reach I was just seeing was there any way I could have low payment for the next 12/24mts.

Wicklowandy

Spend your money on depreciation if you like, i accept what you say about tax, but it'll still work out at approx 40% of what your going to spend on depreciation and the boxster will be worth money because it would be little used. They were just the first cars i pulled off dd.

Its the first time you mentioned your bike, maybe try more information in future rather than attacking someone making suggestions to you.

The 335 is out of your reach for the payment you want to spend. You still havent said what your diesel 'toy'is

drunkmonkey

Wicklowandy wrote: »

The 335 is out of your reach for the payment you want to spend. You still havent said what your diesel 'toy'is

Yes I know that, it's why I asked the question in the first place. If it was within my ideal budget i'd already own it.
I'm not saying what my toy is after the thread in AH(for the record it's not a mini though)

Wicklowandy

*searches furiously*:D

mickdw

What about something like this.


http://www.driving.ie/used-cars/BMW/3-Series/330D-SE/713234185756720/

The cost is about 3.5k along with your own car so easily purchased at 150 per month over 2 years.
Its not a 335d but its not slow either.
The tax will be about 1k more than a newer version so that is nearly 100 / month extra there.
The big plus is that when its worth little in a few years with all your mileage on it, you wont be loosing as much due to the cheaper original purchase price.

Alternatively:
http://www.driving.ie/used-cars/BMW/7-Series/730-D/201247211120542/

Similar argument, at least you will not be owing money on them when you want rid. They should be worth a few thousand anyway in 3 or 4 years

Wicklowandy

Ive seen that first one and it looks lovely in the flesh

drunkmonkey

It's the tax that's turning me off anything below 08 in the 330/335 bracket.

Something like this is what i've drifted on to, http://www.autotrader.co.uk/classified/advert/201301124894063/sort/default/usedcars/maximum-age/up_to_5_years_old/body-type/convertible/fuel-type/diesel/model/3_series/make/bmw/onesearchad/used/onesearchad/nearlynew/onesearchad/new/radius/1500/postcode/bt11lt/page/1?logcode=p it's within my 199 pm budget and it probably still worth a few quid in 5 years, with the VRT it makes it about 22k

Wicklowandy

10k buys a lot of road tax