A different type of finance option (but not in Ireland?)

paul7g

Hi,

I notice that a significant amount of Car Vloggers / YouTubers finance their cars with a Darren Gibson in the UK, who provides quite an attractive option, which consists of:

- Small deposit upfront
- Small monthly payments
- Large balloon at end of term

https://dg18son.com/types-of-finance-explained/

I understand there is a negative stigma attached to the idea of financing an expensive car, but I personally think it's a much better thing to do, regardless of how much money you have. The safety of money in the bank for a small increase in cost to make use of the bank's money out weights a large outlay of cash into an every depreciating asset, in a dangerous climate... each to their own :-)

Does anyone know if there are financial firms that provide similar finance in Ireland? I know that main dealers will provide similar PCP options, but I'm looking for something similar to the above, that doesn't have to be with a main dealer.

Thanks for your help.

colm_mcm

That’s a ridiculous business model. Car is rapidly depreciating.

paul7g

Business Model?

Are you referring to the finance company's business model? It's actually quite a smart model, and the underlying finance company are doing extremely well from it.

In a nutshell, the customer is paying for the depreciation + interest, spread over monthly payments, however if the customer chooses the right car, the depreciation will be minimum over a 12 month period. It's aimed at those who change their car regularly. The finance firm take several factors into consideration, starting with the exact car you are buying, as they do their homework on the condition, deprecation, etc. A normal lending institute normally only take the Make and Model into account, and on 'normal' cars that depreciate extremely fast, in comparison to rarer or limited production cars.

It's not for those looking to buy a brand new 'normal' car. There are plenty of cars and supercars that hold their value over time, which makes this a very good financial product / business.

carsfan2

Unlike the U.K. there is no real market here for super cars or even higher end stuff like Porsche, Audi R8 etc
Blame VRT probably.
We think a BMW 5 series is high end!
This makes it very hard to predict residual values and you could be trying to sell a car for a long time here.
It is because of this I can’t see any lender taking a punt on a pcp for a super car here.

paul7g

carsfan2 wrote: »

Unlike the U.K. there is no real market here for super cars or even higher end stuff like Porsche, Audi R8 etc
Blame VRT probably.
We think a BMW 5 series is high end!
This makes it very hard to predict residual values and you could be trying to sell a car for a long time here.
It is because of this I can’t see any lender taking a punt on a pcp for a super car here.

Yeah, very good point.

bazz26

I'm sure if someone thought they could make money from a business model like that here then they would have already being at it. Ireland is just too small a country to justify enough demand for high end stuff to work financially. Owning even the most modest unusual car here is expensive compared to a lot of other countries including the UK. I don't see manufacturers or their financial houses queuing up to bankroll such a venture here either which speaks a lot.

Water2626262

There is no option to return the vehicle. Seems very high risk. They’d want to be sure the customer can afford to pay the residual somehow. Which in reality means you’d have to be rich enough to afford financing it via a traditional method.

I’d also imagine that it takes an age to shift a high end performance car in Ireland without slashing the price. Market is too small here. So whoes paying internet while it’s up for sale?

darragh o meara

Is that the same chap Shmee150 Finances his cars through?? Now theres a chap who must have some serious monthly repayments...