Buying car from garage under finance. What exactly does the deal be with them??

trextra

I would say myself I have just enough to cover a purchase if something ok came along. But given the cut to supply there is not that many options to fit that right now

Q1: Will buying under finance effect my insurance cost, (it effectively being hire purchase)

Q2: Lending critera, is it strict?? (yeah everywhere differs but generally speaking)

Following on from Q2. The garage/car I'm looking at currently has deal down at say between €40-€60 a week depending on the slight variation in choice of car I go for. Also in their words, they say they will deal with people who have bad credit history which should leave them looking favourable on me

Q's 3 so few here: Like the thread title, what is the breakdown of a deal in the above situation, 40-60 with interest?? How high the interest? Lump sum payments? Befire end of term payments?

bazz26

It's impossible for anyone here to answer your questions because we don't know how much the car is that is costing €40 to €60 a week to acquire. We don't know at what interest rate you are being charged or over what the term of repayment is. But at a guess if it's being offered to a high risk borrower who has a history of bad credit or defaulting then you can be sure the interest rate will reflect that. All these questions can only be answered by the dealer offering the finance though otherwise €40-€60 a week has no relevance.

mickdw

Get the price of the car from dealer.

Get the terms of the deal. How much per month and how many months you will be paying and also what deposit is required.

That will give you the overall cost of the car to you including interest.

I wouldn't consider PCP finance on anything other than new car with very low interest.

trextra

They don't ask for much information. That's the point

It will be practically point of sale by the time I know any of this

Hell I don't know if the garage are even the people thats providing the finance.

mickdw

https://www.boards.ie/discussion/comment/118803164#Comment_118803164

You ask.

They won't tell you f all specially if it's a **** deal.

Ask for the full terms.

It sounds like you are possibly dealing with one of these dealers who offer a few of their own cars on some form of lease on the worst of terms to people who cannot get finance anywhere.

Walk away if that is the case and it's not a proper finance deal where you pay monthly with known terms and own the car after the term.

trextra

Precisely, more I know about these and their methods prior to dealing with them the better

If it can be paid it can be paid. My concerns were just the other bits they sting or may sting me with

I'm effectively assured of a loan through my credit union for same so this isn't a credit worthiness issue

trextra

Basically no way I'm going high interest or surcharge punishments.

These guys have to make their money some way too

mickdw

Well ok.

How much do you plan to spend on a car?

Genuine dealer finance will likely beat the credit union as from what I can see they are very expensive and also lock down some of your own funds too.

mickdw

And what type of car are you interested in?

trextra

Yeah the credit union thing is only a back burner thing to have. Rainy day fund

If this was pre brexit and covid (sigh yeah lol) I would probably have said to myself 3 to 4 grand. Purely my own money

That figure hasn't changed but the choice and price available has, so finance will open it up a bit for me

Simple car, not an old one but nothing new either. Low engine size 1.4-1.6, something to get few years out of

Never planning on breaking the bank basically, but with current times like you say it is better to have something of my own locked away if possible

mickdw

If you are talking 50 quid per week - that's about 215 per month.

Now financing something over 3 years at that figure will only amount to a 7k car or so plus whatever you put in via deposit.

Now I don't know your situation. If you are tight for funds ignore this but if you just consider a cheap car because that's what you always did, you could for example get a new Skoda Fabia for 3k deposit and 275 per month on PCP so look at all the options and don't think you have to deal with the bottom of the barrel dealers who won't clearly define the deal for you.

trextra

Yeah something like that would honestly have been my initial idea

I'm surprised there's anything available along those lines especially at them prices, which would be my budget. But fair enough. I haven't looking anywhere apart from local dealers TBH.

Definitely buying off proper dealer anyway. No done deal or any that stuff. Something's wrong with the car I want someone to go back to and you make reference to that so that's fair enough

kirving

The type of dealer offering you shady finance, advertising "weekly" payments and in the bracket of €5-10k cars - you will get little to no aftersales service. It's a total false sense of security that you're paying a premium for.

You would honestly be better off buying private, and putting a few hundred toward a mechanic check or two, and saving the difference in price.

(The issue I have with weekly, is that people who earn less often tend to be paid weekly. Dealers know that these offers target weekly earners, which would be fine if it were ultimately transparent, but as you've seen, they're not. Many people assume that €50pw is €200pm is €2400py. It's actually €216pm and €2600py. IMO it's a shady way to get an extra 8%.)

mickdw is right too. Look at all your options. Buying a car with finance of €7k, will cost you about €220pm for 3 years, and €920 on interest. https://www.ccpc.ie/consumers/money-tools/loan-comparison/

Right now, that €7k care could be 2-3k overpriced, which will be corrected for in 3 years, so it will probably cost you about

• €5k Depreciation,
• €920 Interest,
• €300 Servicing,
• Maybe on €400 tyres (unlikely to need this on a new car)
• Plus anything else that need to be done. (eg: brake fluid, tracking, NCT, €500)

Approx €7k for 3 years.

Excluding €4k deposit, all of the above is included on a PCP Skoda Fabia for €234pm, x36 months = €8,424.

Total cost to run the new Fabia for 3 years €8,424 + €3,980 deposit: €12,404

https://www.skoda.ie/finance-offers/promotion-detail/finance-scala-offer

You will very likely have tax, insurance or fuel savings with a new car, but even ignoring those the new car is less than €400 per year more expensive on a weekly basis only.

Now there are three big caveats to that:

1. Long term financial commitment
2. You don't own the car after 3 years (but you would otherwise own a car, albeit worth €2-3k)

Just worth doing the sums is all, and assessing what the total cost to run is over 3 years.

Toyotafanboi

That's an excellent post above, something i was looking at myself recently.

I am nearly a year into a 4 year HP deal on my Octavia, probably have a bit of equity in it.

Between getting the house finished and getting the wedding paid for, i said to myself am i mad driving the Octavia, do i really need it, it's just a big ish payment per month for a fairly ordinary car.

Doing the maths on taking out a smaller personal loan to buy an older car and being realistic in the needs of the older car (higher insurance, road tax, fuel economy, greater likelyhood of breakdowns etc) it was only working our very very marginally cheaper than sticking with the current car when you work out the price per month of the total cost of ownership.

When you factor in what the small bit extra gets you, in terms of a new(er) car, the likelyhood of better reliability, predictable maintenance, warranty, mod cons in safety and tech, it's a no brainer to keep yourself in a better car and even by the time it's fully paid for, please God it'll still be worth a few bob as an asset at that point.

mickdw

I went with 3k deposit on my figures and you would likely get that back in equity at end of term so basically 275 or so per month to drive a new car for 3 years.