How did you finance your new Tesla?

Killer K

Sound, thanks again Jog501. Annoying they don't give that option online. Will email them.

Jog501

There's a 6 year HP option too @4.95% if you want to keep your capital commitment low and utilise it elsewhere.

mickdw

People should consider also that like for like interest rates on HP and PCP will work out more expensive on pcp as a big lump of the borrowed money is being slung out to the end of the term before being repaid

Pcp really needs super low interest to be attractive.

Zurbaran

I did pcp with them. Would have preferred a lower rate but meh.

Im not sure why they don’t have the pcp on the website, it’s been available for a good while now.

Jog501

https://www.boards.ie/discussion/comment/119843115#Comment_119843115

Simply not true. You pay the interest on the amount you borrow, not the total price of the car. You can pay off the ballon, hand the car back, sell it yourself or trade it in for a newer model at the end of the term. You can pay the balloon off at the end with your own cash so total interest paid is a lot less than HP or refinance a portion of it, again in this case you've paid less interest than with HP as long your refinance rate isn't much worse than the HP rate offered. PCP also gives you guaranteed protection against depreciation.

3DataModem

https://www.boards.ie/discussion/comment/119843154#Comment_119843154

I think the point he's making is that for a given interest rate, you will pay more euros in interest for PCP than you will on HP, because you are paying the HP balance off a lot faster. This is objectively true.

celtic_oz

https://www.youtube.com/watch?v=m3n-W6x96J4

explained well here

ELM327

https://www.boards.ie/discussion/comment/119843154#Comment_119843154

Plus the Tesla financed PCP has a very very conservative GFMV meaning that you will in all likelihood have a positive equity built up to trade in in 3 years. They even support this in Finance Ireland as they have a different process for trading in and taking a new PCP/HP with finance ireland

oinkely

Would love one, but don't have the cash for one and don't take loans for cars. So leaf it is for the foreseeable. I'll be happy with a lift in my friends one, which is probably financed through a loan of some sort.

MojoMaker

Step into the 1990s while you're at it and throw away that auld post office book 😀

oinkely

https://www.boards.ie/discussion/comment/119848533#Comment_119848533

Funny, was just discussing this with someone in work, and they laughed at the idea of not buying things with money you don't have. They couldn't believe that I had never had a car loan. I guess I've been lucky enough to be able to afford an average (or maybe below average) car from my own money without too much difficulty and having a fancier one wasn't high enough of a priority to pay the interest on a loan to get a better one. Not sure where I got this from but I've never done it (apart from the house) and might be in the minority but just think it's not for me.

And my last engagement with the post office was many many years ago.

I guess the economy needs people to keep borrowing to buy shiny new things but I'd rather not have any additional financial yokes around my neck. The mortgage is enough of a burden ;-) I figure if I can't afford it then a loan / finance etc is just making it seem more affordable but in reality it's still out of my financial league. So I'll do without.

Anyway, dragging this way OT, sorry OP.

Each to their own, and if finance makes sense to you to get your butt into a fancy leather fart on demand seat with almost autonomous driving and ludicrous acceleration for a standard production car then go for it. I genuinely hope it brings you great joy.

Anyway, back to the 80s with me and my finance free cars.

mickdw

https://www.boards.ie/discussion/comment/119843154#Comment_119843154

It is completely true.

You pay interest on the amount you borrow. The amount you borrow includes the large balloon amount which has been financed day one to actually pay the manufacturer for the car and then just offset to the end of the loan.

Alot of people think the balloon is not borrowed at all but it absolutely is.

All the options you mention are available but in each case, it involves paying off the outstanding borrowed money whether by paying out cash or simply giving back the car to cover the outstanding borrowings.

I am 100 percent correct stating that any given rate like for like hp v PCP will result in more interest being paid on a PCP.

Do the figures!

Zero percent PCP works very well for vw for example as offsetting a big lump of the cost towards end of term in that case doesn't cost anything in interest.

Your post reminds me of an Audi salesman who produced a crap PCP deal to me and when I got back to him stating it added up to a mental rate of about 11 percent, he said, sir, the figures are quite complex and you wouldn't be able to calculate the interest without our dealer calculator. I got an apology an hour later for the error in the figures.

Jog501

https://www.boards.ie/discussion/comment/119850795#Comment_119850795

To reiterate, you only pay interest on the borrowed amount not the total amount. Handing back the car, trading it in or paying cash to pay the balloon incur no interest cost.

If you save and invest the difference between the monthly repayments (HP vs PCP) you could effectively have a good potion of the balloon ready to go anyway at the end of the term while also having the safety net of that cash during that term. The interest savings are stark if you do anything but borrow the whole amount of the balloon which someone on PCP would rarely ever do anyway and would be a terrible decision. All that said, as someone mentioned above the best option for anyone would be to put their money to work and not throw it on a depreciating asset like a car!

mickdw

https://www.boards.ie/discussion/comment/119851073#Comment_119851073

Are you trying to say you don't pay interest on the balloon amount over the initial 3 year period?

Rusky rusky

https://www.boards.ie/discussion/comment/119851375#Comment_119851375

People don’t understand that you borrow the full price of the car less the “deposit”. The interest is calculated upfront on the full borrowed sum and hidden in the monthly payment. Monthly payment only covers smth like 40% of the borrow sum (max 30% deposit, min 30% balloon. ID plan for ID.3s had GMFV of 50% = no equity in the car free 3 years). Ballon payment generates a fair bit of interest as it’s borrowed for all 3 years. How the car dealers calculate the PCP interest I don’t know as I was never really been able to match it using online calculators. People just look at the monthly sum and overlook the total interest charged. On PCP it could be eye an watering sum and could be bigger than an HP on a much higher interest rate.

mickdw

I've my own excel calculator than matches the various manufacturer figures by simply calculating the interest once monthly, add it to outstanding, reduce by monthly payment and repeat 36 times.

Starting with full price less deposit and ending after 36 payments with an amount equal to the gfv remaining.

It's simple straight loan with a bulk of it unpaid until month 36.

rx8

That sounds way too complicated.... I think I'll just pay cash 💲 💵.

unkel

@oinkely - you are not alone. I would never take out a loan / finance for a car. This has meant for considerable periods in my life that I was driving bangers. In more recent times, things have looked up and some of my cars have been more valuable. Including the new Tesla I ordered last month. But I still drive around in my second car sometimes too, which is an old 90s clapped out BMW with over 400k km on it

rodneytrotter15

Can the car be paid for early or is it all due in one lump sum just prior to collection ?

Mad_maxx

im buying with cash , took money out of post office as earning 1% , useless in inflationary times

mumo3

https://www.boards.ie/discussion/comment/119849685#Comment_119849685

I'm the same, I'm in the it might not be brand new, but its new to me category. My car gets me from A to B and I'm more than happy with that.

But I'm surprised PCP is still a thing, I remember a while ago there was talk of getting rid of it.

Mad_maxx

https://www.boards.ie/discussion/comment/119852249#Comment_119852249

Depends on the finance rate , under 3% and buying in cash a waste IMO

unkel

https://www.boards.ie/discussion/comment/119852991#Comment_119852991

LOL, why is that? You still pay 3% interest. That's thousands of euro over the life of the loan. I'd rather keep that and invest it in something that will give me a decent return. Like solar PV systems.

Mad_maxx

https://www.boards.ie/discussion/comment/119853114#Comment_119853114

Because not everyone can be sure that a cash need emergency won’t arise, normally I wouldn’t have 50k in cash but I sold a house over the summer and haven’t reinvested proceeds yet

rocky

Does Tesla / AIB Finance care if lets say the final payment comes out of wife's account (deposit and all payments made from my account), do they have to declare it somewhere, is there more paperwork if that happens?

unkel

https://www.boards.ie/discussion/comment/119853225#Comment_119853225

That's a strange argument. So you rather have €50k cash sitting in the bank losing 10% per year just in case you ever have a serious cash need emergency?

If you bought a car with cash, at least you own the car and if said cash need emergency would arise, you just sell the car and have all the cash you need. Or sell some other assets,depending on how big the cash need emergency issue is of course. Chances are that cash need emergency never happens and you will be better of by thousands not lost in interest plus the proceeds of it if you (like me) invest in renewables on your house, bringing down all future utility bills significantly

Mad_maxx

https://www.boards.ie/discussion/comment/119853340#Comment_119853340

In a cash need emergency, you quite likely could not afford to wait for the time it takes to sell an asset and perhaps such an asset might be in a weak market

unkel

Of course I wouldn't recommend anyone spending €50k on a car who would then have to live pay cheque to pay cheque, you'd need some sort of buffer anyway, no matter how much you earn or spend. But overall you'd save significant money by paying cash for a car and not paying thousands in interest and finance charges. But I'm well aware I'm in a minority here. Almost all Irish people buy new cars on finance. You could tell by walking around in Ballsbridge in 2006 and count the Bentleys and Ferraris, if you went back there in 2008, they were all gone. And so were the private helicopters. All borrowed money 😂

CuriosityKilledtheCat

I'm keeping options open regarding buying for cash or financing about 50/60% with AIB finance. As of today buying for cash is a possibility and I will keep saving in the meantime and see where I am at financially come delivery time. I ticked the box for finance on my order but havent heard anything yet - I presume it will be closer to the time the car will be delivered?

Jog501

https://www.boards.ie/discussion/comment/119851375#Comment_119851375

You pay interest on the amount borrowed, so car price less deposit but if you pay off ballon with cash, trade in or hand back car you pay less interest than say a 5 or 6 HP as it's over a longer term.