Do you get frustrated at people throwing money down the drain?

cepheus · 5 February 2014 at 10:50AM

A close relative recently came into a modest inheritance which although not life changing is far more than he has ever had before. I suspect it's the first time he has had more than a few pennies to his name and he still works at probably around the minimum wage.

I somehow suspected this would be quickly wasted away. I tried not to become too involved, since he would probably ignore any advice, then use this as an excuse to come to me for potential future troubles.

He took out a finance agreement for a new car, in fact the company was so good to him they sent a driver on a 60 mile round trip to collect him because 'no-one could offer him such a great deal in the (poor) large town' where he lives. Does this ring alarm bells?

So in other words although he has more than enough to buy the same car outright and resell it at a later date far cheaper and with with money to spare, he has effectively taken out a loan to buy one, no doubt at a silly rate as part of a finance package. I also think they stung him for insurance and God knows what else.

Rather than get too involved I just sent his wife (he doesn't do internet) an Email on the latest rules on finance agreements along with the 14 day cooling off period. I guess this will be ignored, he may have taken out the agreement much earlier than he claims.

Errata · 5 February 2014 at 11:11AM

You can take a horse to water but you can't make it drink.

Biggles · 5 February 2014 at 11:42AM

I imagine that is why he's never had more than a few pennies to his name. He kept losing them.

Not getting involved sounds like a good idea; otherwise, when it goes pearshaped (and, by the sound of him, it will), you'll be shouldering the blame.

yangptangkipperbang · 5 February 2014 at 7:31PM

I have a 29 year old son who has done this since he got his first 20p pocket money......................:(

mountainofdebt · 6 February 2014 at 1:00AM

cepheus wrote: »

He took out a finance agreement for a new car, in fact the company was so good to him they sent a driver on a 60 mile round trip to collect him because 'no-one could offer him such a great deal in the (poor) large town' where he lives. Does this ring alarm bells?

So in other words although he has more than enough to buy the same car outright and resell it at a later date far cheaper and with with money to spare, he has effectively taken out a loan to buy one, no doubt at a silly rate as part of a finance package. I also think they stung him for insurance and God knows what else.

Actually it may depend on the deal being offered by the finance company.

I work for a dealership and I asked one of the managers why we were settling so many finance deals soon after they were taken out.

He told me that the finance company was offering the customer a bigger discount if they took out finance so what alot of customers were doing was buying a car on finance then giving us the money from their bank accounts to settle the finance for them.

Also it could be at 0% .....as I said it depends on the deal

zygurat789 · 6 February 2014 at 8:53AM

mountainofdebt wrote: »

Actually it may depend on the deal being offered by the finance company.

I work for a dealership and I asked one of the managers why we were settling so many finance deals soon after they were taken out.

He told me that the finance company was offering the customer a bigger discount if they took out finance so what alot of customers were doing was buying a car on finance then giving us the money from their bank accounts to settle the finance for them.

Also it could be at 0% .....as I said it depends on the deal

There's no such thing as a free lunch or 0% interest.

cepheus · 6 February 2014 at 10:17AM

I don't know of the details, but I doubt if they would personally invest the time to chauffer him that far if there wasn't a good cut in for themselves.

The problem is that they know that some people are used to living from month to month, and don't think of the long term cost or APRs. £300 a month sounds cheaper than £9000 up front.

0% deals (I doubt if it was) often mean the potential to negotiate down to the real price is limited. He might also accept the extra's where all the margin is.

zygurat789 · 6 February 2014 at 11:49AM

cepheus wrote: »

I don't know of the details, but I doubt if they would personally invest the time to chauffer him that far if there wasn't a good cut in for themselves.

The problem is that they know that some people are used to living from month to month, and don't think of the long term cost or APRs. £300 a month sounds cheaper than £9000 up front.

0% deals (I doubt if it was) often mean the potential to negotiate down to the real price is limited. He might also accept the extra's where all the margin is.[/QUOTE]

0% finance means the dealer has already given the discount to the finance company.

Bradfield · 6 February 2014 at 5:03PM

Well, the jury seems to be "out" on this one. It does not appear to be yet "proven" that he has poured the money down the drain, in this instance.

Where I live I can get a 4 pint carton of milk from Asda for £1. The other day I could not be bothered going to Asda so went to Marks and Spencer, which is nearer. They charged me £1.49 for the same carton of milk.

That is what I call money down the drain. It does not make me frustrated that people are prepared to pay such inflated prices. It is their choice.

When I bought my last computer a friend shook her head at me. She thinks it was several hundred pounds down the drain "playing", as she calls it with a gadget. She despises computers.

She is more than proud to tell me about her newly planned (very expensive) holiday abroad. I think it is money down the drain.

A lot of it is "relative". We have to be careful about being judgemental.

cepheus · 6 February 2014 at 7:19PM

I doubt it, finance apart, driving any newish car around is money down the drain unless you use/need it it a lot, or can afford that lifestyle due to the high devaluation during the early years.

Simply getting a two year old car then exchanging it when the guarantee runs out would be far better value. Or do what I do and drive round a eight year old Hyundai without guarantees or anything which costs a pittance! (Zero snob value though)

Strangely enough he isn't interested in snob value, he isn't like that. He is used to driving round the latest heap of junk the local Arthur Daley dodgy dealer has thrown at him, so he now thinks anything which isn't new, or under warranty, must be unreliable and will break down. I try to explain some car warranties last for many years nowadays because they don't break down much, but he doesn't believe me.

Personally I wouldn't risk parking my Hyundai where he lives, let alone a new car, but there I go again!

FLAPJACK · 6 February 2014 at 9:38PM

I had a frustrating time a while ago trying to convince someone that they were NOT throwing their money away by joining a company DB pension scheme!.

Their argument was "Do I look old enough to worry about a pension"...infact that was the IDEAL time to start paying in.

Still as has been said on this thread ....you can't make a horse drink...

Do you get frustrated at people throwing money down the drain?

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