Ford Options or Personal Loan?

LeeSouthEast

Have to agree with iandv here. Ford Options in this limited scenario (see his other thread), makes the best sense.

Rolandtheroadie

OK, lets forget owning the car.

Looked at the other thread.

With the original figures, the figures stacked up against the loan but I still thought loan as any time I've looked at car finance, it's been cheaper with the bank (even when the APR SEEMS to say different).
Now the total payable on the loan is £1500 LESS than the options deal.

Considering the options apr is supposedly 2.8% less, how is the total more? Is there perhaps something not quite as transparent on the Ford deal?

What car are you looking to buy? Spec? Discount?

Lemonade_Pockets

scotsman4th wrote: »

Considering the options apr is supposedly 2.8% less, how is the total more? Is there perhaps something not quite as transparent on the Ford deal?QUOTE]

The total on the Ford deal is including the initial deposit!

To equate the two you really need to work out the settlement figure on the bank loan after two years.
Rule of 78 is a bugg3r....i'll find something online to work it out later, but it will probably be cheaper by about £600 (a very rough guess).

Unless Adrian Hi has got some free time before then...i'm sure he's got a spreadsheet that'll work it out

emmell

With options, if you decide after two years you don't want the car, will Ford give you the guaranteed future value in cash, or does it only want to take your car in as p/x against another new car? hence keeping a regular turnover on new and used cars.
I know two people who have taken out these sort of deals in the past, one with Ford and one with Renault and both say they would never do it again.
ML.

iandv

Hi All

Why wouldnt they take out a car on options again? The best loan rate I have found is 7.7% and these days there is no guarantee that I would get 7.7% it would be most probably be 8%

With the options scheme the APR is 4.9% - so in theory the options deal is the best option, especially if I wanted to change the car in two years time and use any money over the GMFV as a deposit for the new car.

Also I would be interested in what car experts feel of the GMFV in 2 years time of £7839 for a Ford Kuga Zetec with appearance pack, metallic paint and the bluetooth extras.

I would like to think that in two years time that the car would be worth more than £7839? Looking on Autotrader now a 2008 Kuga is going for £15,750, so the chances are the car will be worth more than the GMFV

An thoughts?

Lemonade_Pockets

emmell wrote: »

With options, if you decide after two years you don't want the car, will Ford give you the guaranteed future value in cash, or does it only want to take your car in as p/x against another new car? hence keeping a regular turnover on new and used cars.
I know two people who have taken out these sort of deals in the past, one with Ford and one with Renault and both say they would never do it again.
ML.

Probably (no offence) because they didn't understand them properly. Which in turn was probably due to the fact that salesman didn't explain it properly so they didn't take it knowing all the ins and outs. Its not always the best way of financing a car new or used.

To answer your question: They don't give you a cheque but only because you would have to give a cheque for the same amount straight back to pay the finance off. So instead they just take the car and call it quits.

To make things easy ill try explain it with an example where APR is 0%, and its a 2yr deal. And for sake of argument lets say its worked out at 10k miles per year.

So Brand new car

OTR £15,000
£0 Deposit
GFV £9,000 - This is the Guaranteed future value after 2 years.
£250 a month for 24 months.

Fast forward two years you will have paid £250 x £24 so the settlement figure is £9000. You can pay this figure the car is all yours and you can do what you like with it.
(Even if a rate is applied the settlement figure at the end and the GFV are always the same value)

If you want to part exchange it then there effectively two scenarios:
If your car is worth £9000 or more you keep any difference. So if it was worth £10,000 you'd get £1000 which you'd probably use as a deposit for the new car.

If your car was only worth £8000 then you'd just give the keys back to the finance company (they've said they'll guarantee its worth £9000 and you owe them £9000) and start afresh with the new deal.


The alternative let say you managed to get a bank loan or HP at 0%.
After two years you needed to change the car bigger family or whatever.
Car New = £15,000
60 x £250 per month at 0%.

After two years you will owe £9000.
If the car is worth £10k at this point then you get the same £1000 to put towards a new one or put in you pocket what ever.

If its only worth £8000 then you will have to put a £1000 deposit just to get back to square 1 or load the negative equity onto the new finance deal.

The reality is that life isn't this simple but the same principles apply and its really a combination of the interest rate and the GFV (i.e whether its a pittance or a sensible figure) that decided whether a pcp is viable or not.

Lemonade_Pockets

iandv wrote: »

Also I would be interested in what car experts feel of the GMFV in 2 years time of £7839 for a Ford Kuga Zetec with appearance pack, metallic paint and the bluetooth extras.

I would like to think that in two years time that the car would be worth more than £7839? Looking on Autotrader now a 2008 Kuga is going for £15,750, so the chances are the car will be worth more than the GMFV

An thoughts?

Ford have really started to brick it with residual values so are playing it safe. To give you an idea my Kuga which is just about to be part exchanged had a GFV after one year of £14150. I've just part exchanged it (9months old ) for £16,000.....now the garage has gone a bit over the top but low £15's was about the going rate.
In 2years time i wouldn't like to guess but i think you should be in equity, but if you aren't then you'll still be better off than if you took a bank loan.

what-a-save

Dependant on which model you are purchasing, if you use the Ford options route you can receive up to £800.00 deposit allowance. Once the allowance has been obtained you can always settle the balance if you have the funds set aside by way of a bank loan, this way you have gained £800.00 towards the cost of your bank loan and have the freedom of owning the car.

iandv

hi lemonade

So you think ford options is the best option? As that is the conclusion I have come to. As I plan to change the car over the next 2 years it will be better for me than a bank loan both financially and flexibility - hopefully !

Lemonade_Pockets

iandv wrote: »

hi lemonade

So you think ford options is the best option? As that is the conclusion I have come to. As I plan to change the car over the next 2 years it will be better for me than a bank loan both financially and flexibility - hopefully !

With the info that you have provided on this thread...i haven't got round to looking at your other one then yes in my opinion.

One thing to double check is whether the figure they have given you as a GFV includes a credit facility fee and option to purchase fee. If you have a quote these should be itemised. To me it wouldn't make it any difference as i'd rather have some sort of GFV but if you crunch the numbers for your expected personal circumstances i.e. if your going to sell it after 9months or 12 months or 2yrs and its close i suppose this could swing it.