Loan to pay for car

usermay2011

I need a bit of help, family member wants to take out a loan to pay for a car and has asked me to shed some light on whether it is a good deal. Can you help me out with this one as I am new to loan shemes:

Santander Consumer loan:

Cash price of vehicle 34,023.00
deposit 13,000.00
amount of credit 21,023.00

credit fee facility 175.00
completion fee 175.00
interest 4,154.51
total charge for credit 5,104.51

interest rate (fixed for duration of agreement) 5%

representative 10.5% APR

Credit and charge for credit is repayable by
1 inital repayment 564.32
35 monthly repayments 389.32
1 final repayment 11,933.05
Guaranteed future value is 11,758.05
Total amount payable 39,123.57
duration of agreement 37 months


selected mileage is 12000
excess 14.5p per mile for first 5000 over then twice that rate thereafter

you give car back at end of deal which I dont understand as it says total amount payable is 39123.57


Is this a good deal? How can it be if you have to give car back at end of loan?

R_P_W

Well if you add the £13k deposit to the amount you pay in monthly payments for 3 years it comes to a lot less than the purchase price of the car! So you either have to give the car back or pay a lump sum.

This looks like some kind of hire purchase rather than a straightforward loan.

Personally after having experience of car finance - I wouldn't do it. Borrowing that much money at that rate for somethign that is just going to depreciate in value as soon as you drive it away from the garage - seems a bit crazy to me.

withabix

APR is not competitive (probably due to the size of the loan).

You may get a lower APR if they make an outright purchase with an unsecured loan.

What is the car? Lease deal is probably available from the main dealer/manufacturer.

Is it new or used?

What is the mileage limit? Clearly there will be one as there is a GFV.

opinions4u

Rate is ok, but nothing special.

How do you plan to pay nearly £12,000 in one go in 36 months?

pvt

It sounds like a "Lease Purchase" deal.

The final (baloon) payment of £11,933 technically has to be paid, but they will guarantee to buy the car back off you for £11,758, so in practice you either hand the car back with a final payment of £175, or buy the car for yourself for £11,933.

Which you do obviously depends on the value of the car at that time - if it's worth £15k then obviously buy it, if it's worth £8k then obviously don't.

Does the cost also include servicing and maintenance?

Pipz

usermay2011 wrote: »

you give car back at end of deal which I dont understand as it says total amount payable is 39123.57

As R P W mentioned if you pay the final value fee of £11,933.05 then the vehicle is yours for the total cost of £39,123.57 over the 37 month agreement period.

If you decided not to pay the final value fee then the vehicle is returned and would cost £27190.52 for the agreement period (assuming you didn't go over mileage limit of 12Kpa).

Apples2

How much do cars like that sell for after 3 years?
Are there any 3yr old cars with less than 36k miles (is that a reasonable mileage ?)

Very unlikely their 3yr old car sitting on the drive is worth giving up 12k in cash for. They'd rather have a new one by then.

BugsyBrowne

What car is it?

poppasmurf_bewdley

So basically, you'll be paying £39k in total for a car that will be worth £11k in three years time.

Or ... you will pay £28k and have nothing to show for it at the end of three years.

And you'll be restricted to only driving 36k miles or less, or it will cost even more.

dealer_wins

Insane amount of money to [STRIKE]spend[/STRIKE] waste on a car for 3 years restricted use!!

usermay2011

Its a range rover evoke just a couple of months old.
cheers for your replies