Large finance deal agreed and then subsequently refused!!!!

ILW

neilmcl wrote: »

If you really believe that it's always cheaper to pay in cash (if you have it) rather than finance or because it's the "sensible" option then you really don't understand how car finance works or the concept of depreciating assets.

It will depreciate at the same rate whether bought with cash or borrowed money.

ILW

smashingyour... wrote: »

Nicely put but how do you get a Mercedes-Benz cheaper than a Ford?

Can you not buy Fords in the way you describe?

These are rentals not purchase and the residuals tend to be higher on Mercs than Fords.

smashingyour...

ILW wrote: »

These are rentals not purchase and the residuals tend to be higher on Mercs than Fords.

But are double the price to start with.

neilmcl

ILW wrote: »

It will depreciate at the same rate whether bought with cash or borrowed money.

Yes but the point is who's money is tied up in that depreciating asset.

motorguy

smashingyour... wrote: »

But are double the price to start with.

That doesnt matter. And thats what people struggle to get their heads around.

With a PCP deal its really just about financing the depreciation.

So for talks sake a Mondeo costs £22K. After three years it might be worth £8K. Any PCP deal will then be based on depreciation of £14,000.

Take a Merc at £40K. It might be worth £27K at three years old, so your PCP deal really just needs to span £13,000.

Add into that how often manufacturers make 'finance contributions' or 'complimentary upgrades' and you can see how a Merc can work out cheaper on a 3 year deal.

When Mrs Motorguy was getting her (£35K) z4 for £300 a month, Mazda were offering their (£20K) mx5 for £299 a month. So is she 'stupid' and 'kidding herself' by spending the extra £1 per month on a top spec BMW or is the BMW the better deal?

Heck, even a poverty spec golf these days would cost you £300 a month, but if you go to Mercs website, you can get a brand new C Class for probably £329 a month. Which is going to be a nicer place to be?

motorguy

ILW wrote: »

It will depreciate at the same rate whether bought with cash or borrowed money.

Yes, BUT in order to support their cars in the marketplace, premium manufacturers very often offer finance incentives that are not otherwise available to cash buyers - 'complimentary trim upgrades' or 'finance contributions', and these are offers that a cash buyer wont get.

ALSO, dont forget when you buy your car with cash, you have absolutely no control over the future value of it. With a PCP deal you do. You know exactly how much the car is going to cost you and over how long.

motorguy

smashingyour... wrote: »

But are double the price to start with.

On that point, Mercs and BMW's arent generally 'double the price to start with'.

A Merc, Audi, or BMW will generally be just a few thousand more than a Ford or Vauxhall.

smashingyour...

motorguy wrote: »

On that point, Mercs and BMW's arent generally 'double the price to start with'.

A Merc, Audi, or BMW will generally be just a few thousand more than a Ford or Vauxhall.

He was taking about a 40k merc not many Fords or vauxhalls are 37k.

OddballJamie

motorguy wrote: »

On that point, Mercs and BMW's arent generally 'double the price to start with'.

A Merc, Audi, or BMW will generally be just a few thousand more than a Ford or Vauxhall.

MRP maybe, but you can get at least 15% off a big Ford/Vauxhall without even breaking a sweat, I doubt you can do the same for the German brands.

That's also the problem when car mags publish depreciation percentages, they are always based on MRP.

motorguy

smashingyour... wrote: »

He was taking about a 40k merc not many Fords or vauxhalls are 37k.

Merc E Class starts at £32K, Merc C Class starts at £26,000

Quite a few Fords or Vauxhalls are £23K+