Car Finance Offer

gtfletcher

Just been offered a type of car finance I've never come across before and was wondering if anybody else has had any experience of it.
Basically because the dealer couldnt offer me a monthly repayment that suited compared to what my bank were offering he passed me onto their finance director who came back with the offer of 12 monthly payments of £150 per month and the following 36months at £230 with the option to renegotiate deal at the end of the first year.

As I said I've never heard of this before and after several hours of searches online I have come up empty. Anybody got any advice? Should I bite his hand off or run for the hills?!

CLAPTON

they are offering

12x 150 plus 36 x 230 = 10,800

what is you bank offering?

[Deleted User]

Is this a reputable dealer?

Tixy

What finance company is offering the deal (who is underwriting the finance)?

What is the APR on the agreement?

Is it definitely just a single agreement, or is it 2 proposed agreements?

Is it guaranteed that you will get the second set of payments, or is this something that s potentially a variable APR and therefore variable how much those repayments will be?

If the second set of payments is a seperate finance agreement is it subject to a new credit check in 12months time? is it possible that they won't be able to offer any finance at that point and you would be asked to repay the loan in full?

Is the debt going to be secured on the vehicle and will there be the option to voluntarily terminate the agreement at some point?

Make sure you have a copy of the agreement and plenty of time to read it before you agree to purchase the vehicle.

Have you tried getting a personal loan from a mainstream lender to purchase a car? Do you have problems with your credit history?

How much is the maximum you can afford a month in repayments?

gtfletcher

It's from a main Hyundai dealer. I can't remember all the details off the top of my head, I've got all the details on my desk at work but head was so fried after talking to the guy this afternoon!

it was definitely only one agreement and there was an early termination clause after 50% of the balance is clear if memory serves.

I was declared bankrupt 10 years ago and discharged 8 months later so credit history isn't great.

CLAPTON

gtfletcher wrote: »

It's from a main Hyundai dealer. I can't remember all the details off the top of my head, I've got all the details on my desk at work but head was so fried after talking to the guy this afternoon!

it was definitely only one agreement and there was an early termination clause after 50% of the balance is clear if memory serves.

I was declared bankrupt 10 years ago and discharged 8 months later so credit history isn't great.

the option to terminate after 50% of the payments is standard for HP

Tixy

What is the purchase price for the car?

gtfletcher

the car is £11,000 and they valued mine as part ex at £2100. as far as i can remember from my conversation with the guy the monthly payment of £230 the deal reverts to after 12 months is a guaranteed amount unless i chose to renegotiate the deal over longer or put down a further lump sum etc.

Tixy

So you are borrowing £8900. If that is all there is to pay then I think its an APR of around 5%. Which seems a pretty good deal.

Can you only afford £150 a month for the first year? it seems an unusual deal for them to have come up with unless you have specifically said you can't afford higher repayments.

gtfletcher

i wanted to minimise the monthly repayments and pay off extra when i can afford to. i set them a target of £180 and the closest they could get to was £205 which is when they rolled in the finance director!

it sounded like too good an offer to refuse but thought id better sleep on it and do a bit of research because it was something i had never heard of before and after a few hours googling i was somewhat concerned at having found no results for my searches!

forgotmyname

The issue will you be able to pay £230 a month next year and also pay for servicing etc.

Possible you may need tyres and brakes before the loans paid off also.

How will your finances look after say a £300 service and another £300 for other work + the £230.

£150 - £230 is a big jump when other bills arrive.