Buying a brand new car

jeanat9

Hi all,

I'm looking to buy a new car at the moment. My first brand new car.
I have different financing options as well as the option to take a small loan out and buy the car outright.

The dealer is Mercedes and their financing option is of some interest to me as it would in theory give me the opportunity to change car after 36 months and use the equity of that car to renew my deposit.

But I'm not totally sure this is advantageous in terms of refinancing as the equity seems to be uncertain and the value of my deposit how big or small, has no effect on the optional purchase of the car after 3 years. And it is still large.

Or I could take out a personal loan and own the car out right, but at least I would own it.

Would Anyone have any advice and maybe experiences to share?

Also, should you haggle on prices for factory new cars? In terms of financing and buying. If so any recommendations would be greatly appreciated.

I'm UK based.

Thanks for your time,

Jean

DUTR

So are you going to buy it or lease it?
If you are thinking of changing in 3 years, then it maybe better to lease it.

k3lvc

Pay a visit to www.drivethedeal.co.uk and get an idea of the real cost of your proposed purchase then head into your local dealer and negotiate.

The finance vs bank loan debate will rage forever and I use whichever method suits at the time. With a couple of Mercs I've borrowed over 4 years and sold after 2 with the car being worth more than 50% of it's original value + interest cost. Car needs to be specced well and bought at the right price for this to work

jeanat9

Thanks for your reply, I'm interested in the lease but worried the equity of the car might not be enough to cover the deposit on an other lease if that make any sense.
I would be looking at a large deposit on the car to have minimal monthly payments but would hate to have to foot over another deposit to start another lease.
So my worry is largely regarding the equity of the car after 3 years

Kind regards,

Jean

=rizla=

The option to buy price will stay the same, its what the dealer thinks the car will be worth after 3 years. Some dealers like to keep this lower so they have plenty of flex if the market should drop, and if it doesn't you have more 'equity' in the car to use as a deposit for your next. Some others have this high to drop the monthly payments, sell you a car today and worry about tomorrow in 3 years time.


All the higher/lower deposit will do is lower your monthly payments, if you have the cash and you're paying the dealer APR then the more you put down the less interest you will pay. Don't forget the final/bubble/MGFV/balloon payment will incur interest charges throughout.


One other website to try is www.carwow.co.uk , if nothing else its a good bargaining tool.


I don't like the leasing idea, you are fixed into a contract an I believe its hard to change, where a pcp can be more flexible, also in the 2 ones I've looked at the pcp was cheaper over the 36 months.

Hotspur

Hi Jean.

Have a look at this Carfile Link for another reputable broker of new UK supplied cars.

I've used them twice before and cars are supplied by main dealers. All money is paid to the dealer not Carfile as the broker so your money is as safe as buying direct. All options, offers and manufacturer's finance deals should also be available. Cars are supplied by a main dealer in the usual way and are collected from the main dealer or sometimes delivered.

Even if you don't use a broker you could use their price to negotiate with the dealer however my experience is that the dealer struggles to get close to the broker price.

H

k3lvc

A lease will offer you no equity - just a straight handback (plus a risk of additional payment due to condition)

PCP you can hand back but there 'may' be a surplus to use as deposit (and this often depends on whether you're trading in at the same place for the same brand)

I've leased once where the deal was good and I knew it was a one off with circumstances likely to change before the next car purchase

jeanat9

This is what my dealer says,

If you choose to take another Mercedes-Benz you can use the equity in the car to use as a deposit. So if the balloon is £12k and its valued at £15k then you have £3k as the deposit. If for any reason the car is worth less than the balloon then you just return the car to Mercedes-Benz.

In that sense it might be worth buying out right, as at the end of 36 months I might be faced with a tuff bill to keep the car. or refinance for a year which is bound to be steep.

Regards,

Jean

=rizla=

Also if after 2 years your circumstances change you can change car, oh and i'm sure you don't have to stay brand loyal either, you fancy a Jag next then they may offer you the 15k as well so you have 3k to put down onto a deposit on a new jag, they may even want to offer you a little more to get you to swap, or if they want your car.

Mobeer

Always haggle.

At least check what offers are available from a broker. Even if you buy straight from a dealer the broker price can be used as a tool when negotiating.

Take a look at loans as a means of financing - MSE has an article on loans:
http://www.moneysavingexpert.com/loans/cheap-personal-loans

If looking at a finance deal, get it in writing, get away from the dealer and take a look at the numbers in detail.

PasturesNew

jeanat9 wrote: »

... buy a new car ... financing ... loan ... Mercedes ... equity .... renew my deposit.

These words, especially when joined together, scare me rigid.

If you take out a loan, you're not paying cash.
If you can 'afford' a Merc, why not pay real, proper, cash for something older/different make and know it's yours?