Financing a car advice

flashsnaps

Hi,

I am looking to purchase a Mini Cooper on finance but which option is going to be preferable.

Total car value is £9900.

(1) I finance through Mini cooper with an interest rate of 10.8% and pay around £130 pcm for 4years. I then have the option to buy the car for around £4606 or start a new deal on another car. Limited to 8k miles a year which is fine.

(2) I take out a car loan with Natwest with an interest rate of 4.9% and pay around £180 pcm for 4years and then own the car outright.

Let me know your thoughts

BeenThroughItAll

flashsnaps wrote: »

Hi,

I am looking to purchase a Mini Cooper on finance but which option is going to be preferable.

Total car value is £9900.

(1) I finance through Mini cooper with an interest rate of 10.8% and pay around £130 pcm for 4years. I then have the option to buy the car for around £4606 or start a new deal on another car. Limited to 8k miles a year which is fine.

(2) I take out a car loan with Natwest with an interest rate of 4.9% and pay around £180 pcm for 4years and then own the car outright.

Let me know your thoughts

1. Total cost £10846
2. Total cost £8640.


I know which I would do.

Herzlos

Surely (2) is a total no-brainer?

Cornucopia

The only benefit of the dealer finance is that the future value of the vehicle is protected. However, you are paying a high price for this.

If you won't keep the car for 4 years, then the future value is not in play, and the Natwest finance is better.

If you do keep the car for 4 years, then the future value may be underwritten, but it has cost £2000 more in finance to get there. Is it likely that the car could be worth less than £2600 at that point?

If you keep the car for more than 4 years, then the Natwest finance is cheaper.

flashsnaps

Ok option (3)

I go for New Mini Cooper. On the road price of £16000.

£200pcm for 4years with 6k balloon payment at the end. 5.7% interest. I get 10k miles with that and the warranty is covered, problem with the used car for £9900 is it is 4years old and could potentially go wrong.

Herzlos

With option (3), you're paying more pcm than (2), but then have £6k to pay to keep the car, but with (2) it's yours outright.

It does give you a new car though.

What's most important to you; the new car, the monthly payment, or the total payment?

Cornucopia

Are there any extended warranty options with the second hand car?

Is there a deposit for the finance on the new car?

I've just been through this myself, and it is a tedious business.

Happy with my new car and the deal, though. New Renault Captur 1.5dci, 4yr PCP @ 2.7% APR, Servicing bundle, 4yr warranty, £159pm, zero road tax. Costs about £45 to fill up its little fuel tank, and it then goes for 500-600 miles (maybe more when it has been run in a bit).

flashsnaps

Comes with 1yr as standard.
Deposit is around £2600 for new, paying £1800 on used.

OddballJamie

Through a broker you could be looking around £15k for a new one.

The GFMV for the new Mini seems kinda low at £6k when you are currently looking at paying £10k for a used one.
You should be able to sell it at four years for more than that and how something left for your next car.

It's also worth looking into leasing.

19lottie82

I know you've most likely got your heart set on it, but I wouldn't advise buying a mini, they're notoriously problematic.