Mercedes Agility vs funding new car with cash

gypsymoth

Hi all

Apologies in advance for the a) basic question and b) it being about buying a mercedes, which is arguably not very money saving. However, I'd appreciate some advice.

I'm in the market for a used Mercedes that costs £30,000
My current car would get me £12000
I could fund the difference using a combination of cash and zero percent credit card

Mercedes are trying to sell me their Agility product (which I believe is backed by Black Horse Finance). I've never purchased a car using finance before, and while the idea of being able to change the car in 3 years time is attractive, I don't want to be stung with a crazy APR.

The salesperson ran through some figures which - I think - came out as an overall cost of £34000 (and an APR of 7%). Payments per month were around £300. Option to buy at end is £17000

What I'm struggling to do is get a simple view on whether I'm better off paying cash - and taking the £8500 depreciation over 3 years - or going into Agility. Despite being reasonably financially savvy, I cant get my head round the idea of sinking my deposit + 3 years of payments into a car I might not keep after 3 years

Can anyone suggest an online calculator where I can fiddle with the figures to get a definitive decision or provide an opinion?

Many thanks!
:money:

Money_Rollercoaster

Whether you buy it outright or lease it via Agility, it'll still depreciate. That future value figure of £17k is dependent on the vehicle being fully serviced, kept within their stipulated mileage limits and free from faults / damage when you hand it back.


If you've got £12k to put in, you only need to borrow £18k and you could probably do that on a loan at a much better rate. You won't get it down to £300 PCM unless you go for 5 years, but at least it's better than paying the same for three years and still owing £17k at the end of it. I had a similar conundrum and got a loan for 5 years on a brand new vehicle. I pay the usual DD and make monthly overpayments, which should clear the loan in 3 years.


I'm pretty sure their interest will be on the whole purchase price at a flat rate for three years, hence the big interest charge.


I always use this to mess around with loan figures ...


http://www.moneysupermarket.com/loans/calculator

gypsymoth

Money_Rollercoaster wrote: »

Whether you buy it outright or lease it via Agility, it'll still depreciate. That future value figure of £17k is dependent on the vehicle being fully serviced, kept within their stipulated mileage limits and free from faults / damage when you hand it back.


If you've got £12k to put in, you only need to borrow £18k and you could probably do that on a loan at a much better rate. You won't get it down to £300 PCM unless you go for 5 years, but at least it's better than paying the same for three years and still owing £17k at the end of it. I had a similar conundrum and got a loan for 5 years on a brand new vehicle. I pay the usual DD and make monthly overpayments, which should clear the loan in 3 years.


I'm pretty sure their interest will be on the whole purchase price at a flat rate for three years, hence the big interest charge.


I always use this to mess around with loan figures ...


http://www.moneysupermarket.com/loans/calculator

Thanks for this - appreciated

Understand I cant avoid dreaded depreciation but the 'feature' the salesperson kept pushing was the "manufacturer absorbing depreciation instead of the buyer". Couldn't quite see where that was happening to be honest

Money_Rollercoaster

Sounds like sales fluff to me. There's no such thing as a free lunch.

gypsymoth

Money_Rollercoaster wrote: »

Sounds like sales fluff to me. There's no such thing as a free lunch.

Amen! :beer:

mrmagooooooo

Agreed with all here.

Pay Cash. the sales guy is obviously pushing it for the commission.

:beer:

gypsymoth

mrmagooooooo wrote: »

Agreed with all here.

Pay Cash. the sales guy is obviously pushing it for the commission.

:beer:

Cheers

intuitively I think I;'ll be better off over the 5 years paying cash even if I'm hit with £8500 depreciation. If I decide the keep the car for more than 3 years, I don't like the idea of being 'forced' into a decision by the loan agreement

bearcat16

You might get some extras thrown in if you use their finance, such as free servicing or a deposit contribution.

There's nothing to stop you taking the finance, snagging the freebies, make a couple of the payments then settle the finance using cash.

It's what I usually do, and I have known salesmen to even advise this.

aphill24

It's been reported that pcp finance is now accountable for 80% of new car sales. What the salesman said about the manufacturer absorbing the depreciation is total tosh as I expect you already know.
With pcp your deposit is likely to disappear and it is used to bring the monthly payment down to a level to tempt people in to taking on the new car.
My own personal point of view is I don't like the idea of pcp but that is just my take on things. I don't like renting a house, tv, or anything else I prefer to purchase a product outright, each to their own.
Where people come unstuck is their car is usually used as a deposit and at the end of the pcp deal if they have no savings they have to find a large sum of money to purchase another car starting from scratch or be a slave to another pcp deal.
The pcp deals can work for a basic cheap run around with a very low deposit but not in my opinion on an expensive car at 30k.

Pixie5740

mrmagooooooo wrote: »

Agreed with all here.

Pay Cash. the sales guy is obviously pushing it for the commission.

:beer:

Yes he probably is since they make more money selling the finance than the car. That's why when you take the finance you are able to negotiate more money off the price of the car and/or some free servicing. I was recently looking at VW and they were giving you £1,000 off the price of the car (providing you took their finance) before you even started negotiating. There's nothing stopping you from taking the finance to get the incentives and then paying the finance off straight away. The salesperson gets the commission and you get your discount. Win-win.

MataNui

Since the salesman has already lied to you about the finance then i think you would be much better off telling him to shove it. He is trying to flog you a straight PCP deal (deposit, monthly, balloon payment).

Its ALWAYS the customer who pays for the depreciation. With a PCP you are basically paying for the depreciation plus a profit for the dealer/finance company and will have nothing to show for it at the end. I cant see any reason why people choose a PCP over a standard lease deal really. You would only own the car if you refinanced the 17k at the end but for most people they are left with nothing.

#Edit#
Should also point out that here have been several threads on here lately about Mercedes finance and none of them are positive.