Oh, yeah that's right the other reason I took the deal was a lower interest rate and mileage doesn't matter in that there is no 10p a mile or anything. BUT I amresposible for finding the remaing capital outstanding.

When it comes to trade in value against what is still outstanding capital of course it's another matter!

I'm thinking of purchasing either a new or nearly new UK scoob, either saloon or Wagon (I can't yet decide).

what is their equity finance all about. i.e what is the normal deposit and how much of the car do you buy in the first few years.

I had a WRX last year and went back to a Cosworth for a while, but due to family comitments I want something more practical, hence the wagon idea.

Does this finance also apply to approved second hand Subaru's or just new jelly front scoob's

[This message has been edited by Scott.T (edited 20 March 2001).]

Scott

You can get finance on approved used Scoobs from your dealer.

Mike

Is the finance on the whole car or only half.

The remaining half being delt with at 'say' the end of a 3-year period.

They're actually called IM Finance and I used them. They're pretty good, no probs at all and the interest rate was better than a bank loan. They do all the usual bank services, credit cards etc, via Bank of Scotland I think.

Essentially there are two types of "equity" purchase, one guarantees a future value and you can walk away at the end of it, the other is a lower interest rate but gives no guarante of future value and you must sort it out after 3 years. Both are obviously pitched at persuading you to have another after the three (or whatever) years.

The deposit and purchase ratio are up to you, within limits. I think I went 60/40 IIRC.

I have been checking out the finance deals at Subaru recently too. Seem pretty good. Contract hire is something you might want to consider. You don't actually own the car during the three year term, but the hire payments are normally equivalent to the depreciation that you would have suffered had you bought the car outright anyway, so effectively you're no worse off! After the three year term you can also (unofficially) buy the car back from the finance company at market value. The advantage of contract hire is that the monthly payments are low, so you can effectively afford a more expensive car than you could have bought outright.

Good luck,

MS

What was the contract hire cost, on what value of car.

Does this include servicing and repair costs.

Hi Scott,

I'm getting personal contract hire on a new P1. New price after much haggling of £29250, deposit of 10% (£2925) and 36 monthly payments of £400. This is not including maintenance, which is an extra £43 a month.

After 3 years I would have paid out £17400. At the end of my contract the car is estimated to be worth £12-14000, so the money that I will have lost 'hiring' the car, I would have lost in depreciation anyway. If after the term I am still enchanted with the car and want to own it, i can buy it from the finance company at 'market value'.

Good deal if you ask me.

MS

I'll be paying a visit to my local dealer on saturday then !!!!!

Fancy a P1 too then?

MS

Be very careful with contract hire. If you sign up for a 3 year contract hire agreement and then decide 18 months down the line that you either cant afford the car or you want to change the car you can face some pretty alarming penalties.

I have just finished a 3 year contract agreement and would never consider them again. I wanted to change my car after 18 months, I contacted the contract hire company (which was a large reputable one). They responded with a £12,000 settlement figure (the remainder of the contract). This was to just give them the car back and walk away with nothing. When I asked what would happen if I said I could not afford the repayments they responded with a statement that equated to me declaring myself bankrupt in order to get out of the contract.

If you do decide to go down the contract hire route ensure you get the redemption penalties in writing beforehand.

Also do not try to keep the costs down by offering a low annual mileage. If you specify that you will only do 10000s mile per year and you end up doing 15000, you will incur a charge at the end of the contract for each mile (10p per mile is a good benchmark) that's a bill for £1500 quid at the end. If you decide to take the maintenance option you will also be penalised about 3-5p per mile for this (that's another £750). Which brings me onto the con that is maintenance, this varies depending on which company you use but usually includes TAX, Service costs and tyres. The tyres one is a good one because some will allow you one new set per car and others will replace them when required. 'When required' means when the tyre is down to the minimum legal limit not when you really need them or hget a puncture and you will probably have to use kwik-fit or ATS for replacements as they have most of the contracts for lease companies.

Regards
Paul




[This message has been edited by paulmon (edited 20 March 2001).]

I have always purchased cars like this, and you have to shop around or use a good broker.

Check all the small print, e.g.

1. what to sell after 18 months - will they want all the full 36 months interest.
2. Is there an opt out clause once the finance is half paid. This can be quite useful as sometimes the bottom falls out of the market (sometimes...) and once you had paid half of it, normally 18 to 24 months into it you can just hand the thing back along with the keys and U don't take the hit on the negative equit.
3. I have sometimes used limited mileage as this again means you can hand back the car at the end of the term if it does not cover the balloon payment at the end.


..Good luck

Scott,

Try the following web site, it will give you an indication on the prices you can expect to pay for both Contact Hire and PCP.

Historicaly Ive used PCP's to buy my cars, but recently switched to balance payments. I took an agreement like this for my S4 with IM finance (thanks Listers)

PCP are OK, but charge high interest, and are expensive to get out of early - something I do all the time. Take out a 3 year deal, and you will find after 6 payments, the capital borrowed is about the same, as they front load the interest payments.

balance payments work out the interest on a daily basis. This means that if after 6 months for example you will see a decrease in capital owed. Below is a rough example of the calculations Ive done. Its a 3 year PCP vs 5 year balance payments, where the balance payments is settled at three years.

Car Costs 27500
Deposit 2500

PCP 532 (approx 8.9% APR)
Ballon 12000
Interest 6127

Balance Payments 522
3 Year settlement 11000
Interest 5000

You can also arrange a balance payment, with an agreed settlement at 3 years.

Most dealers dont seem to advertise this as they make less commision. I wish they would, as there are a lot of people that dont change their cars during the PCP period due to the settlement figure and front loading of interest.

Jonathan

Straight forward finance (H.P.) is the only sensible offer from Subaru and new last year was only 5.5%. Contact Hire can be very bad news, have a chat with someone inthe know b4 u go further.
lol
Matthew

I'll be visiting my local Subaru Dealer at the weekend, so I'll find out what the different options are then.

Cheers Guy's

Matt-e-boy,

Apart from not being able to get out of the contract early, why is contract hire bad news? It looks by far the cheapest option to me..

MS

Lads...I chose IM Finance through a Subaru dealer PCP because it allowed me to put down a minimum deposit. I had previously always had bank loans for cars. The disadvantage I found with loans was that you had to tie up a relatively large amount of capital as deposit to make the monthly repayments manageable. Although PCP's do have their drawbacks, as stated above, they do have the major advantage of letting you drive the car you want without putting down much cash upfront.

Summing up...if you want the best deal..pay cash or get a bank loan (Nationwide is cheap) but if you have other things to spend your money on aswell, a PCP could be the answer.

Cheers,

Rich

Rich

Balance Payements lets you put down as small a deposit as a PCP. But you should pay less interest over the same time period, and if you settle early much less penalties. The only drawback is no guaranteed residuals, and a variable interest rate (today thats good news)

Jonathan