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Someone got talking to me yesterday about car finance . What he was basically saying is that if you where to go to a main dealer for a used or new car citroen being cit , ford being ford etc..........................you where more likely to get finance there than if you where to go to a used car supermarket . Maybe someone can recitfy this ?
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Considering finance to be the preferred way for just about ANY dealership to sell their vehicles, can't see one being better than the other.
BUT.... go the other way, to the, essentially, GUARANTEED LOAN, led places (you know, the ones with vehicles in a compound, or on a data-base & lacking price tickets!!) & you'd be hard placed to use cash! I would steer clear of these & suggest, however hard up for finance, potential buyers look elsewhere, for funds.
& a link for all stuff £$£$£$, www.moneysavingexpert.com I've mentioned our site, here, several times, now.You'll find they're nearly a friendly a bunch, as us lot!!
VB
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A friend of mine went to a well known car super market, when he said he wanted to pay cash, he actually had the 6k in notes with him, they didn't want to know....
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I know that most main dealers have their main, manufacturer finance company and then a 'second string' company for those with less than stellar credit. However, I would imagine that many supermarkets would have that - some, no names mentioned - pretty much treat everyone as though they were that kind of risk, and price their cars and finance packages accordingly.
Of course many of the 'guaranteed finance' people will not refuse you but will offer you a deal like "£5k car, £4.5k down and 72% APR" - not a refusal, but both unaffordable and irrational.
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With house prices having risen at the silly rate they have, most home owners will have massive equity in their property, unless they have recently moved.
I suggest a Homeowner Loan (As C&G/LloydsTSB call them). Same APR as a mortgage and available with fixed/discount/capped rates if you borrow enough.
I know it's secured on your property, but if you've got plenty of equity (and I mean PLENTY, bearing in mind the possible crash approaching) AND you have the intention and means of paying the loan back anyway, then secured loans are the CHEAPEST and best way to borrow.
AND if you've got a good mortgage payment history, they won't even check your credit rating, if you've got a duff one!
I know a lot of people don't like secured loans, but if you've got a mortgage you've already got a massive one anyway!!!!
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...and if it all goes wrong, you can recover most of the equity by selling the vehicle anyway!
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Are you sure about mortgage finance being the cheapest way of borrowing money - quite aside from the desirablenes or otherwise of security issue, that is.
The reason I say this is that, for some reason, fixed rate personal loan APRs seem actually to be lower than mortgage rates. Most mortgage APRs (excluding discount deals, capped, etc.) seem to be in the 6.5% range, whereas personal loans seem to be at about 6.1% if you shop around.
Totally illogical, given the reduction in risk that security should bring, unless both:-
a. the unsecured personal loan market is both profitable (i.e., these rates are only available to *very* low risk clients) and
b. the mortgage market is pricing in a significant reduction in the available equity, making the security less attractive (albeit some security is always better than none).
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Unsecured APRs might appear cheaper, but if you add repayment insurance to unsecured loans, this is normally added to the LOAN, rather than being charged as a separate policy, as it is with secured borrowing. This means you pay extra.
Comparison of unsecured loan and secured mortgage-type loan total amount repayable almost always makes the mortgage-type loan cheaper from my experience. There is obviously the risk of rates rising however, on secured lons, unless you have a fixed rate.
Plus, if you repay early, the mortgage-based loan won't have the same interest penalty charge as a persoanl loan.
In recommending secured loans, I am of course NOT referring to the loan-shark type secured loans which are incessantly peddled on tv, I'm referring to loans from High Street banks and building societies.
I financed by company car opt-out car using a secured loan at 3-year 2.5% discount off lender's standard variable rate. Unbeatable IMHO.
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Unsecured APRs might appear cheaper, but if you add repayment insurance to unsecured loans, this is normally added to the LOAN, rather than being charged as a separate policy, as it is with secured borrowing. This means you pay extra.
I agree with that, with the caveat that it depends more on the way the premium is calculated than the way interest is charged. However payment protection insurance is generally very pricy and, where there is a valuable asset being bought with the loan (even a depreciating one like a car) almost certainly unnecessary - if it looks like a good idea, do you really need that loan?
Plus, if you repay early, the mortgage-based loan won't have the same interest penalty charge as a persoanl loan.
The standard penalty, if there is one, is usually two months' interest and is in lieu of an administration fee. Most non-flexible (i.e., discounted) mortgages have an admin fee for such overpayments in the region of £200.
I financed by company car opt-out car using a secured loan at 3-year 2.5% discount off lender's standard variable rate. Unbeatable IMHO.
Probably true, although I wouldn't want to base my whole mortgage around the cheapest way of raising about a tenth of it to pay for a car over three years.
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The car finance was an additional loan, not part of my mortgage, which, incidentally wasn't on as good a deal over that 3-year period!!
I guess the "One Account" type deals are also probably quite good if you've got the willpower to not eat in to your equity un-necessarily.
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