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All Porsche Macan Related Discussion
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VanB
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Post by VanB »

Pivot wrote: Wed Aug 21, 2019 2:15 pm
PaulR wrote:It will be no surprise to you that I always buy my phones cash. For the same reason as my car - I'm tight and want my TCO to be the absolute minimum possible! I hate when people say they're 'due a new phone'. You're not 'due' one as you could always keep the one you've got and save yourself some cash. Now people say the same about cars - that they're due a new one. No one's due anything!!
Ditto!
I financed 50% of my car on HP to improve my credit rating, but I will repay it faster, which should improve it further.
That should enable me to refinance my house at a better rate.
Pivot - FYI repaying a loan early does not necessarily improve your credit rating and can, in fact, harm it with some lenders as they are not seeing the return they anticipated when you took out the loan. That being said I nearly always repay loans early unless they are "interest free".

Tip: if buying on interest free always ask if there is a deal for cash. Most sales people are not aware that they would then have to offer the same deal on interest free.
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Pivot
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Post by Pivot »

VanB wrote:Pivot - FYI repaying a loan early does not necessarily improve your credit rating and can, in fact, harm it with some lenders as they are not seeing the return they anticipated when you took out the loan. That being said I nearly always repay loans early unless they are "interest free".

Tip: if buying on interest free always ask if there is a deal for cash. Most sales people are not aware that they would then have to offer the same deal on interest free.
Darn... here goes my theory legs-up!
Thanks for the tip
Current: 911 Carrera T - PPM9RU51
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PaulB
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Post by PaulB »

Intersting discussion here.

I am 32 years old and typically keep a car 3 years or so. I have never at any point carried any negative equity from one car to the next. My view on PCP is that with a small deposit and a very managable monthly payment, you are able to drive a nice car. At the end, if you can hand the car back and walk away, have you really lost that much?
I don't think i know anyone who buys a car to "keep", unless a classic etc.
Sure, you walk away at the end without the car and have had a few years of payments with nothing to show for it in the end.
Perhaps that is my "younger" view on things but at my stage in life, i can't see me having a "car for life" at the moment.
2015 Macan SD - Carrara White
Pan Roof, PDLS, Sport Design Kit with rear mid section painted, 20inch RS Spyders, PCM/Nav, ACC, Lane Keep Assist, Lane Change Assist, Black Sports Tailpipes etc
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Pivot
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Post by Pivot »

Interesting observation PB, I can see many young people do that. I had a chat with a young footballer the other day and his view was that if he can drive a new premium vehicle every 2 years, without paying penalty for terminating 3 year contract after 2 years, he has not lost any money. Interesting logic, who am I to judge?

I bought my car on HP with 50% deposit, to own it, as the days of new Petrol vehicles are numbered. I am a little old fashioned, but I will enjoy driving a petrol vehicle (from new) in times when all you can buy (new) is alternative energy, whatever that might be. It will be like driving steam engine in the age of diesel locomotives. A bit slower and less refined, but more fun.
Having said that, I plan to switch over to 911, just before flat-six gets outlawed, but in the current world nobody knows what the future holds, so my plan B is Macan S
Current: 911 Carrera T - PPM9RU51
On order: 911 Targa 4S - PPDV8NY4
PaulB
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Post by PaulB »

I look at a cost for motoring in a Porsche thats cost £4-£5k per year as reasonable in relation to earnings. It allows me to continually build my savings, whilst comfortably paying off my mortgage payments, adding to my pension, go holidays and treat my family. At the end, the car goes back and i probably start again but with a newer car. If you don't pay the final balloon payment and you haven't forked out a huge deposit at purchase time but have enjoyed a premium car for a small monthly fee i would say that's a fair deal.
Life is to be enjoyed at the end of the day (although i am a worrier when it comes to money, even more so as we head in to the worst economic crisis in recent times).
2015 Macan SD - Carrara White
Pan Roof, PDLS, Sport Design Kit with rear mid section painted, 20inch RS Spyders, PCM/Nav, ACC, Lane Keep Assist, Lane Change Assist, Black Sports Tailpipes etc
Dan1210
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Post by Dan1210 »

My 2 cents having been round the houses with this...unless you plan to keep the car for a long time why on earth would you want to dump £60-70k into a car? It’s only ever going to lose money. Pay as little deposit as you can to keep monthlies affordable and invest that lump of cash somewhere else.
I look at cars as a monthly cost, I work out what I’m prepared to pay and work back from there, if you buy sensibly you can even have some equity with pcp, currently I have £5000 in my Tiguan rline, which if I take out my original deposit @3k I’m left with £2k. Not bad at all. Look for low apr’s use carwow and haggle further, also deposit contributions.
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kmacuk
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Post by kmacuk »

Here is the strategy I use and my thoughts on PCP.

I hate paying interest, PCP is the worst form of finance if you don’t want to pay too much interest.

I tend to look to borrow over a 4-year period but clear the loan in less than 3 years. I typically look to borrow the anticipated depreciation over 4 years and use year 4 to rebuild a deposit for a replacement plus the fully paid for car as part ex.

When we looked to buy our GTS, we kept options reasonably low (£6k). Total purchase price of our car was £65k. We put in the car plus cash and borrowed £20k over 3 years and it cost just under £1k interest. £583/month.
Our 4-year PCP quote was going to cost £12k (total £77k/£700 ‘ish/month) on interest (£10k deposit), we would have got around £5k cash back from our A4 trade in. I have therefore invested £26k into the car and saved £11k on interest over 4 years. I reasoned I would not yield £11k from investment of the £26k over a 4-year period. If I am lucky my car will be paid by year 3 and be worth £40k. I can now keep it or change it, bit its not costing me any monthly payments for year 4, where depreciation is minimal. 4-year cost of around £550/month for a GTS sounded a good deal for a premium brand.

Initially we were going to go PCP as we would have had to add a big chunk of cash to the pot if we didn’t. I expected to negotiate a discount on the high PCP interest, but this was rejected, and no interest reduction offered under any circumstances. I indicated I would self-finance and was met with "really 85% of our customers buy on PCP" - He pushed the change to new car after 2 years for same payment line and for me logically years 1 and 2 are the worst for depreciation and I am fine with keeping until year 4 at least. If you change every 2 years you have year 1 tax, another round of options to pay and another deposit - this makes no sense to me.

I also hear time and again you should never put cash into a depreciating asset, but I still cant see past my above logic. I also like that I can keep my car or change depending on current circumstances, part ex value and market conditions. I am also comfortable with the GFV risk on a Porsche being good and if its not I will just keep it as I have an £11k buffer to hedge against (less investment returns potential, not good currently with Covid impact).
Arrived March 2020 - Sapphire 2020 GTS (PL17PEQ3)
Dan1210
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Post by Dan1210 »

I had this recently with my dad, he bought a Range Rover for £40k outright. Didn’t make any sense to me, I would rather pay £450-£500 a month than lose £40k in one go but I guess it’s all relative to your situation. You have to manipulate the pcp the best you can, independent lenders will manipulate the apr and gfv if they really want your business. On my upcoming Porsche purchase I got 6.2% which was pretty good I thought.
@kmacuk, I’m a little confused by your post above, you put in your car and borrowed 20k as a private loan? If this is correct you are paying both pcp and the loan?
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kmacuk
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Post by kmacuk »

Dan1210 wrote: Sun Jun 28, 2020 3:34 pm I had this recently with my dad, he bought a Range Rover for £40k outright. Didn’t make any sense to me, I would rather pay £450-£500 a month than lose £40k in one go but I guess it’s all relative to your situation. You have to manipulate the pcp the best you can, independent lenders will manipulate the apr and gfv if they really want your business. On my upcoming Porsche purchase I got 6.2% which was pretty good I thought.
@kmacuk, I’m a little confused by your post above, you put in your car and borrowed 20k as a private loan? If this is correct you are paying both pcp and the loan?
Traded car + cash and remainder as a £20k loan = own car in less than 3 years.
Arrived March 2020 - Sapphire 2020 GTS (PL17PEQ3)
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VanB
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Post by VanB »

There are no rights or wrongs here and you need to factor in how hard your money is working for you if it's invested (assuming you have money invested).

I think the biggest issue with PCP is that you are always paying interest on the balloon (GMFV) and consequently your capital repayments are less than you might think. Also repayments are made on a reducing balance basis so interest is front end loaded on a PCP. There is no doubt that it works for some people but is nevertheless an expensive way to finance a car.

The argument of not sinking cash into a depreciating asset kind of works if you need the security of a GMFV. However, assuming you have the cash why not lend yourself the money? OK so you need £50k for the car and you intend to keep the car for 4 years - lend yourself the £50k at, say 4% interest and make repayments into an account you hold of £1,125 per month. For me this makes an awful lot more sense than paying 6.2% over to a finance company as you are effectively supplying your own HP product.

Maybe a bit simplistic and obviously doesn't work if you don't have the capital to do it.
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Previous: Macan GTS Night Blue
Previous: 981 Cayman S Agate
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