New Car Financing

[docballs]

I hope this topic is OK - I'm sure Corey-R will tell me if not.
I like many here am anxiously waiting delivery of my new R
Sweaty palms and palpitations notwithstanding, I realized I should start running around to find the best finance packages available at present .
Was wondering what others are doing?
I was quoted on the following 3 CHP options:
36 months with 30% residual
48 months with 40% residual
48 months with 45% residual
Rate was around 9.5%
I know everyones situation will be different but my preferred option has been to change cars every 4-5 years ( usually corresponding with the model cycles anyway )
How many quotes do most people seek?

Was also quoted on a new additional cover known as GAP COVER.This was a one off amount paid at the start of the financing period.
This is to cover the difference in value between the depreciated value and the new car value should the car be written off in the event of an accident during the Lease/CHP period.
I thought this would be covered if you took out an Agreed value policy rather than Current Market value policy.
I have never been "offered" this option before when financing cars.

[pologti18t]

Take the lowest residual over the 48months.

Are you leasing? Salary sacrifice? Can you finance it on top of an existing home loan at a lower rate?

[triode12]

My advice is to do your sums. Don't look at one one or two figures (e.g. interest rate) but look at the loan holistically.

I would stay away from dealer finance. Been there done that. This is where they make their money. Don't get sucked into one.

Check out the car loans offered by Credit Unions. Their interest rates might be higher on initial inspection but if you do your sums, you will see that they are cheaper over the life of the loan. And they usually don't slug you with early exit/payout fees.

Also putting the car loan onto your home loan may not be the best thing to do. Some loans calculate and charge you the interest upfront so you end up paying the interest regardless of whether you pay the loan off sooner (so 30yrs x principal x rate). You might end up paying more interest, what might be a good idea ( having a lower interest rate) will look different once you have done your sums.

[ravun]

Best to research all options available to you. There are a few comparison web sites out there to help.

Compare Car Loans - Search, compare & apply online | InfoChoice

[Corey_R]

I hope this topic is OK - I'm sure Corey-R will tell me if not.

It's not
Moving to General Discussion. Cheers

[The_Hawk]

I have had 'Gap Cover' before. The idea is that for a fee they will cover any shortfall in the balance owing and the value of the car if it's written off at any time during the loan period but you are required to have full comprehensive insurance (maybe with an "approved" insurance company too).

In our case we were young and it seemed like a good idea at the time. Consider what the market value of a 4/5 year old vehicle is now and see if that is more than the residual your aiming at, if not, maybe it's worth getting. In reality as long as you have an agreed value of at least what you owe it's all good (or if the market value is higher than your balance) and you don't need the gap cover.

Are you salary sacrificing? If not it's definately worth looking into.

[hooba]

Take a good look at the fine print of what gap cover offers, and be clear about what you are buying. What you want it to cover is the entire balance owning on the car, depending on your agreement this is most likely all of the payments (yes the interest for the entire term of the agreement even though your car might have been written off in the 1st month) outstanding. I trust you are going with CHP for a reason or have at least discussed it with your accountant.

I agree with go with the lowest residual to play it safe. As for the interest rate, ignore that as it doesn't take into account fees which come in a variety of forms (one off up front, monthly etc). Best way to price compare is to find out the payments and fees, multiply them by the number of times you have to pay it. Assuming you are using the same residual, then whatever comes out cheaper in your calculations is what you are after.

[docballs]

It's not
Moving to General Discussion. Cheers

Thanks - I'll know for next time

[docballs]

Take a good look at the fine print of what gap cover offers, and be clear about what you are buying. What you want it to cover is the entire balance owning on the car, depending on your agreement this is most likely all of the payments (yes the interest for the entire term of the agreement even though your car might have been written off in the 1st month) outstanding. I trust you are going with CHP for a reason or have at least discussed it with your accountant.

I agree with go with the lowest residual to play it safe. As for the interest rate, ignore that as it doesn't take into account fees which come in a variety of forms (one off up front, monthly etc). Best way to price compare is to find out the payments and fees, multiply them by the number of times you have to pay it. Assuming you are using the same residual, then whatever comes out cheaper in your calculations is what you are after.

I had thought along similar line and agree the lower the residual the less likely to get caught out at time of car disposal.
Accountant said CHP was preferred option for my set-up
Still not convinced about value of GAP Cover but will do my figures about comprehensive insurance and agreed values.
I'm sure the R will retain good value over the 4 year period

[docballs]

Thanks Hawk,
Accountant still says CHP is best for me - salary sacrificing not an option