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CASH OR CREDIT,SIR?

Discussion in 'United Kingdom' started by tonyh, Feb 17, 2004.

  1. tonyh

    tonyh F1 World Champ
    Lifetime Rossa Owner

    Dec 23, 2002
    14,372
    S W London
    Full Name:
    Tony H
    Interesting article in today's Autocar about buying supercars on finance.
    Example of new 360 M ; min deposit of £10 k , followed by eye-watering £1283 x 4 yrs APR 7.3 %, plus balloon payment !
    Finance "expert" quoted says this is the way smart Ferrari drivers finance their purchase "as they have better ways of making their £100 k work elsewhere....."
    Story ends with great quote "...It's good to know , somehow,that every time you see a new Ferrari there's a fair chance that its driver owes money on it "

    Is this right ? Personally, i have always bought my cars outright, but that's just me.The finance example above does not look too generous to me ....
    just curious how other owners' operate; I'm not after financial details, just getting dialogue going.
    Tony
     
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  3. Andy hls

    Andy hls Formula Junior

    Dec 17, 2003
    653
    Kent UK
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    Andy
    Im with you tony
    Toys should be paid outright, I brought an f/car in 85 on credit and it only lasted 3 months when it went wrong and i couldnt afford to get it back from the gararge and ended up selling it to them losing 8 grand and still owing money on it. a lesson well learnt.
     
  4. kenyon

    kenyon F1 Rookie

    Oct 7, 2002
    2,836
    East Yorkshire
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    Justin Kenyon
    I saved since I was 17 to buy my first Ferrari for my 30th Birthday. I did it.
    I had saved £35,000 for Ferrari and some other bits for it. At the time I did not know what Ferrari model I wanted, just wanted one, the best for that money. I am now 32.

    I worked my way up from old fiats, then alfas, then 430 maserati to my present Ferrari 348 spider. I love Italian cars.
    My everyday car is a £100.00 Proton for work. A great runner.

    Only thing that nearly ruined my achievement. I due to get married a year
    before I bought it. My wife to be, let me put off the wedding for year to get my dream car......

    I would buy a supercar on credit if I could afford the monthly repayments and then sell it after year so and make some money on it. I have baby on the way so that not going to happen yet.


    The editor of Autocar is doing this with the lambo Gallardo.

    Car cost £105,000 from when ordering it.

    Deposit of £30,0000

    Owing £85,000 on and using a balloon payment that cost him £1020.00 per month.

    He plane to resell it next with with current waiting list and market value of £125,000 to buy.

    He has made £20,000 is on year, not bad going.
     
  5. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    I would consider doing that too on a car that has 2 yr waiting list; don't know about on a "normal" model , though.......
    Tony
     
  6. Doody

    Doody F1 Veteran

    Nov 16, 2001
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    methinks that editor is in for a rude awakening on gallardo values downstream.....

    doody.
     
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  8. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    He'll probably get away with a decent profit because the Gallardo is as rare as hen's teeth in the UK....Not sure if it'll be £20 k , though.
    Tony
     
  9. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    Doody,
    do you know what Gallardo list price is ,pls? Just checked official UK Lambo website and they have 2 manuals @ £135 k and 3 e-gear @ £245k....
    Tony
     
  10. Robertb

    Robertb Formula 3

    Nov 19, 2003
    1,330
    South Oxfordshire, U
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    Robert
    Nothing wrong with credit IMO- Seize the day, and all that. The point it that a lot of people can afford the monthly payment, but not many can lay their hands on a big lump sum to buy the car.

    I financed, and left my cash in equities (and fixed interest, Tony!). I think I'm ahead at the moment...

    No doubt there is an appeal to owning something outright as you never know what's around the corner, but my view is that the car can always be sold if things get tight.

    If Autocar's ed can clear £20k on the Lambo, then he's done well; A relatively ordinary bloke owns a Lamborghini. Even if he makes a £20k loss, he's done better in % terms than if he'd run a big Jag or somesuch. And he's driven the Gallardo for a year which will have been fun, I'm sure.
     
  11. noony

    noony F1 Veteran

    Nov 25, 2003
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    Seoul
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    Johnathan
    You mean £145k right?
     
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  13. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    Yep, typo.£145K
     
  14. Ade

    Ade Formula 3

    Jan 31, 2004
    2,095
    UK
    I've got some experience both sides now. I bought my Porsche boxster with a minimal deposit and borrowed as much as possible 3 years ago. Things got really tight (lost Job, miscalculated repayments, insurance went up ..sigh) and I was very nearly forced to sell. I hated that feeling cause I knew I stood to lose about 12K (over 14 months on a 36K-new car!) for a quick sale. That was the best offer I could get...

    I rode out the storm(just), started working for myself with no job security and COMPLETELY changed my attitude towards finance(mainly due to fear!!). I held out to get a better price on the porsche, saved up for the 355, and now I see it as an investment rather than a liability.

    So I've kind of learn't several lessons (generally speaking - but I guess there are exceptions)
    1)I wouldn't buy a new mass-produced car anymore (only second hand).
    2)If I get another Porsche, get Air conditioning and Leather as options!!
    3)Only buy what I can currently afford - continue dreaming about the rest and work hard for it.

    I guess if other people have good job security and other assets to cash-in if they run into trouble, then finance is an option that could work.

    I'd be very surprised if MOST people use finance... performance cars can breakdown with horrific bills.. what then?

    Ade
     
  15. dm_n_stuff

    dm_n_stuff Global Moderator
    Global Moderator Lifetime Rossa Owner

    Dec 10, 2003
    35,563
    The Sunshine State
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    Dave
    Bought three over the last ten years, paid cash for all and held a 25% reserve for fixes. Turned out ok on the two Porsches, but the Dino will probably be a little over the top.

    (Have to add, no purchase has been over $75K US)

    I guess I don't feel the pain of waiting for a car to come back from a restoration or repair if it's already "paid for". No monthy check to write to remind me how much I'm paying not to have the car.

    But, under the right circumstance, I'd probably finance a portion of the purchase. I.E., extremely low rate, or deal on a car I can't pass up that I'm a little cash tight for. Just haven't had that happen yet.

    Although I did finance the Land Rover, as the rate from Ford was very low, (Under 3% for 5 years) and figured I could make more on the cash myself.

    Dave M.
     
  16. Robbo

    Robbo Karting

    Feb 16, 2004
    102
    Pay outright if possible, unless you can use your lump sum to invest in a package that gives you a higher return than the bank interest rate does. Credit MAY only work on cars that are highly sought after at that time. The Gallardo will come tumbling down, audi under the skin.
     
  17. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    That's the key;invest your £ in an asset that will generate a profit over and above what you're paying out on. Can't see many short term investments bringing in 7.3 %APR on new price of 360 M , especially when servicing and depreciation are factored in.
    Tony
     
  18. simon355

    simon355 Formula Junior

    Nov 23, 2003
    649
    W.Yorkshire, UK.
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    Simon George
    I would dearly love to be able to afford to have paid for my 355 Spider outright.However,it came down to 2 choices.I either finance it over 3 yrs at a fairly competitive interest rate or I don't buy a Ferrari full stop.I suspect this is the predicament a lot of Ferrari aspiring owners find themselves in.For me there was no contest.Ok I pay the interest and pay a grand a month but my dreams in the garage every time I open the door.
    I'm working on changing it for a Murcielago in September.Big leap I know.Its gonna cost £150k.Deposit £37k.Payments of £1500 a month and a 60k or so balloon.I know everybody will think i'm crazy,but it comes down to prioritys in life.My biggest is to get my paws on one of those.Interest? I say f***k it.I live for today.I'm a property developer and I can try and justify it all day by trying to figure that the 150k will get me a better return and thats why i'm financing the car.But,i'm only kidding meself!! So financing to me is a necessery evil,but its gotta be done! Then i'll move the bed into the garage and the girlfriend will be history.
     
  19. tonyh

    tonyh F1 World Champ
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    Dec 23, 2002
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    Simon,
    Like your style and honesty! It's not for me but i see the attraction !!
    Tony
     
  20. simon355

    simon355 Formula Junior

    Nov 23, 2003
    649
    W.Yorkshire, UK.
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    Simon George
    Thanks! To be honest i'd prefer an F40 but no finance company will take a 14 yr old car on,not with a balloon anyway!!
     
  21. RAY430RED

    RAY430RED Formula 3

    Nov 1, 2003
    1,112
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    Ray F
    Does that mean you will be joining the Lamborghini Owners Club ?Do they give away free tea and coffee at meetings ?

    RAY 360m
     
  22. kenyon

    kenyon F1 Rookie

    Oct 7, 2002
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    Ray nice about the Tea and Coffee... No more said.....

    Simon,
    Nice to hear your getting a Lambo. Is the servicing higher on murci then on F355. Dont the Lambos have chains instead of belts ????

    Do you not like the Garlardo, or 360 spider ?? Can you not get a F40 ????T thought a F40 would be a good invest for credit company...
     
  23. kenyon

    kenyon F1 Rookie

    Oct 7, 2002
    2,836
    East Yorkshire
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    Justin Kenyon
    Simon, I thought you always wanted a Diablo SV as well... Cheapest from you selection...
     
  24. simon355

    simon355 Formula Junior

    Nov 23, 2003
    649
    W.Yorkshire, UK.
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    Simon George
    Oh dear,seems I touched a raw nerve there.They do as a matter of fact.Plus you get bacon sarnies with loads of tomato ketchup.Better than canapes and bloody champers
     
  25. simon355

    simon355 Formula Junior

    Nov 23, 2003
    649
    W.Yorkshire, UK.
    Full Name:
    Simon George
    Don't get me wrong,Ferrari's have always been a lifelong passion,but I have to experience a Lambo Murci,even if its for just for a while.I fully admit it won't be easy affording it,the servicing is a lot more etc.But as I said before,you only live once..When it happens,any bird will have to make do with KFC
     
  26. simon355

    simon355 Formula Junior

    Nov 23, 2003
    649
    W.Yorkshire, UK.
    Full Name:
    Simon George

    I love the SV's.Best Lambo around for £80k.The 6.0ltr is a massively better car though but a big jump to about £115/120.Its a different owning experience I suspect.The 355 gets used almost daily in all weathers.Can't see a Lambo coming out in the snow.The biggest problem is the huge deprieciation which is why if you're gonna go for 1 then you may as well push the boat out and go for the big one ie a Murci.I've a feeling the price gulf will widen between the Murci and the Diablo too.
     

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