Finance Option Queries
 

Hello,

I am interested in purchasing an RX8 but am not sure if I should go for new or used.

From what I have gathered by searching on here it looks like there is little or no difference between the 2003 and 2006 model RX8's.

The problem I have however I do not want to spend so much on this car that it costs me too much.

How much are most of you paying a month for your RX8? If any of you could help and give me some options that would be appreciated.

Would a balloon be a good idea on this car?

Step 1, find out the cost of used RX-8.
Step 2, find out the cost of new RX-8.
Step 3, take that to a bank, finance company and ask them what repayments would be.

Different bank, lenders will have different rates depending on a range of criteria such as length of loan/lease, secured or unsecured (secured by the vehicle).

Cheers

Andrew

Pay for it up front (possibly reconsider if its a company car). Effectively borrowing (hence paying interest) to purchase a depeciating asset is not the best financial approach. Then again the fun factors can make it worth while.

true, that would be the best option but for someone only earning 40k it is not the best option :p

Agree its harder but far from impossible - good second hand samples might be the best best to atleast limit your cost exposure. There are many more 3 year old samples coming onto the market and at about 1/2 or slightly more of the new price price your at a good starting point. In anycase, I am sure you will enjoy your ride - I sure do.

Finance structure depends on a few things.

Can you claim any of it as a tax deduction?
How many km do you do a year?
How long do you want to keep it?

Paying up front is actually the worst way to finance a car.

Consider that over the last year the stock market has risen nearly 20% and property trusts can get you about 12% pre tax.

The 50k you would invest in an RX8 would be the 20% equity you would need to buy an investment unit worth $250000.

A quick and very rough run through a spreadsheet (I didn't allow for daily compound interest) shows that that 50k invested at 20% versus 8% interest will be worth $42000 after 5 years after making $10400 in payments each year (assuming a $20000 balloon at the end - the estimated value of the vehicle) That leaves you a spectacular $22000 better off. At 12% return you are $5500 better off.

Finally if you buy a property that is neutral gain that gets the average 7% capital gain for 5 years you gain $77000 which pays for the car plus interest with a couple of thousand left over.

Long winded but the reason why I finance my cars.

Apart from 3 years unlimited klm warranty that is.

Re: finance options.

The asset (car) is depreciating in value from the moment you take possession irrespective of how you finance it or whether it is new or second hand.

Paying cash up front may save interest charges however is this good use of your cash i.e.: can that cash earn more for you invested elswhere?

Leasing puts you in the seat of car at a significantly lower monthly cost than purchasing outright. It comes at a cost when the lease expires (i.e: the residual). This is the amount that you have to come up with to keep the car at the end of the lease. Even if you decide to trade or sell it at the end of the lease you still need to pay the residual. The gamble you take when leasing is that the 2nd hand value of your car at the end of the lease is worth more than the residual. Anything in excess is yours (but classed as income from a tax perspective), if it is less then you still need to pay the difference. If your income and annual klm and you can novate the lease then this is an attractive way of putting your seat in a car that you otherwise might not be able to afford.

A personal loan secure or unsecured will give you the option of saving on interest if you pay it off early as it is generally calculated on monthy balances.

A hire purchase loan is probably the least desirable approach as the total interest is generally calculated at the time of taking out the loan and you will save nothing if you pay it out early.

There are probably a dozen other ways out there to fund you car. The main this is to do your research and understand what you are committing to before signing on the dotted line and seriously ask yourself "Can I afford this (Today, if i lose my job etc.).

Lastly understand what it costs to service, insure and feed as this in in addition to your monthly payment.

Good luck with your decision. If you go ahead and buy an RX8 enjoy it.


Cheers.... Otto

if ur worried about financing it with 40k income
have u considered that the rx8 likes a lot of petrol and oil and the maintenance that goes with it?

Do you use your car for work?

I agree ... if you're on $40k you should probably think twice about getting it.

(a) Petrol ... $70-80 gets you 400kms on average
(b) Maintenance is comparitively cheap, cheaper when you start doing stuff yourself
(c) Insurance ... isn't too bad, but expect a premium of $1500+ on average
(d) Repayments ... the car's going to be worth about $30-40k ... so your lease/chp repayments will be in the $600-900 mark
(e) So, lets do the math for you:

Your monthly expenditure will look something like this

Finance................................$900
Operating Costs..................$600
Total Cost..........................$1400

And taking into account that you earn $40k a year, so in effect you have $32k in hand after tax.

Net Salary........................$32000
Motor Vehicle Cost...........$16800
Cash Remaining...............$15200

If you salary package on your salary you will be worse off unless you do a split deduction ... in which case you'll end up slightly worse off. Much better to do a hire purchase from what I can see, because at the end of the year if you use it for work, you can claim back the percentage of business use in your tax return.

Does that sound about right Kall?

Based on your salary I would recommend used, and theres nothing wrong with that as ive just done it.

Cromax your operating costs seems a little high to me but ive only had my car 2 months so ill wait and see :)

The benefits of living in the country.

I have only had the car for just over a week but I have filled the tank 3 times at $50-$55 done 1450km and still have half a tank left. I seem to be getting 12l/100km and I am not driving for economy. Less fuel than the old Holden V8.

Insurance is around $800 a year too.

Watch out when you finance that there are no penalties for early payout. You may decide to sell the vehicle and you don't want to get slugged $1000 for your efforts.

hey dont get me wrong, not saying 40k salary isnt enough. but hes saying hes worried, hes more concerned about the loan but hasnt taken into consideration the expenses that come after. yes insurance especially, not sure on his age but im guessin hes quite young. doesnt matter how old the car will be he purchases but his age and gender (im guessin male) insurance will be excessive, after that comes the purchase of new tyres (when time comes) and we know thats not cheap. Petrol will be between $65-70 if u do city driving.

as for business usage. You are very limited to wat deductions u can make if you are an employee...... unless u travel from 1 work place to another FOR work and your employer knows this, thats different scenario. But claiming excessive percentages when you dont really use the car for work.....

RJT, cromax estimates are based on Melbourne, I think QLD is a lil cheaper? lol fact most of us do city driving also.

Puttin all aside, i dont think fact you earn "only" 40k is low. I think its manageable, course.. if u live at home and dont have many other expenses.. lol First look at some used models. and then figure out how much you want to borrow form bank. My advice would be go to the bank you do all your banking with, as they would have all your history. Find out wat options they can offer you first.

I personally do not believe in balloon value IF you plan on keeping the car more then 3 yrs (as most finances are 3 yr term) People who get those loans generally do not plan on keeping car more then the term and therefore sell the car and pay of the balloon value.

But seriously just look at the used market, id suggest perhaps a 2004-05 model at least you get "some" warranty.

which state are you from??

Hi MissyK

I am male and 24 years old. at the moment i have a hyundai tiburon and it has a 55 litre fuel tank which costs me about $55-65 a week to fill up and i do about 460k's in it per week. So that is close to the RX8.

I have found this which i am going to test drive tomorrow. it is a 2003 RX8 black.
Link on Carsales. (removed as link is too long, search carsales used cars in WA)

It is $38990. I do not think I will go for new as I believe that you are paying $20k extra for yes a new car but a warranty too.

This place that is selling the car offers a 3 year warranty on used cars too at no extra cost.

wow sounds like a good deal then

the km's look decent aswell. i bet u could prob negotiate the price a little lower.......

its good the place offers warranty on used cars!

i guess ur in WA - shame! if u were in vic u could have joined us this weekend on cruise haha

i think ur insurance will be similar to wat ur payin for the tiburon. the rx8 has 61litre tank, so it be a little bit more so my guess $65-70 sounds rite.

let us know how the test drive goes - and try bump the price down a bit more....

I am assuming that's the non leather pack?

If thats the case, knock down the price A LOT. Cos you can easily get a leather pack for that price without even bargaining.

i have fallen for the rx8 now and although i probably should not get it i think i might, just might make the finances a little tight.

although saying that i only like it in black...strange haha

Apparantly this does have the leather pack but I will find out when I go there tomorrow.

Also gotta look out to see if it has been in any crashes etc and check for scratches. All the same issues with buying used i guess.

To get a perspective on price;

A Sydney dealer 2 weeks ago advertised a demonstrator leather + sunroof 130km 52990 drive away in the newspaper.
1 week after I had bought mine without the sunroof.
Ah well I saved a trip to Sydney.

Expect the resale to drop over the next 12 months as the effects of Mazda's price cuts start to kick in.
39990 is 75% retained value after 3 years.
I would definitely push a little harder.

This 1s done less kms and price is similar

link

If you lookin at 40k mark

this ones only done 21000km and 2004 model

link

and dont knock the red :eyetwitch

it can be quite nice too

im so going to get this for the rx8 too.

http://www.gtautostyle.com/mazda/mazda_rx8.php

is that replica
im assuming by the prices

if u want it i can get it for u better price lol

do you have msn missyk?

would be easier than talking on the forum, im rkid001@ii.net if you do

To get a perspective on price;

A Sydney dealer 2 weeks ago advertised a demonstrator leather + sunroof 130km 52990 drive away in the newspaper.
1 week after I had bought mine without the sunroof.
Ah well I saved a trip to Sydney.

Expect the resale to drop over the next 12 months as the effects of Mazda's price cuts start to kick in.
39990 is 75% retained value after 3 years.
I would definitely push a little harder.