kiwimeat

Been thinking about bringing forward (from 2005) my RX-8 procurement (should never have test driven this week - got the rotary woody bad).

To do this will require some financing for the purchase.

I'm new to the whole car financing deal as I have always bought outright before.

I'll trade my SP20 in - which will still leave me considerably short on a MT + Luxury pack.

Any advice on which is the best way to go in terms of financing would be most welcome.

Some advice, tales of wisdom or woe would be gratefully recieved.

Cheers

Aaron

pricer01

I've been involved in financing and consumer lending for 19 years so hopefully I can provide you with some guidance however, as we live in litigous times, I'd add that you 'should seek independant validation of any recommendations ...

With that out of the way, sadly, there is no simple answer to your question as the right answer is dependent on your situation but I would add that we are in historic low rate environment so locking in a loan at a good rate now will seem a sensational rate in 24 months.

Anyhow, by answering the following questions (PM me if you prefer) I shoul de able to point you in the right direction;

1) Estimate of the amount you need to finance
2) are you interested in low payments or short term loan
3) Are you in a position to borrow through your work with some sort of salary sacrifice / pre tax novation or similar
4) Do you use car for tax deductible purposes
5) have you borrowed before, do you have other personal type debts
6) how old are you/ are you a home / property buyer/ owner
7) do you like beer ... (only kidding but I was on a roll!!)


Rob

Hymee

iTrader: (1)

Rotary Woody - ROFLMAO! It is a pitty the woody pretty much needs to be used in a reciprocating motion.

Beer - another ROFL!

You guys Crack me Up! We need to go the Breakfast Creek hotel where you can really "crack a woody". (XXXX 'off the wood' from real wooden kegs).

Cheers,
Hymee.

Hymee

iTrader: (1)

Back on topic...

Yes - it does depend on your situation, and there is no one correct answer.

Remeber, if you lease, you have to finance the whole amount, so you can't really use your SP20 as a trade. Well you can, but you will end up taking a cheque for it's value. There is another thing they have talked about, and that is using the trade to top-up first year payments, but there are all these rules, and it got too hard for me (oops - there we go again).

For me, I'm on a novated lease with all running costs included. It all comes out of my pre-tax pay, and I pay a fair bit of FBT, but it is not too bad, as I do about 30,000km/year.

Cheers,
Hymee

AMG

From my experience, you do top up payments to reduce your tax bill. You can top up by paying up to one years payements up front (ie 30 June)

With all top ups I've done, lets say a 5 year lease. Top up at onset of lease, still pay me payments as usual for first four years and the fifth year go without paying.

Best to speak to your accountant.

timbo

I'm on a company lease. Got what I think is a pretty good deal through GE Finance @6.75%. But that was in August. I also drive >40K/year for business purposes, so I reckon this car is going to be about the 'cheapest' from a finance perspective that I have had.

I've not looked at the 'top up' payments yet. I think there are limits.

Ageo

Kiwi i am going through a Hire purchase which basically is like a lease but you have no limit to your end balloon as long as the finance company agree's.

Or if its for business or you have an ABN do a Chattle mortgage which is exactly the same but you can recoup all your GST in the 1st 3 months then say over 5 years every quarter (if its a 5 yr term)

Im financing for a $62000 RX8 and the repayments will be $700p/m

Thats a 5 yr term and $40000 end balloon

Let me know if you need a broker to help you out as he would take care of you.

Hymee

iTrader: (1)

For figures sake, mine look like this (for the finance component):

Monthly rental $916, based on 5 years with a $15,072 residual. I would be very cautious about having a $40,000 balloon after 5 years.

Cheers,
Hymee.

Ageo

Hymee have you seen what Rx7's are selling for? 1992 model series 6 with 100,000 clicks on it its about $35000.

For me even if i sell the car for $30 or 35000 ill pay out the rest.

Hymee

iTrader: (1)

Ageo,

I wasn't having a go at you mate, nor on your descisions regarding financing. I truly hope that when I get to the end of my lease, the resale of the RX-8 will be that high. I thought I was cautious / conservative when I did the SS, but when I decided to get out of it into the RX-8, the **** had fallen out of the Commodore market, and I had to go and find 5 grand to pay Mr Finance company to take it off me

Cheers :D
Hymee.

pricer01

Its the classic prisoners dilemma ...

Go for the lower monthly repayment and take the risk of negative equity at the end of the lease

Remove the residual risk by opting for a lower payment at the end of the lease but have the monthly burden of higher installments.

In my many years of financing and refinancing cars , most drama is driven by the car not being worth enough to cover the payout at the end of the lease I never saw someone unhappy by having a low final payment.

But of course, I'm conservative (except for my choice in cars .. he he he he)

AMG

With all my finance arrangements, I either have no residual or a minimum as required by lease arrangements. I figure that you cannot determine where you will be financially in three, four, five etc years time, so a payout figure of many tens of thousands may be an issue. If I can't afford to pay the maximum finance payment, then i can't afford the item!

Ageo

well thats it AMG you would have to choose whats suits your current financial situation.

rx8 - smooth!

A couple of tips that might be of help.

1) Sell your SP20 privately. The car people want to make a profit from this as well so they will offer you a wholesale price so they can retail it themselves for a profit. (If they do not want to retail it themselves they will wholesale to another yard so they can retail it) You will not achieve the same price that a car yard can but you will get a lot more than they will offer you. My last car was a Pajero and I got $3,750 more by doing this! The downside is it is a lot more effort. You need to get the car detailed, advertise, deal with the enquiries and arrange Roadworthys.

2) In my experience the finance deals from the dealers are ALWAYS more expensive than if you arrange the deal yourself. I guess it is a bit like doing the trade in - they work on the fact that it easy to just let them organise it.

Hope this is a help.

Steve

AMG

I knocked off a full percent by using my regular finance co. dealers, I'm sure, get a commission or some incentive for arranging finance.

DALE A BREDE

Dealers get a commision for finance, this is correct. But if the dealer is any good and has the right relationship with the finance company than he sholud be on a better base rate than anyone else anyway.

Dale

jax8

My previous car was with GE Automotive and I organised re-finance with them prior to even walking into a Mazda dealer.Where I ended up buying also used GE, and their finance manager's quote was more than 2% over what I had negotiated (7.15%).

On $70k that's more than jam, that's caviar.

takahashi

You know as a PROFESSIONAL we get better deals.... as lazy doc like us always will have steady income :P

pricer01

Typically dealers offer finance from the company that provides their 'wholesale finance' (that is, the money they borrow to run the dealership and buy the cars from the manufacturer). There are dealer plans that provide for both income in the form of commission and reductions in interest changed on their borrowings.
Typically, its to the dealers advantage to sell higher rate finance but, thats not always the case.
Whilst I agree that dealing direct with a bank can save money, its also true that under pressure, the dealer can actually finance at a lower rate than generally available to public so its all about how much leverage you can use.
Again, the dealer income comes from the margin on the sale itself, a rebate from manufacturer for making sales targets, a commission on the finance, the paint protection and the rustproofing, and margin on all the aftermarket spares. Oh and I nearly forgot the dealer delivery charge.
My advice, know how good a deal you can cut with your bank directly and then cut 50 basis points (1/2 a percent) off and start negotiating with the dealer F&I manager. Dont overlook insurance too remembering they have about 20% commission to play with.
Dont forget to compare fees and charges too

Rob

kiwimeat

Gents (apologies if I missed any ladies replying),

Thanks for all the useful information in the thread and by PM.

The responses I've had are a nice example of the positive and helpful ethos of members I've met here.

Unfortunately due to the 99% likelihood of me seeking a new employer within the next couple of weeks, I'm going to have to postpone any immediate plans to move my RX-8 procurement forward.

Only good news is that I had all four tyres replaced yesterday on the SP20 (definately not the positive news at $195 each - mind you probably cheap compared to RX-8 rubber) by a Beaurepairs crew (Fortitude Valley - ask for Daniel) that knew the SP20 and they fixed a couple of persistant issues for me. Car is handling like a dream (for an SP20 mind you) and I've had it screaming through a couple of corners and somehow found myself climbing a couple of twisty hills locally today. Kids definately enjoyed pickup after school today.

Thanks again for all the useful info and to those of your who offered their assistance I may well take you up on that offer at a more appropriate time.

Cheers

kiwimeat.