Crazy new car "specials"

[dlk001]

I heard this on radio and initially thought it was a mistake. Sounds crazy to buy a car now and start payment in 2015

Get your Audi A4 1.8T from McCarthy Audi today and only pay your first instalment in January 2015.

http://www.audimenlyn.co.za/za_partner/p_audi_centre_menlyn/en_home/Offers/audi_a4_offer.html

 

[MKFrost]

Would like to see the terms and conditions for that deal

 

[xrapidx]

You probably pay interest.... So by then you owe a couple of thousand more

 

[Brawler]

Why would one want to do that?

 

[Dolby]

I'd save R50,000.00 on not paying my current car instalments in that time if I took this deal ...

 

[Ancalagon]

They tell you that terms and conditions apply, but not what those terms and conditions are. Lame.

But you have to ask yourself - whats in it for them? 8 months interest free is a lot of interest that the bank is throwing away. Why would they do that? Unless of course they are not throwing the interest away, and you will pay for it eventually, which is far more likely.

 

[Dolby]

... but it won't R50,000 interest in 8 months.

There's some other trick.

 

[Brawler]

Maybe this CBC Crystal Weiss has gone straight to my head but I must be missing something.

Isn't it just the regular old HP but payment starts a few months later? You will still pay the original 60 months or whatever?

 

[dlk001]

They tell you that terms and conditions apply, but not what those terms and conditions are. Lame..

I wish they gave the terms and conditions indeed.

Another deal is "Drive a BMW 335i From R7 899 p/m and return it 54 months later. Price R 621 027, 10% deposit, 7.03 interest rate, 54 months, R275 000 future value, Total cost R761 106.

My question is what will be the difference
- one a person buys the BMW, no deposit, normal installment, trade in the car after 54months versus
- paying lower installment and give back the car in after 54months. I assume both instances, the future value of the car will be the same?

 

[SauRoNZA]

I'd save R50,000.00 on not paying my current car instalments in that time if I took this deal ...

You aren't skipping the payments, just delaying them.

 

[Brawler]

Thats what I thought. Seems like a terrible idea all round. Another way to catch the foolish.

 

[BouncyNinja]

Paying 2015 prices for a 2014 car?

 

[xrapidx]

They tell you that terms and conditions apply, but not what those terms and conditions are. Lame.

But you have to ask yourself - whats in it for them? 8 months interest free is a lot of interest that the bank is throwing away. Why would they do that? Unless of course they are not throwing the interest away, and you will pay for it eventually, which is far more likely.

Where's it say interest free? You will be paying interest for 8 months.

 

[Chevron]

I wish they gave the terms and conditions indeed.

Another deal is "Drive a BMW 335i From R7 899 p/m and return it 54 months later. Price R 621 027, 10% deposit, 7.03 interest rate, 54 months, R275 000 future value, Total cost R761 106.

My question is what will be the difference
- one a person buys the BMW, no deposit, normal installment, trade in the car after 54months versus
- paying lower installment and give back the car in after 54months. I assume both instances, the future value of the car will be the same?

That sounds like a balloon payment deal. Hence the "return it" thing.

You aren't skipping the payments, just delaying them.

I think he knows. That amount is what he would have paid on his current car. Meaning he can use that cash for something else or pay it into the car when the payments start.

 

[akescpt]

BMW prefers to residual value as 'future value'.

 

[xrapidx]

There's a difference between residual and balloon though. The one you can choose to pay (or return vehicle), the other you have to pay. I.e the future value is your risk vs. banks risk.

 

[Saba'a]

Banks dont offer residual value easily anymore because of last financial crunch.

 

[Fazda]

There's a difference between residual and balloon though. The one you can choose to pay (or return vehicle), the other you have to pay. I.e the future value is your risk vs. banks risk.

A proper residual can only be taken out on a car that is going to be used as a company car where tax deductions can be made. Balloon is what the man in the street ends up getting - not a great idea.

Banks dont offer residual value easily anymore because of last financial crunch.

As I said above, a true residual deal is usually done by a professional person who is using his car for work, and who can claim back payments via the Tax man. That doesn't mean that anyone else cannot apply - in effect on a true residual deal, you can ask the bank to take the car back after a specific period, and the banks hate that, as it then becomes their problem.

 

[Dolby]

Ok I phoned and vaguely understand :

You need to finance inhouse and the standard installment is around R6,000.00pm on the base car - depending on your rating and interest rate etc. The contract is a standard contract and month 1 starts when you buy the car like normal.

The difference come in that they deposit a lumpsome (R40,000) in your account at the same time which mean you get 6-8 months 'free' installment sfrom that money.

I think.

 

[Fazda]

I went on a Financial course a couple of years back, where the guy ( Stannic) basically said that you are actually going to pay the bill anyway.

You can appear to have 6 or whatever number of months for "free" but nothing is for free! They will get their money, either in extending the payments by another 6 months or tacking on some balloon - Steer clear!!