Finance advice

[rodga]

hi all

need some help with getting a new car...

lets say i have R150 000 cash, and wanna buy a car of 200k
what are my options to get the other 50k?
do i finance the car as a whole and put down the 150k as a deposit?
can i finance the car as R50000 and pay the dealership the remainder 150k?
take a personal loan? what other options do i have?
which would be better in terms of interest etc?

any advice appreciated, thanks

 

[HapticSimian]

do i finance the car as a whole and put down the 150k as a deposit?
can i finance the car as R50000 and pay the dealership the remainder 150k?

Those are effectively the same thing. Perfectly doable, although you'd likely get a fairly sucky rate financing only R50k. Just don't finance the remaining R50k with a 2nd bond - I wanna slap people who do that.

 

[spiderz]

Just buy a R150k car cash.

 

[ALFAHOLIC]

The guy wants a 200k car...jeez, stick to the topic (like i do lol) I'd say get your 200k car, then they ask you how much deposit you have...but before they do that get them to agree on an interest rate first before you drop the 150k bomb on that...then when they ask the question, you say 150k...they'll keep quiet and say ok, so you only gona finance 50k then...easy. Well that's what I'd try!

 

[rodga]

Just buy a R150k car cash.

my car was written off, paid out by insurance
so i think this would be a perfect time to get a later model / upgrade
as too find one in a similiar condition that i had is proving difficult

 

[rodga]

The guy wants a 200k car...jeez, stick to the topic (like i do lol) I'd say get your 200k car, then they ask you how much deposit you have...but before they do that get them to agree on an interest rate first before you drop the 150k bomb on that...then when they ask the question, you say 150k...they'll keep quiet and say ok, so you only gona finance 50k then...easy. Well that's what I'd try!

lol, wat sort of differences are we looking at for interst on 150k vs 50k?

 

[Slootvreter]

Just buy a R150k car cash.

Oh great. Perfect advice.

 

[ALFAHOLIC]

Well like enigma said...aparently if you buy something for 50k the interest will be higher than for 150k???that's how I understood it...lol

 

[rodga]

Well like enigma said...aparently if you buy something for 50k the interest will be higher than for 150k???that's how I understood it...lol

thats my uinderstanding, but wat sort of difference we lookin at?

 

[ALFAHOLIC]

eish dude its bound to be vast...like I said commit to a pre-agreed interest, then next day hit them with the 150k bomb...they can't say you can't pay 150k at that interest...it was agreed upon in the first place, but i doubt its like that..with finance you ALWAYS come 4th

 

[HapticSimian]

eish dude its bound to be vast...like I said commit to a pre-agreed interest, then next day hit them with the 150k bomb...they can't say you can't pay 150k at that interest...it was agreed upon in the first place, but i doubt its like that..with finance you ALWAYS come 4th

Norrachance. Interest rate is calculated through a combination of your risk profile, amount financed and period of the agreement. Agreeing on terms & then suddenly only wanting to finance a 1/3 of the amount won't fly...

rodga, why not pose the question to your bank? Ask them to give you an estimation on what your instalments would be on a R50k loan, complete a finance application at a dealer & compare.

Thinking about it it, though, I seem to recall something about banks not exactly being receptive for the idea of purchasing a new asset with a personal loan... Anyone else with a bit more knowledge on the ins 'n outs?

 

[HapticSimian]

thats my uinderstanding, but wat sort of difference we lookin at?

TOTAL guesstimate - around prime +1-3% for R150k, prime +4-7% for R50k over the same period...

 

[rodga]

cool thanks
will do that, just wanted to see what other options i have before i go see anyone

 

[dequadin]

I would finance the full 200k putting the minimum deposit (say 10%), this will get you the best possible rate.

Then (as was already said) phone up the vehicle finance company and do a capital reduction of 130K (150K-200K*10%), this will probably leave you owing more than 50K but you'll be paying that back at the original 200K interest rate.

I would then try and save a bit each month (1k-2k) and then pay it off when your savings = the settlement amount. That should take about 2-3 years.

Also very NB in this scenario do not take top-up cover from the finance company/insurance company. You don't need it as you final amount owing to the bank will be rather small (50k-60k)

 

[HapticSimian]

<snip>

You are much more awake than me on this fine Friday...

 

[Gaz{M}]

R50k @ 10% is 1268.13x48. Interest = R10 870

R50k @ 14% is 1366.32x48. Interest = R15 583

So there's about a R5000k saving in the works according to what enigma is saying.

 

[ALFAHOLIC]

Agreed with dequadin..that sounds like a master plan

 

[bboy]

yep, finance whole amout, make sure you can pay extra when u want, lump 150k into account after first month and then the last 50k will be paid off. interest rate will be the best

 

[Riot2]

just make sure that theres no early payment penalty
basically what happens is u make them set up the required paperwork
and they charge admin fees/arrange interest rates with the bank thru them then its a gradual recouping of their costs thru interest over the period
if u suddenly then drop the 150k on them and then ofcourse not expect to pay further interest on it, u screw them out of costs theyve offset vs expected interest income
hence the entire existance of early payment penalties and differing interest rates depending on how much u r financing

 

[PhreakBoy]

I bought a different car 6 weeks ago.

Very similar scenario to yours. When I applied for the low amount of finance the rate offered by most bank was around prime + 2,7%. Then the dealership applied for purchase less 10% deposit to be financed and the rate improved a lot.

I was not comfortable with this option and applied for finance in the middle (50% of the purchase price) and the rate worsened again. I finally settled on this rate of (I think) prime +1,2%.

I phoned Wesbank and they advised that I can pay the extra amount in after the first installment and then request that they capatalise it. Thus reducing the installment, but with the interest rate remaining the same.