Rennteam 2.0 - EN - Forum - Financing a new 997 - Page1

May 31, 2006 3:41:33 PM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006

Financing a new 997

Newbie here, hiya everyone.

Well having spent a week at the Nurburgring in my RS6 I have decided to get a real driving experience and go for a 997. The RS6 is epic fun, but it excerts too much control and limits on the driving that I don't feel involved enough.

Anyway, decided on a GT3.

My question is for UK owners and their experience of financing the purchases.

Is this overall plan flawed?

Purchase price Pounds80-88k (dependand on PCCB)
Deposit Pounds10k
Residual after 3 years Pounds50k

Therefore only financing Pounds20-28k????

Seems to good? Is the residual value too high?

I haven't approached a dealer yet as I want to be a bit more informed about Porsche finance before I do.

Is the above about right and/or what are your overall experiences with Porsche finance?

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May 31, 2006 3:52:07 PM

throt: Rennteam VIP; Loc: London , United Kingdom; Posts: 6088, Gallery; Registered on: May 9, 2005; Reply to: rs666

Re: Financing a new 997

Residuals work out around a loss of 700 ( gbp ) a month ..

So ,,

36 x 700 = a 25,200 residual , so a 3yr old GT3 worth around Pounds50,000 would be about right . Also when working out residuals , forget about options , just work on the list price of the vehicle before your personal spec...

Thats what I figure , anyone else..

throt...

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May 31, 2006 3:59:00 PM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006; Reply to: throt

Re: Financing a new 997

Thanks Throt, thats a positive and helpful start.

Mindful of the fact that money is not a generally public discussion public, I'd appreciate any PM'd advise too

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May 31, 2006 5:13:10 PM

AshD: Junior; Loc:; Posts: 53, Gallery; Registered on: Jun 18, 2004; Reply to: rs666

Re: Financing a new 997

rs666

My experience (based in UK too) is that Porsche will typically give you a figure of 50% as 3 yr value, on the basis that there is a delta between what you owe and the value of the car to take forward as a deposit on your next one (turbo i presume

!)

Also, don't forget from a finance perspective you won't just be paying the difference between residual and list minus deposit. You'll also be paying interest on the residual value for the period too - sorry if i'm stating the bleeding on this.

I picked up my 997 C2S 3 weeks ago and financed through Porsche, if you want more specific details PM me.

Ash

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May 31, 2006 6:28:13 PM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006; Reply to: AshD

Re: Financing a new 997

Thanks Ash, no you are not stating the bleeding....either that or I am not as clued up as I thought. I usually buy my cars, so the financing thang has in the past been minor/green on my part, hence wanting to get this one right.

So you'd be paying circa 8-10% on Pounds50k for the 3 year period?

And the 50% valuation seems somewhat sceptical. Current 996 4S's and GT3's are holding up better than that. So it that valuation used to up their margins on the finance?

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May 31, 2006 6:47:59 PM

throt: Rennteam VIP; Loc: London , United Kingdom; Posts: 6088, Gallery; Registered on: May 9, 2005; Reply to: rs666

Re: Financing a new 997

@ AshD,,

On rs666's stats and my math , there is no way a dealer is going to give him a 50% valuation on his car then cover the remaining balance/debt and then STILL have some kind of refund to play with , if rs666 is just returning the vehicle and walking away .. They will give you and back the 50% valuation if rs is part exchanging up and then he will also have a deposit still there as well..Giving the car back straight and just walking away may mean from the outset a Pounds20,000 deposit needed to cover the remaining agreed debt , but this is where the business games come into play , people dont want to walk away becuase of the major loss in funds , thus , buying into another deal . Myself never entered these deals but I am sure this to be workings ,, correct ?? ..

throt...

Edit add :: Sorry rs666 , just done one serious edit on the above , I think thats more accurate...

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May 31, 2006 7:12:27 PM

SonOfStig: Pilot; Loc: United Kingdom; Posts: 387, Gallery; Registered on: May 28, 2005; Reply to: throt

Re: Financing a new 997

Everyone here pretty much consistent with my experience. I think Porsche Finance assume residual value of ~50%of value in 3rd year and ~45% at end of 4th. Theoretically you should basically get yr deposit back whenever you hand the car back (as I think Throt said). Negotiate hard on the repayment (interest) rate though - you will do better than you may expect (I was a bit too soft but worked on them a little & got a decent deal nonetheless).

Also the Porsche financing scheme is slightly better than some others in that it is a "balanced payment" scheme: you pay the same amount of interest and capital in each month that the deal is on - so you are always paying off some capital, even in the 1st month, unlike other schemes. I suggest whatever you do, you go for a 4 year deal - resulting in lower repayments - but there may less likelihood you will get all your deposit back.

Finally, from reading other threads, I have heard good things about the BMW financing scheme - I gather they offer more competitive rates in particular - and you can finance your P-Car through them (?!).

All the best with it,

SoS.

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May 31, 2006 7:30:10 PM

throt: Rennteam VIP; Loc: London , United Kingdom; Posts: 6088, Gallery; Registered on: May 9, 2005; Reply to: SonOfStig

Re: Financing a new 997

Your right SOS , I think someone on here got a 2% interest rate deal , which to say the least is very good...It may well have been with BMW ? ..

throt..

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May 31, 2006 8:31:42 PM

AshD: Junior; Loc:; Posts: 53, Gallery; Registered on: Jun 18, 2004; Reply to: rs666

Re: Financing a new 997

Throt,

Apologies, but really don't know what you're saying...but what SOS states is an expansion of my less than lucid explanation - to be specific i can tell you as follows:

- i did the Porsche balanced payment route
- after three years (as i and SOS stated), they give you a nomnial figure that the car will then be worth 50% of the value @ 10k miles / annum
- as rs666 states the value will be higher than that, i.e. Porsche are being conservative with 50%, what it means is you have some cash to play with - i.e. sell the car and pocket the difference between sale and 50% o/s amount, or carry over as a deposit on a new car
- you make repayements based on paying the difference off between the list price, less initial deposit and the 50% valuation.
- as before repayments are also based on interest only component of the 50% valuation

On the interest rate I think you were referring to someone who used BMW finance to finance his Porsche. You can absolutely do this as these 'branded' finance houses are generally operated by the same underlying finance company (i know this since i used to work at one) The staff phone greeting - 'hello <enter car brand name> finance' - based on the number called. Hence they often will finance other cars. I also remember the thread where this was mentioned - as I started it! - it wasn't 2% he got, but 1.5% *over* base rate.

Typically Porsche finance will quote 3% over base rate, but you can negotiate them down, which i did.

Also on balanced payments, the re-payment can change month-to-month based on base rate changes. BUT the advantage is that you can pay additional chunks off as and when you want, i.e. bonuses, etc. and o/s repayments are then adjusted appropriately.

Finance deals that are fixed repayments are often subject to early repayment penalties, that are legally capped by the consumer credit act, but are still quite high.

res666 (or others) - if you want exact details on my purchase using this, i.e. list price, deposit, amount, percentage, repayments, etc. then PM me - happy to share.

Ash

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May 31, 2006 9:38:30 PM

throt: Rennteam VIP; Loc: London , United Kingdom; Posts: 6088, Gallery; Registered on: May 9, 2005; Reply to: AshD

Re: Financing a new 997

Ref((Purchase price Pounds80-88k (dependand on PCCB)
Deposit Pounds10k
Residual after 3 years Pounds50k

Therefore only financing Pounds20-28k????REF))

Hi Ash ,

You know more than me thats for sure , I did just the simple math..

GT3 with the must have PCCB'S comes out at what Pounds85,500 , now 50% after 3 yrs = Pounds42,750 , of course all approx's..Now surely with ref to the above , it does not cover the final balance of approx Pounds50,000 , specially just handing the vehcle back and walking away . Would the part-ex make that much difference ?..

That was my thinking anyway , and also , surely everyone should get the 3 yr residual deal written on paper to cover ones bum , got to be a good idea..

throt..

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May 31, 2006 11:13:18 PM

SciFrog: Rennteam VIP; Loc: USA , United States; Posts: 9870, Gallery; Registered on: Nov 15, 2005; Reply to: throt

Re: Financing a new 997

To be clear, you pay interest on the whole price of the car out of the door (minus the deposit). Sorry but no free money...

PS: I am amazed how sometimes people who can afford these cars (ie makes good chunk) know so little about money.

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Jun 1, 2006 6:33:05 AM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006; Reply to: SciFrog

Re: Financing a new 997

And why your input is even more valued SciFrog

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Jun 1, 2006 6:45:50 AM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006; Reply to: rs666

Re: Financing a new 997

Throt I think your logic is right. It will mean a bigger deposit to keep the monthly payments down or finance Pounds30k and have a higher monthly payment.

Not too bothered about making up deposit on the next car as I tend to change my cars regularly and cars are not investments, just luxury items and money spent on grins, spins and general larking about

On the other hand I like the idea of a flexible finance agreement. I own my company and regularly have opportunities to make lump sum payments. This would change the ownership strategy though, I am not looking to own the car at the end of the agreement. So looking at it more like a contract hire, and will move on to another car within or at the end of the agreement.

Will pop along to my local Porsche dealer today and see what they can come up with.

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Jun 4, 2006 7:53:05 AM

rs666: Newbie; Loc: UK; Posts: 7, Gallery; Registered on: May 29, 2006; Reply to: rs666

Re: Financing a new 997

Spoke to Porsche, they said 50% residual after 3 years. Strange though the salesman seemed confident the it would be more than 50%, but finance manager said not. Reckon there is some negotiation to had there.

Anyway without haggling around rates if you put the minimum deposit in, Pounds10k, and finance the rest its approx. Pounds1100/month over 3 years or Pounds950/month over 4 years with a 45% residual.

So uping the deposit amount is required imo. So over to my accountant....

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Jun 4, 2006 8:46:31 AM

PHAS: Newbie; Loc: UK; Posts: 20, Gallery; Registered on: Apr 27, 2006; Reply to: rs666

Re: Financing a new 997

this mioght interest u , as i have a deposit down .

Period hire 37 months
Cash Prie Pounds85000
Deposit Pounds 25000
Balance of cash/amount on credit Pounds60000 Total Notional
36 monthly rentals Pounds816.54
Amount Payable Pounds96 995.44
Final Rental Pounds42500

I will be able to better the quotation from Porsche and i should be able to get monthly payments down further.
I would hope the car would be worth at least Pounds55000 at the end of 36 months.

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Jun 4, 2006 11:03:27 AM

snarf: Newbie; Loc: UK; Posts: 49, Gallery; Registered on: Apr 20, 2006; Reply to: PHAS

Re: Financing a new 997

Period hire 37 months
Cash Prie Pounds85000
Deposit Pounds 25000
Balance of cash/amount on credit Pounds60000 Total Notional
36 monthly rentals Pounds816.54
Amount Payable Pounds96 995.44
Final Rental Pounds42500

This is equivalent to a whopping 7.7% finance rate. As suggested this could be bettered - even an expensive second mortgage of Pounds60k at 6% would shave over Pounds70/month off repayments, in fact every 1% reduction in rate saves Pounds43.43/month.

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Jun 4, 2006 11:14:32 AM

moto: Senior; Loc: London, UK; Posts: 608, Gallery; Registered on: Jul 8, 2005; Reply to: PHAS

Re: Financing a new 997

hmm.. that's quite a lot of interest you'll have to pay!?

If I understand correctly:

Pounds816.54 x 36 = Pounds29,395
Final Rental = Pounds42,500

So the repayment is Pounds71,895 which is almost 12k of interest over 3 years! By my calculation, it's about 12% APR! (as Snarf said, the Flat Rate is indeed 7% over the term)
I'm pretty sure you can get a much better deal (e.g. 6.5 - 7%) else where!?

So if the car is worth Pounds55,000 at the end of the rental period, does it mean that you'll only have Pounds12,500 to carry over as a deposit for the next car?

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Jun 4, 2006 12:16:28 PM

throt: Rennteam VIP; Loc: London , United Kingdom; Posts: 6088, Gallery; Registered on: May 9, 2005; Reply to: moto

Re: Financing a new 997

Quote:
moto said:

So if the car is worth Pounds55,000 at the end of the rental period, does it mean that you'll only have Pounds12,500 to carry over as a deposit for the next car?

Yes 12,500 apparently , but I think 55gee is too optimistic , and if thats what they state then get in writing and check the wording for such words as ""around"" . Also of course on return of the vehicle you have to have a car in great shape and with average milege , DO NOT give them anything to chew on...

So be careful , because on return after 36 months this is where the business starts again , its a no brainer..

throt....

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