Advice

[maisbitt]

As per Mark V's advice - ask them to provide the APR value for the loan they are offering. 6% "flat" over 5 years is considerably more than 6% APR, and private bank loans will be quoting APRs - the 2 aren't directly comparable.

If you borrow £1000 at 6% flat rate over 1 year, you'll pay back £60 in interest. If you borrow £10,000 at 6% flat rate over 5 years, you will pay 6% on it for every year of the loan = £3000 interest on a £10,000 loan (5 x £600 per year). The interest you pay is always based on the total amount borrowed at every timepoint along the loan.

When you have an APR rate calculation, you pay more interest initially, but as you pay more off, you pay less interest on the balance. It works like a mortgage - your payment is based on capital and interest. As you pay more off, more capital is paid back and therefore less interest is due on the balance. In year 1 you might find that 1/4 of your money is paying interest, but in year 5 the amount of interest owed will be negligible.

You will find that your 6% flat rate loan is more like 13-14% APR. The longer a loan is, the costlier it is to be doing flat rate % rather than APR rate at the same amount.

If you have good credit history and your personal circumstances will lead the bank to believe you can "afford" the loan comfortably then you can get a rate of 5.5 to 6% APR right now, if not, then you'll probably be paying considerably more on your loan rate as you're a greater risk. I personally think that if you're earning £13k per year and are looking to borrow a similar amount then you'll be looking at a bank loan of not less than 9% APR, even with good credit history. On paper it will look like you're overstretching yourself, even if you still live at home with teh parents. Best bet (if they're willing) is get your parents to take out the loan to get a far better rate than you could (assuming they have good credit history).

You generally get a better interest rate from VW dealers on a brand new car. If you were looking at a nearly new Roc at say 80% of new list price with a poor loan rate then in those circumstances it may be cheaper to buy new with a far better interest rate (bigger loan but smaller interest payments make total monthly figure to pay back actually less)

[maisbitt]

If you are looking to get a personal loan quote for a bank, I would try your own bank, even if the APR is a little higher than the cheapest out there, unless you have impeccable credit history - they know you, they have your financial history (that may be a bad thing if you bounce cheques, are constantly oerdrawn etc). If you start applying for loans at more than 1 place then it will affect your credit history file and make it harder for the next place to accept you.

At your quoted salary I don't think many places will support giving you a loan equivalent to your annual salary, especially as they will calculate your disposable income far lower than someone earning £60k trying to buy a £60k car. Not trying to cause offense with these salary related quotes, just telling you how a bank manager/loan specialist will justify their appraisal of your circumstances.

Have you considered the insurance implications of moving up from a 122PS 1.4TSI to a 200/210PS 2.0TSI? I am assuming from your wage and current car that your age and level of no claims discount is low and therefore such an upgrade will have a huge effect on your insurance premiums. Get insurance quotes for the new car beforehand to make sure you're happy to take the hit in higher premiums.

[RisingRoc]

At your quoted salary I don't think many places will support giving you a loan equivalent to your annual salary, especially as they will calculate your disposable income far lower than someone earning £60k trying to buy a £60k car. Not trying to cause offense with these salary related quotes, just telling you how a bank manager/loan specialist will justify their appraisal of your circumstances.

Have you considered the insurance implications of moving up from a 122PS 1.4TSI to a 200/210PS 2.0TSI? I am assuming from your wage and current car that your age and level of no claims discount is low and therefore such an upgrade will have a huge effect on your insurance premiums. Get insurance quotes for the new car beforehand to make sure you're happy to take the hit in higher premiums.

Really got to agree with this. GIven what you've said, it's not hard to know what your take home pay is. Essentially you'll be paying well over 50% of your salary a month to run the car when you include the loan, fuel, tax, insurance etc. That to me is just ludicrous!

The question I think you've got to ask is whether you can afford the car, not whether it's a good deal - without getting lost in the lovely engine and all the extras with it.

MIght be worth looking for a 122 with slightly lower spec? Or a high specced Polo for the next few years and then move to a Scirocco?

[maisbitt]

If you must have the car, you might find you can't get cheaper finance elsewhere due to your personal circumstances, but I would still try and haggle down the dealers quoted 6% "fixed" figure to something under 10% APR. As they've already quoted for finance, they're not adverse to lending you the money, just not at a great rate - so maybe there is a deal still to be done?

Consider that you'll be buying a car out of warranty - are you able to cope with a £400 unexpected repair or a pair of expensive tyres etc (upwards of £160 each if you shop around)?

When I was 18-25, I was spending most of my money going out on the lash, back then i'd rather have the beer money than a flash car (and I drove a crappy old Peugeot 205).

[candyboytsi210]

thanks guys. im not taking the plunge yet.

Still got alot of things to think about, been speaking to the dealer, It was the first car i was interested in , White, 19k miles up at 15950. They have reduced the car by £750. And with a £500 Deposit at £330 a month.

Im not planning on keeping the car over 3years. (term is 5 years) so i could go back in p/x or sell the car and i'd more than likley have some equity in the car right? or am i mis-understanding here.

So my car really would be paid off in 3years and i would get a rebate of interest, they say its 6% flat rate 13%apr . So its something to think about.

Insurance is 800£ more than current 122. So i can live with that. I know exactly where your coming from maisbitt, I could haggle with the warranty get them to add extended in, gaps included, glym is also.

What do you reccomend for me to do next? I can afford the car its not a BIG issue, when you look at my salary and stuff but that is a lil water in the works.

[wigit]

the issue you have on any sort of car specific finance is you don't tend to actually own the car until the term is finished (unlike an unsecured bank loan), so technically to sell it during the term you have to pay of the remaining finance before you can flog it, so based on 2 years left and around £300 a month after three years you will still owe circa £7,200 on it

[candyboytsi210]

very true. well i may just hang back like maisbitt said. unless they can give me a deal i cannot refuse. in my own mind i would rather save up a big deposit/entirely save up and buy instead of small deposit. but yeah

[Cuprabob]

In my experience you never know what's round the corner, especially in the current climate. Whatever option you end up going for, try and have a fair bit of equity in the car from day one and make sure you can cover any payments for 6 months should your circumstances change.

Even desirable cars are difficult to sell privately and you never want to be in the position where you have to sell the car urgently.

[BunnyJen]

Sounds like dealer bullshit to me

Do not put down a deposit until you have agreed everything (purchase price, APR, etc) otherwise they know they already have you committed (unless prepared to lose your deposit), and therefore don't need to negotiate so hard.

I would ask which dealership it's being transferred to, as you'll look to open negotiations with them once they receive it (show that you won't be rushed into anything). I would highly doubt it is going anywhere...

The key is to seem interested, but not smitten. You have to remember that this is just one example of the car you would like to purchase. If this one slips through your fingers, there will be another exactly like it available next week. No urgency required

Regarding the bank loan - I guess you would have to apply for one and see if they approve you. Don't apply for too many though, as I believe this could be detrimental.

Totally agree. When I was buying I went to see one and the guy told me I'd HAVE to put a deposit down that day because he had two others interested in it. One had an appointment with him at 1pm (I was there at that time and no one showed up.) Another was driving all the way down form Scotland to Cheshire to look at it. When I got there I asked if the guy had driven from Scotland and where he was and the dealer said he had gone away to think about it.....this ' guy ' never took the car. Sorry but if you're driving all that way to look at a car which you know is from a VW dealer, you know the price, you know the mileage and age. The only thing is whether or not the car is in good condition, which it was, so what reason why on earth would he have driven all that way to see a perfect car and not bought it? Safe to say I ended up not buying it in the end either and got mine a week later. The car was still there 3 weeks later. ;P I got a lot of different vibes off dealers and that one put me off as he'd been dishonest.

[maisbitt]

Im not planning on keeping the car over 3years. (term is 5 years) so i could go back in p/x or sell the car and i'd more than likley have some equity in the car right? or am i mis-understanding here.

The only way to do it that way is via an unsecured personal loan, that way the money is not attached to the car and you'll be able to sell the car at any point without settling the loan first (and then use the proceeds to settle the loan).

Cars aren't selling at all right now, more so premium used than new. That dealer really wants your money - are you part exing or buying outright? If outright you've got more bargaining power over either pice or (potentially) interest rate. I'm not sure whether the dealer has an interest in giving you a higher interest rate, or whether when he puts your details into the computer that is the rate that VW finance is prepared to lend to you at.

If you are part exing, always get your part ex price sorted first before you start haggling for discounts on the car you're getting, otherwise they'll give you discounts and then take it off your part ex price for same "cost to change". Assuming you are part exing, you will take quite a hit on your 122TSI for the dealer to make it worth their while. They don't like part-exing one car for another when there isn't much cost to change differential in it for them.

[candyboytsi210]

In the bank loan situation, i got a call from CarLoans4u at a rate of 5.33% flat which is around say 10% APR. with Barclays..

I told the dealer that i could get a loan at a better rate but the salesman replied with, ok thats fine, but remember at .7% you wont get free servicing for 2 years with that or a rebate of interest when you come to sell the car in 3 years which is what i was going to do anyway!

£315 from CarLoans4u
£333 from Dealership

£500 deposit.

Im not p/xing as car is going to family member.

[yellowplum]

Theres two rules to follow in anything...

1. NEVER PAY RETAIL!

2. DO YOUR HOMEWORK

If you do that you will be fine

[Mark V]

Insurance is 800£ more than current 122. So i can live with that.

YIKES!!!! £800 over and above what you already pay? I would really have to question whether having a higher powered car (lets face it your current 122TSI is not exactly 3-cylinder Polo performance)is the right decision at this stage of your driving career and bearing in mind current income - that must be a very significant monthly payment on top of the car finance repayments - how much. £100 or more?

[etotheip]

I agree I pay £350 insurance on my r!

[whiteDevil_170]

My insurance was £900 for my 2.0 tdi . I'm 20

[candyboytsi210]

i know guys. Just thinking about it at the moment, not as serious about it now as i was a couple of days ago, still keen on the car though, im just wary on isit really worth it or isn't it.

[candyboytsi210]

so i've put my budget down and found another scirocco at 13,995.

maybe that should help me out in the long run

Trying to negoiate a deal at the moment,

but seems ok to me right now.

£500 Deposit.
£280 p/m which i am going to push him down

Out of interest any ideas how much roughly a scirocco 2.0 tsi dsg viper green 30k miles would be worth.

[candyboytsi210]

Update: Put a deposit on a Viper green 2.0 tsi dsg 2009 model

[BunnyJen]

Update: Put a deposit on a Viper green 2.0 tsi dsg 2009 model

Does that mean you'll have to be called ViperBoyTsi2.0 now?

Congrats

[wigit]

Update: Put a deposit on a Viper green 2.0 tsi dsg 2009 model

Does that mean you'll have to be called ViperBoyTsi2.0 now?

Congrats

or even ViperBoyTsi210