Negative equity

[Berkshire Rich]

If I understand it correctly, it works like this in our instance (numbers rounded for simplicity):-

Cost of car (list price) £37,200
Discount £5,700
Nett cost £31,500
Our deposit £1,800
Amount from finance company (MB Finance) £29700
Add interest £5,300
Total amount payable £35,000

50% of debt = £17,500 so we could terminate after paying £17,500.

But, our repayments 36 x £335 = £12,060 so we will never hit the 50%

Guaranteed future value at 36 months = £20,900, should we wish to spent that on a 3 year old 30,000 mile SLK.

This is one of the few downsides of a high GFV and low monthly repayments. If you know you will see the deal through the 3 years, you will benefit from both of these. But if you dont go the whole course, then as you rightly say you will need to effectively pay a significant penalty to get out.

 

[ibrar]

This is one of the few downsides of a high GFV and low monthly repayments. If you know you will see the deal through the 3 years, you will benefit from both of these. But if you dont go the whole course, then as you rightly say you will need to effectively pay a significant penalty to get out.

Is the GFV of £14,500 acceptable for a C220 CDI AMG Sport Plus in 3yrs with 30k on the clock?

 

[Piff]

This is one of the few downsides of a high GFV and low monthly repayments. If you know you will see the deal through the 3 years, you will benefit from both of these. But if you dont go the whole course, then as you rightly say you will need to effectively pay a significant penalty to get out.

At the time of taking the deal, we had little knowledge of the pros & cons of the various finance methods.

I was keen on an internet deal (from a large but not local dealership) on a lease which I printed & took into main dealer for negotiating leverage.
Salesman (and his finance manager) told us that we would be much better off with their PCP as circumstances may change and a PCP is easier to get out of.

Turns out that's not true.

Not that we expect to want to get out of the deal!

 

[Piff]

Is the GFV of £14,500 acceptable for a C220 CDI AMG Sport Plus in 3yrs with 30k on the clock?

Try to find a similar car on auto trader - 3yr old with 30k - or on MB used.
Should give you an idea of what the car will really be worth

 

[markjay]

If I understand it correctly, it works like this in our instance (numbers rounded for simplicity):-

Cost of car (list price) £37,200
Discount £5,700
Nett cost £31,500
Our deposit £1,800
Amount from finance company (MB Finance) £29700
Add interest £5,300
Total amount payable £35,000

Vauxhall use to sell cars with 'naught percent finance'... seems similar to applying discount then charging interest.

Or was the MB discount also available to cash buyers?

 

[Piff]

Vauxhall use to sell cars with 'naught percent finance'... seems similar to applying discount then charging interest.

Or was the MB discount also available to cash buyers?

I think that discount is available to cash buyers.
My simplistic illustration above lumps together "discount" & "retailer contribution"
Retailer contribution is listed on the standard "Agility" quotes