# Refinancing - 2 years up



## calumski (Feb 26, 2008)

The standard "3 month" letters are beginning to arrive at customers from Nissan Finance. They mention nothing about the option to refinance so I called their number to enquire.

It seems that since this is a regulated agreement then they must offer a refinancing option and this will be detailed in a subsequent letter, yet to arrive.

With a MY11 car at £70K and my PCP Balloon at £36K I think I'll be refinancing rather than jumping into a 2011 car. I'm sure many will be thinking along the same lines.

Might it be worth investigating some sort of group-buy or similar for refinancing? I have no familiarity with the finance market so will be keen to know how the forthcoming Nissan refinancing option compares to what else is available out there. :thumbsup:


----------



## calumski (Feb 26, 2008)

My "offer to refinance" letter arrived this week.

Term is 24 months and APR of 11.5%

No option to include a baloon payment. Just a standard pay-it-off in 24 months.

Has anyone found a more flexible option or better APR out there? :wavey:


----------



## james1 (Aug 23, 2010)

If people want to refinance, let me know,

i got a cracking broker....who works 7days a week and tries so hard to keep her clients happy.

james.


----------



## S99ANE (Apr 3, 2011)

Like James I have someone who I have dealt with now on a few cars with excellent dervice and rates.

PM me if you want details as I think MODs will think Im advertising.


----------



## calumski (Feb 26, 2008)

Either of your brokers might strike a rich seam of business if they tap into the R35 refinancing market.

PMs sent :thumbsup:


----------



## tonigmr2 (Sep 12, 2002)

Personal recommendations are fine, but we will twitch a bit if this becomes a habit.


----------



## anilj (Jan 30, 2010)

tonigmr2 said:


> Personal recommendations are fine, but we will twitch a bit if this becomes a habit.


Give him a yellow card.....


----------



## james1 (Aug 23, 2010)

hey i dont wanna step on anyone toes.....but will help if i can.

cheers

j.


----------



## anilj (Jan 30, 2010)

james1 said:


> hey i dont wanna step on anyone toes.....but will help if i can.
> 
> cheers
> 
> j.


Said Ginger Rodgers to Fred Astair...but seriously that is what the forum is about, but there also have been many problems in the past and things like this will need to be handled carefully otherwise Members react offensively:bawling:


----------



## calumski (Feb 26, 2008)

Ah, I didn't want to bend the rules of the forum, but in the same same way that the MLR (lancerregister.com) officially endorse a specific insurer, I was hoping that a similar endorsement/agreement might be set in place between a financing broker and *GTROC*.

It would be very well received.


----------



## tonigmr2 (Sep 12, 2002)

Not at the moment, no. But if one is reading feel free to contact us.:chuckle:


----------



## Adamantium (Jun 24, 2002)

can anyone pm me details please?

I'd like a pcp on a brand new gtr, but with a whopping deposit.


----------



## calumski (Feb 26, 2008)

tonigmr2 said:


> Not at the moment, no. But if one is reading feel free to contact us.


Now, there's an offer I'm sure will get the phones going :thumbsup:


----------



## r34mspec (May 30, 2007)

Adamantium said:


> can anyone pm me details please?
> 
> I'd like a pcp on a brand new gtr, but with a whopping deposit.


Why mate selling up again?


----------



## CT17 (Mar 25, 2011)

calumski said:


> My "offer to refinance" letter arrived this week.
> 
> Term is 24 months and APR of 11.5%
> 
> ...


I assume that's a joke! :runaway:

On the Range Rover I paid 9% interest total over the three years.
Borrowed 20k, paid back £21,800 in 36 payments.

For a main dealer that is rather lacking in putting the customer first.


----------



## ROG350Z (Jun 15, 2008)

11.5% good lord with BoE at .5% and Libor at not much over 2% and mortgages at 4% (obviously only if credit worthy).

I got an awesome deal at Clydesdale Asset Finance (Part of National Australia Group with virtually no exposure to the current debt crisis apparenty) actually and good final payment (with chunky deposit).

Rog.


----------



## calumski (Feb 26, 2008)

CT17 said:


> Term is 24 months and APR of 11.5%
> I assume that's a joke!


They are legally obliged to offer a refinancing option but with this quote it's clear that they want to steer you towards a trade-in for a new car.

It just means I go elsewhere for finance.


----------



## calumski (Feb 26, 2008)

james1 said:


> If people want to refinance, let me know,
> 
> i got a cracking broker....who works 7days a week and tries so hard to keep her clients happy.
> 
> james.


I can now totally vouch for Jame's (and now my cherished) broker. I'm a very happy fella :thumbsup:


----------



## professor matt (Nov 1, 2005)

Ok guys please watch out for brokers

I used a recommend broker from another forum member In an Previous thread

I was told there was a £500 fee,so took my details & my money and passed my details to Clydesdale asset Finance!!!:chairshot

so just be carefull


----------



## Chris956 (Apr 11, 2010)

calumski said:


> I can now totally vouch for Jame's (and now my cherished) broker. I'm a very happy fella :thumbsup:


Spill the beans then geez...... Ball park will do


----------



## calumski (Feb 26, 2008)

Chris956 said:


> Spill the beans then geez...... Ball park will do


I'd have to dig the details out but in the end it was a Santander package the broker recommended for my requirements.

Professor Matt is right though, it is a jungle out there. However with the only option from Nissan being £1800 a month at 11.5%, and there being no "GTROC endorsed" alternative, we are all out there having to fend for ourselves.

My broker worked 7 days a week and her phone was never off. She listened to what I had to say and presented several viable options. In the end I got what I wanted from it. Can't ask for more.


----------



## rob wild (Jul 30, 2007)

Great thread can anyone PM me some details? I was looking at the best way of getting into a GTR. I've found the car I wan't which is up for 43k but was given the following finance listing

DEPOSIT £17200.00
BALANCE £25800.00 TO FINANCE
TERM 24
MONTHLY PAYMENT £188
BALLOON £26626.50

Which makes the car £48338? Which tbh seemed a lot to me!


----------



## tonigmr2 (Sep 12, 2002)

Why such a low monthly payment? Your balloon is bigger than your initial finance!


----------



## CT17 (Mar 25, 2011)

rob wild said:


> Great thread can anyone PM me some details? I was looking at the best way of getting into a GTR. I've found the car I wan't which is up for 43k but was given the following finance listing
> 
> DEPOSIT £17200.00
> BALANCE £25800.00 TO FINANCE
> ...


Seems a lot to me too.

You are paying something like 20%+ interest over two years on what you are borrowing and the payments aren't even keeping up with the interest as you end up with a bigger ballon at the end.

Not good IMO.

If the car is only worth the baloon at the end you are paying a total of just over £20k for the pleasure of driving it for two years, plus running costs. You could then be left with very little deposit to go again with on another car or to then buy this one via HP. Meaning your monthly payments would jump considerably next time round unless you went for something much cheaper.

I'd advise a bigger monthly payment and find a better interest rate.
Both will mean you don't end up with no car and little deposit in two years for something else.

Just my 2p... (assuming figures are correct)


----------



## Anders_R35 (Jul 20, 2011)

6% is the best rate I've found so far, from Conister bank based in the Isle of Man. I financed my Scooby through them years ago, fairly flexible with ballon payment or straight monthly payments.

Anders


----------



## rob wild (Jul 30, 2007)

Thanks chaps, I was looking at a lower monthly deposit and don't mind front loading a deal with a large deposit. But couldn't believe as pointed out that the balloon payment is bigger than the original amount of finance!

Does anyone have any more examples of finance which are a little bit more economical?


----------



## calumski (Feb 26, 2008)

Chris956 said:


> Spill the beans then geez...... Ball park will do


ok, I've dug out the paperwork.

Ball park is :

Fix Rate of 4.5% for 39 months.
APR is 9.6%
Credit Facility Fee : £100
Completion Fee: £150

Borrowed £34k
total interest over 39 months: £5250 + the £250 fees.

This worked out cheaper than doing a PCP with balloon. My intention is to settle it after 24 months if possible. Remember, the interest is fixed rate so no silly front-loading of interest repayments.


----------



## calumski (Feb 26, 2008)

CT17 said:


> Seems a lot to me too.
> 
> You are paying something like 20%+ interest over two years


My example sees me paying a total of 16% over a term of 39 months (incl the fees) so yours sounds nuts!


----------



## AndyE14 (Mar 22, 2010)

calumski said:


> My example sees me paying a total of 16% over a term of 39 months (incl the fees) so yours sounds nuts!


An APR of 9.6% is still a bit nuts in the current market I assume the 4.5% headline rate is a flat rate otherwise the APR figure would be a lot closer to the headline rate.

You can get an unsecured personal loan of £25k if you have a good credit history from around the low 6.x% APR. Some of the better credit card deals (e.g. the latest crop of circa 24 month 0% balance transfer offers) effectively get you a rate of less than 3% (on the initial balance transferred in) for the entire 2 year term and the same low payment rate as a traditional PCP, without the need for the car as security.

In my head it is mad to take what is effectively a secured loan at 9.6% APR when you could finance for MUCH less, even if you need to avoid amortising the capital as payments over the lifetime of the loan.


----------



## Adamantium (Jun 24, 2002)

Ok, so I am finally considering financing a car for the first time.

So how do I navigate through the minefield and ring the right person?


----------



## calumski (Feb 26, 2008)

AndyE14 said:


> You can get an unsecured personal loan of £25k


Andy, you're not wrong. I'd not argue that popping as much as possible (if not all of it) on a 0% credit card is going to be the cheapest option (3% over 24 months). 

Perhaps it's just worth us looking at the viable ways to finance a £40k car outwith the unsecured bank loan option. Take it as a given that the bank loan would be the preferred option.

After reading the numbers quoted by Nissan, and their max term of 24-months, I was happy enough with the figures and flexibility provided by the Santander package. Would be good to hear from others who can beat it. I'll be surprised if mine is so far off the mark. :thumbsup:


----------



## Papa Smurf (Sep 25, 2008)

FHBR (Finance House Base Rate) is always higher than the Bank Rate as the risks are higher and the Finance Houses buy their monies in advance. 
Generally speaking, if you get offered an annual rate of below 5.5% then the manufacturer (Nissan) would be subsidising it. Nissan do not need to subsidise the rate with GTR's.
If buying on a PCP (Personal Contract Plan) where a guaranteed future value is on the contract (mileage dependant), then you would be foolish to put down as a deposit more than you have to as you will be able to hand the vehicle back at the end of the term without penalties unless damaged or mileage exceeded, or you can agree to purchase the car at the agreed price and re- finance if required. This then takes away all worries about the future value as the Finance Company takes the risk if the used market falls through the floor. A PCP rate will generally be around 9.9APR without subsidy, but I would expect the cost of money to increase soon so 12.9% could be on the cards before the year end.
Basically, the Finance Company takes the risk of falling values, increasing interest rates and the customer defaulting or even using the Voluntary Termination clause.
Overall, a personal loan through a friendly bank manager is the best deal, but bear in mind that they are a rare commodity these days.
Good luck!


----------



## AndyE14 (Mar 22, 2010)

nurburgringgtr said:


> FHBR (Finance House Base Rate) is always higher than the Bank Rate as the risks are higher and the Finance Houses buy their monies in advance.
> Generally speaking, if you get offered an annual rate of below 5.5% then the manufacturer (Nissan) would be subsidising it. Nissan do not need to subsidise the rate with GTR's.
> If buying on a PCP (Personal Contract Plan) where a guaranteed future value is on the contract (mileage dependant), then you would be foolish to put down as a deposit more than you have to as you will be able to hand the vehicle back at the end of the term without penalties unless damaged or mileage exceeded, or you can agree to purchase the car at the agreed price and re- finance if required. This then takes away all worries about the future value as the Finance Company takes the risk if the used market falls through the floor. A PCP rate will generally be around 9.9APR without subsidy, but I would expect the cost of money to increase soon so 12.9% could be on the cards before the year end.
> Basically, the Finance Company takes the risk of falling values, increasing interest rates and the customer defaulting or even using the Voluntary Termination clause.
> ...


I would argue that the PCP companies aren't stupid and tend to structure their arrangements so there is very little risk (apart from major market upheavals like those in 2007/8), so yes whilst notionally there is a risk premium in play with the sort of deposits being demanded most buyers would be pretty unhappy to see the value of their deposit wiped out entirely.

I was lucky enough to not really need finance on either of my GTR purchases but for added flexibility I went first down the 0% for 12 months route on £20k of my first car and then borrowed a smaller amount on a 3 year unsecured personal load at 6.4% APR if I remember correctly.

The best options are going to depend upon personal circumstances and the period of time that finance is needed for.

I would suggest the appropriate ordering of potential options would be as follows:-

Transfer balance to credit card on 0% deal for a 12 to 24 month term (likely cost in range of 2.5% to 5% effective APR for entire term financed) - assuming sufficient credit limit to cover purchase
Mortgage related borrowing - remortgage, further advance, 2nd charge typically in the range 5-6% APR
Unsecured personal loan (generally maximum funding of £25k) at a rate of 6-8% APR - Assumes high creditworthiness, but higher potential payments and large deposit requirements
Dealer subsidised finance assuming APR < 10%
Open market sourced finance APR likely to be in the 10-15% range

I personally wouldn't look at borrowing at greater than 8% APR to fund the purchase of a depreciating asset (and would seriously question buying myself a new car at all if I didn't at least have the ability to fund it outright, even if I chose not to), but I guess not everyone is lucky enough to be in this position and some people want a GTR so much they will pay whatever the going rate is.

It is really interesting though that Nissan only finance for 2 years, is this perhaps because they were initially prepared to underwrite the value for this time (given the uncertainty of the market initially) and perhaps this will change or because Nissan really see values dropping off a cliff after 2 years (big service costs or critical components with a short life span). I would be really interested in their rationale.


----------



## Anders_R35 (Jul 20, 2011)

ROG350Z said:


> 11.5% good lord with BoE at .5% and Libor at not much over 2% and mortgages at 4% (obviously only if credit worthy).
> 
> I got an awesome deal at Clydesdale Asset Finance (Part of National Australia Group with virtually no exposure to the current debt crisis apparenty) actually and good final payment (with chunky deposit).
> 
> Rog.


Good heads up, I called them today and sounds a great deal.

Hire purchase
£50K deposit
£25K loan over 4 years

3.1% base with 6.5% APR!

Optional ballon payment to bring down the monthly payments. I asked about early re-payment and the chap said there's a fee of one months interest.

Sounds good to me. 

Anders


----------



## calumski (Feb 26, 2008)

AndyE14 said:


> It is really interesting though that Nissan only finance for 2 years ... I would be really interested in their rationale.


Nissan will happily finance for over 2 years. They just don't offer to refinance over a shorter or longer term than 2 years since their rationale is to encourage you into a new 2011 GTR. Can't blame them really. They are required by law to offer a refincing option so they make it as basic and unatrractive as possible.


----------



## calumski (Feb 26, 2008)

Adamantium said:


> Ok, so I am finally considering financing a car for the first time.
> 
> So how do I navigate through the minefield and ring the right person?


This is exactly where a GTROC-endorsed set of guidelines and/or finance-partner would be extremely useful.


----------



## AndyE14 (Mar 22, 2010)

calumski said:


> Nissan will happily finance for over 2 years. They just don't offer to refinance over a shorter or longer term than 2 years since their rationale is to encourage you into a new 2011 GTR. Can't blame them really. They are required by law to offer a refincing option so they make it as basic and unatrractive as possible.


They have a choice of how long they finance for in the first instance however. Generally Vehicle Finance is a good source of revenue for a manufacturer even at the "subsidised rate" a AAA rated corporate can issue bonds at circa 2% over base or less (interest rates have been set at effectively zero in Japan for a long time). Compare a 6% effective return on £40k @ £2400 per annum profit compared to the revenue Nissan gets from annual servicing, where most think they are taking the piss. GM had the best example of this with the GMAC finance arm which as I understand it was the most profitable GM division for quite some time until they blew themselves up with subprime mortgages.

I don't buy that they are encouraging upgrades as it is just as likely that a customer will defect from the GTR and go elsewhere at the end of the PCP deal, something else must be driving this contract length.


----------



## rob wild (Jul 30, 2007)

This thread should be made a sticky as it is very useful with all the advice!



AndyE14 said:


> It is really interesting though that Nissan only finance for 2 years, is this perhaps because they were initially prepared to underwrite the value for this time (given the uncertainty of the market initially) and perhaps this will change or because Nissan really see values dropping off a cliff after 2 years (big service costs or critical components with a short life span). I would be really interested in their rationale.


I think you may have hit the nail on the head there! Many of the finance companies I have spoke to are only giving low balloon's as they seem to expect the cars to drop sharply over the next two years! After doing some digging I've gone from expecting to pay 43-45k for a 59 black, black edition (sat nav) to now being offered one for 39k! and I've found a dealer that is offering me a 09 for 37.5K Just can't believe how much they have come down! I suppose what might be putting some people off is the cost of running with extended warranty costing over 1k and big service costs. Although I still can't wait to get one!


----------



## CT17 (Mar 25, 2011)

The low MFV or balloon on new ones is usually very conservative, but it's not just to cover their rear end when you hand the car back. If the car is worth more than the balloon (which is pretty much always is) you have a deposit towards another deal.

Otherwise you stump up a deposit, make monthly payments and then have nothing when you hand it back when the balloon is due. So you can't afford to go again on another car unless you manage to free a lump of cash up from somewhere else...

Looking at earlier posters on this thread, you hand over about 20k in cold blood, make a monthly payment and then hand the car back back. If the car is worth the balloon you are left with four choices next time. (unless you can pay for it outright)
1.Find another huge deposit somewhere as the last was lost in depreciation.
2.Suffer much higher monthly payments 2nd time round, to keep up with the depreciation.
3.Give the car back and have nothing.
4.Finance the balloon, mean you end up spending years paying for the same car.

This is why I am not a big fan of PCPs.
Many people seem to end up paying for the car over many, many years or effectively rent it for two/three years and then hand it back.
Maybe I'm old fashioned, but I prefer to own a car I have. PCPs do let you drive a car that you can't afford to actually buy, but it's generally not cheap.


----------



## TAZZMAXX (Mar 9, 2010)

CT17 said:


> PCPs do let you drive a car that you can't afford to actually buy, but it's generally not cheap.


This possibly answers the question of why there are so many people driving round on expensive vehicles, namely young mums in big 4 x 4's. They can't all have well paid jobs so there has to be an alternative and I suppose this is where PCP's come into it.

I couldn't have afforded to buy my GTR outright but even if I'd had £55k in the bank I'd have still financed part of it so that I had a cash reserve if I'd needed it. There's for's and against's and I'm sure the arguments for each could be discussed all day.


----------



## nickwallwork (Jul 24, 2011)

I guess it all depends on how much cash flow you have, what your job is, how much you earn e.t.c. I'm in the lucky position being a property investor that I have passive income which means although I have to finance the purchase I don't rely on my day job to cover the re-payments so yes everyone's motivation is different... My choice is low risk which opens up ownership even without the bulk purchase price in the bank. Hooray for finance IMO!


----------



## AndyE14 (Mar 22, 2010)

nickwallwork said:


> I guess it all depends on how much cash flow you have, what your job is, how much you earn e.t.c. I'm in the lucky position being a property investor that I have passive income which means although I have to finance the purchase I don't rely on my day job to cover the re-payments so yes everyone's motivation is different... My choice is low risk which opens up ownership even without the bulk purchase price in the bank. Hooray for finance IMO!


True but the property related analogy for a PCP would be taking an interest only mortgage for 75% to cover the cost of buying a house which you know is never going to rise in value and will fall in value year on year but you never know by how much until you come to sell. That wouldn't be for me, but maybe I am a bit old fashioned (or maybe just old) too.


----------



## calumski (Feb 26, 2008)

calumski said:


> Nissan will happily finance for over 2 years. They just don't offer to refinance over a shorter or longer term than 2 years since their rationale is to encourage you into a new 2011 GTR. Can't blame them really. They are required by law to offer a refinancing option so they make it as basic and unatrractive as possible.


I stand by this. Remember, the only refinacing option offered by Nissan does not include a balloon. It is a straight full-repayment over a term of just 24 months, at an unattractive APR and with high monthly payments of over £1800.

Also, this thread is about "refinancing" rather than "buying" so while it is hopefully useful to anyone looking to buy a GT-R it is intended for those who already have a 09 GTR in their garage and are looking for an alternative to the only refinancing option offered by Nissan.

Accepting that an unsecured bank loan topped up by 10-20k of 0% credit card facility (3% transfer fee) is the optimal solution, many will find that it is an option that is not appropriate/available to them, which leads us to searching for the best finance options we can.

The arrangment I settled on enabled me to half my monthly payments, extend the term by over 50% and yet will still save me over £1500 when compared to the Nissan option. :thumbsup:


----------



## MARKEER35 (Jul 25, 2011)

Pcp suits me and allows me to have a car that otherwise would be out of my reach for a while and still remain within the 3 year warranty,after a divorce and taking on two teenage kids,enjoy while you can and afford.You only live once


----------

