MB Finance. Cheers MB (Not).

[Seeker_UK]

Well, I spent all day looking at "softer" alternatives to my CLK.

The only MB that fitted the bill was a 2005- ML320CDI. A bit over my price band but hell, let's try the PCP anyway.

Let's set the background.

CLK bought in March for = £16K.

Deposit = £4.5K

Balance to be financed over 22 months = £11.5K

Monthly Payment = £185

4 months paid = £740

Get settlement figure. £12K! I said a rude word.

How the ****** hell can I have paid off £740 and owe more than I borrowed? At this rate the car will depreciate faster than I pay the bill off. Looks like I might be stuck with the sodding thing.

Marvellous. I'll start taking out block bookings with my osteopath.

 

[Blobcat]

Ouch.

Have you looked at changing the wheels? if you have 18's how about 17's or possibly 16's?

 

[Seeker_UK]

Ouch.

Have you looked at changing the wheels? if you have 18's how about 17's or possibly 16's?

It has sports suspension too :neutral:

Frankly, I want to chop it in now and go for an SUV / 4x4 - of all the things I test-drove today, they were the most comfortable, esp ML.

 

[Rory]

What was the interest rate and charges? In the great scheme of things you've hardly paid anything, but you should be able to settle for the outstanding balance plus 2mths interest.

 

[Seeker_UK]

This is what I don't understand. Surely, even with 2 months interest, the £700 I have paid in should have whittled the money down by £300 or so.

 

[Xtractorfan]

No the 11.5k you financed would have been subject to interest..at 5% over 24 months would have added £1,150 to the 11,5k, so you are paying off £12, 650, so the figure you got was correct...
Please please always read all agreements and ask for an interest figure, also get the finance guy to explain every last detail,, then when a question pops up you will always be aware of the answer, not enought people do it.. and it is always worth while getting figures written down and showing them to another sales man..different garage and he will poke holes in the figures..

 

[Seeker_UK]

No the 11.5k you financed would have been subject to interest..at 5% over 24 months would have added £1,150 to the 11,5k, so you are paying off £12, 650, so the figure you got was correct...

I see, so they bung it all on at the start. I thought that interest was added monthly.

I'm still buggered though

 

[Xtractorfan]

No you should have a copy of the original agreement..you should have been given a copy check it out.. buggered yes, in a way but there are ways to minimise the damage, tho todays climate does not lend itself to large finance agreements or credit in any way..

Can I ask what value your car is today on the open market..

 

[hawk20]

I see, so they bung it all on at the start. I thought that interest was added monthly.

I'm still buggered though

No they don't bung it all on at the start. They calculate the interest fairly and should always tell you the APR (the only definition of interest rate that makes sense when borrowing).

Several things have happened. First you bought a CLK just as the new model was coming out (called the "e class coupe" but actually built on the C class platform). That does not help depreciation.

Second there is the dealers margin (gross margin will be 15% to 20% so up to £3k on your CLK. This is to cover overheads, advertising, marketing, approved used warranty etc etc). We can all knock it but the net margins are small and many dealers are closing.

Thirdly you have suffered half a year's depreciation.

Try a couple of other dealers. Part ex prices vary quite a lot at the moment. I agree with you about how comfortable the ML is. Even on very long runs I found it excellent. Don't forget the part ex figure may well be bigger than the settlement figure. So, for example, if the dealer gives you £14k in part ex and the settlement figure is £12k, then you have £2k towards your next car.

If you go to the Glass's Guide website and put in all your car's details they will give you a full valuation for only about £3. Take that to the dealer and it can help with the haggling I found.

 

[hawk20]

Well, I spent all day looking at "softer" alternatives to my CLK.

The only MB that fitted the bill was a 2005- ML320CDI. A bit over my price band but hell, let's try the PCP anyway.

Let's set the background.

CLK bought in March for = £16K.

Deposit = £4.5K

Balance to be financed over 22 months = £11.5K

Monthly Payment = £185

4 months paid = £740

Get settlement figure. £12K! I said a rude word.

How the ****** hell can I have paid off £740 and owe more than I borrowed? At this rate the car will depreciate faster than I pay the bill off. Looks like I might be stuck with the sodding thing.

.

I don't know what APR you are paying but last March credit was not easily available and dear on secondhand cars. You've borrowed £16k plus £180 arrangement fee (?) , but less the £4,500 deposit, so the first year's interest - at over 10% interest (?) - won't be a lot less than say £1200 and so 6 months of that will be around £600. With the arrangement fee the interest could knock out your early payments.

The settlement figure may include a month's payment that you will get back later.

 

[rf065]

How the ****** hell can I have paid off £740 and owe more than I borrowed?

I don't want to worry you but have you looked at your mortgage payments?

I bought a new house 3 years ago and if I wanted to pay my mortgage off today, it would cost me £1500 more than I borrowed 3 years ago.
Such is life!

Russ

 

[teddycatkin]

Reading the above posts to me the answer is simple -dont borrow and buy what you can afford.

 

[Seeker_UK]

I don't want to worry you but have you looked at your mortgage payments?

I bought a new house 3 years ago and if I wanted to pay my mortgage off today, it would cost me £1500 more than I borrowed 3 years ago.
Such is life!

Russ

Well that was what I was using as a yardstick.

I've had a mrtgage for 3 years now and although I've paid £X, it's only knocked off about 20% of £X off the mortgage. However, it has gone down, not up.

 

[Seeker_UK]

No they don't bung it all on at the start. They calculate the interest fairly and should always tell you the APR (the only definition of interest rate that makes sense when borrowing).

Several things have happened. First you bought a CLK just as the new model was coming out (called the "e class coupe" but actually built on the C class platform). That does not help depreciation.

Second there is the dealers margin (gross margin will be 15% to 20% so up to £3k on your CLK. This is to cover overheads, advertising, marketing, approved used warranty etc etc). We can all knock it but the net margins are small and many dealers are closing.

Thirdly you have suffered half a year's depreciation.

Try a couple of other dealers. Part ex prices vary quite a lot at the moment. I agree with you about how comfortable the ML is. Even on very long runs I found it excellent. Don't forget the part ex figure may well be bigger than the settlement figure. So, for example, if the dealer gives you £14k in part ex and the settlement figure is £12k, then you have £2k towards your next car.

If you go to the Glass's Guide website and put in all your car's details they will give you a full valuation for only about £3. Take that to the dealer and it can help with the haggling I found.

Cheers for that but I really don't have a problem with the p/ex value of the car which is pretty much in line with what I expected. The car was bought for £16K so over the 6 months, it's lost me £3K so I have no problem with that.

As someone who has bought several cars on PCPs, I have plenty of experience of buying them and chopping them in. The reason for my surprise is that this is the first time I have ever, and I mean ever, come across the situation where I owe more than I borrowed and on at leats one occasion have been into the PCP for an even shorter time than this and had contributed less deposit.......

As yet, I have not seriously haggled on any car but if MB are quoting me £400 a month (with £3.5K down) for a £20K '05 ML320CDI SE with 66K on the clock then even with me at my best and them at the wrong end of the sales quarter, I ain't gonna get them down to £300 I'm in a position to afford.

The most depressing thing about going out at the dealers yesterday, apart from some of the Burtons mannequins that pose as salesmen treating me worse than something that comes out of the back of a dog, was that after looking (and test driving) several cars I found the 4x4 / SUVs to be the best in terms of comfort and also all, with no exceptoin, out of my price bracket.

Looks like I'll have to suffer the CLK for a few more months to get a better deposit and then suffer another round of "Since we've dropped the price on [insert car model here] the entire population of Birmingham are interested in it - if we did the deal now, it's yours". Do they seriosuly think that that sort of old fanny still works?

 

[PeterCLK]

Following in from the seat /back thread I spent 10 mins fiddling with my seat and then at the weekend went for 2 x 1.5 hr drives. Much better. No back-ache at the end.

If I were you I would try all seat adjustments and as others have said a small towel or thin cushion (try a v thin loose-filled one).

This is going to be far cheaper than any of the above.

 

[kth286]

If you were really financing 11,500 over 22 months you would be paying 522 per month

BUT

you are only paying 185 per month.


Does that not ring any bells ?

 

[Seeker_UK]

If you were really financing 11,500 over 22 months you would be paying 522 per month

BUT

you are only paying 185 per month.


Does that not ring any bells ?

Yes, it rings the "I have a PCP not HP" bell

Look, over the last 15 years I have bought 19 cars all of which (bar one) were purchased on finance (car finance, personal loans, personal car buying loans, PCP you name it). It has been my experience that as the settlement figure on a PCP decreases at the same rate as the p/ex value, so the equity on the car is always the same (until perhaps the last 2-3 months of the term).

This is the first time I have ever experienced the settlement figure being greater than the starting balance and it is with MB finance who, I have been informed, are heavily subsidised to secure sales (quote "d'you know, you are the first customer with MB finance who actually has some equity").

 

[jberks]

CLK bought in March for = £16K.

Deposit = £4.5K

Balance to be financed over 22 months = £11.5K

Monthly Payment = £185

4 months paid = £740

Get settlement figure. £12K! I said a rude word.

You may well have signed up to an agreement thats piled on the whole interest figure up front, and ok, buyer beware and all that, but I have to agree, I may not expect the settlement figure to be much less than 11.5k at this stage but I wouldn't have expected it to be higher either. Golden rule, read the small print. In my case, I don't always either but then I tend to ride out agreements rather than swap and change.

That said, I'd expect a chat with the business manager to reap some rewards. Given that you are an existing customer, looking to remain so but swap over to a different, more expensive, vehicle, but may not feel that way if you had to pay all that interest in order to do so, it wouldn't surprise me if he could pull some strings with the finance co and somehow merge the old agreement into a new one, skipping the full interest loading on the first agreement. After all, they get to earn more on the 2nd deal anyway so its in their interests to play ball. In other words, if you wanted to pay up and walk, you'd be charged but if you wanted to stay and alter the figures, especially given that they're going up, they should be able to accomodate you.

 

[hawk20]

So what did you decide to do in the end?

 

[Seeker_UK]

So what did you decide to do in the end?

After speaking to MB finance about it. Throw myself out of the damned window.