Buying A Car, or as I like to call it, Getting Royally Ass-Fucked (523 hits)
Category: Business & FinancialRating: 1.33 on 9 reviews (Rate this item) (V)
Submitted by Philst82 <Philipdstubbs.at.hotmail.com> (View user info) at 2005-07-25 15:32:05 EDT
If there were ever a person whose cynicism should not be given reason to grow, it is me. I'm the kind of guy who automatically assumes everyone is a bastard, who will screw you over at a moments notice. So in gaining my trust, if you do manage it, you've done a pretty good job and can pat yourself on the back. Here, have a biscuit.
Two years ago, my parents decided that it would be a good idea to buy me a car for my 21st. Fantastic I thought, a new car, my lucky day. There was this fantastic deal on Peugeot 206s, 2 years free insurance and payments of £113 per month. At the time I was earning, so I could afford the payments, and what with my parents putting a large deposit down it made it so that when I got a real job (in 2 years time), I could consider getting a new car on the same sort of deal.
The way these deals work, for those who don't know, is you put a deposit down on the car at the beginning; anything from zero up to the cost of the whole car. After that, you pay a set amount every month over a certain period and at the end of this period you have a large bubble payment outstanding. At this point there are several things you can do. You can hand the car back, cancelling the agreement. You can also refinance the large bubble payment over another fixed period and keep the same car. Your final option is, assuming the car is worth more than the bubble payment, to trade the car in and use the equity in the car as deposit on a new finance scheme for a brand new car.
Sounds fantastic don't it?
So duly we went along to set up one of these agreements. A nice genial little man told me all about how great the car was and how his wife has one, and gave me his family history as well. For a while it almost made me forget that he was a car salesman. The maths was done, figures calculated and terms agreed. Our funny little car sales gnome assured me that there was no way a 2 year old 206 would be worth the bubble payment, he even went as far as saying there would probably be £1000 - £2000 worth of equity in the car, should I wish to put deposit on a new car then. And everything was fine and dandy. The salesman got his money, I got my car, everyone goes home happy.
Fast forward 2 years and it's a different story. Having just completed my degree (with first class honours), and secured myself a job at one of the big four accounting firms, I thought it would be high time to treat myself to a new car, thinking I could afford slightly higher payments and the equity in my car would go a long way to helping me get a nicer newer one. How wrong I was.
After a short inspection of the car (which is, by the way, in mint condition, with only 17,000 miles on the clock), the same car salesman who promised me it would be worth more than that bubble payment, went away to do his maths. CONVENIENTLY, when he returned, he produced a figure that was EXACTLY the same as the final bubble payment. No equity then. Also any new deals that he was prepared to offer me were way out of my price range and trading in the car would have no effect on that.
So what about the other options then? Well refinancing the car is a waste of time, because the monthly payments would go UP, despite me owing less on the car and this new agreement being over a longer period of time. Factor in insurance (my best quote for a 1.1l 3dr 206, I'm 23 with 2 years no claims and 5 years of no accidents/convictions, was £650.15) and it becomes cheaper to find the deposit they want for what is exactly the same car that comes with free insurance. Which as I've already said, is too expensive because of the monthly payments.
So maybe I could just hand it back? Give them the keys cancel the agreement and just forget this whole nasty episode. Well no. If I do that, I lose my two years no claims bonus, screwing up future insurance deals. Also if the agreement is cancelled, Peugeot don't like that, and say it "may count as a termination" against me. Which will royally fuck up my credit rating. So if I ever, heaven forbid, wanted to buy a house, getting a mortgage would be a goddamn nightmare. Thanks very much Peugeot.
So it seems I'm damned if I do, and damned if I don't. Like Swiss Tony once said, buying a car is like making love to a beautiful woman: sounds like a great idea to begin with, but it never lives up to expectations, and someone always ends up getting fucked.
Fuck off Swiss Tony.
User Reviews
Submitted by indoninja (user info) at 2005-07-25 16:26:08 EDT (#)
Ranking: 0
It sounds like you leased the car, with a very shitty lease-to-own agreement.
Why didn't you just buy a car?
You always get screwed when leasing, unless you are a big company.
Submitted by GodChicken (user info) at 2005-07-25 15:48:21 EDT (#)
Ranking: 1
This is exactly why leasing a car is such an evil fucking racket.
Bend over and shit whatever savings you have on a cheaper car or a motorcycle, get rid of that car while you still have equal equity. Every financial quarter they republish the "blue book" and the value will drop.
Seriously, just take it in the shorts now, it'll be worse later.
Submitted by c1ndy (user info) at 2005-07-25 15:45:39 EDT (#)
Ranking: 1
Advice for the future:
you shouldn't lose your no claims- you can save it for next time you have a car.
it's better to get a bankloan than HP on a car.
i'd get shot of the car and start again- you'll be able to repair your credit rating if youget a credit card and keep up the payments.
Submitted by bush_for_god (user info) at 2005-07-25 15:45:33 EDT (#)
Ranking: 2
I live in the wrong country as well.
Submitted by spamtrap50 (user info) at 2005-07-25 15:44:53 EDT (#)
Ranking: 2
Sounds like around the world car dealers are all the same...
Submitted by littledan (user info) at 2005-07-25 15:42:34 EDT (#)
Ranking: 2
Sell him the car back for the bubble payment. If you can't, conveniently leave the car there over night while you "tend to a family emergency" or something, then burn the whole lot to the ground. this would ensure you a way out, providing this nice little car salesmen isn't in the mob.
Submitted by Xcuses (user info) at 2005-07-25 15:39:46 EDT (#)
Ranking: 0
A car with free Insurance? That's an interesting concept. I live in the wrong country.
Submitted by Dead_0hi0_Sky (user info) at 2005-07-25 15:39:17 EDT (#)
Ranking: 2
No Comment
Submitted by jgreening (user info) at 2005-07-25 15:37:21 EDT (#)
Ranking: 2
I hate car dealers...
Seriously, even out of the workplace, they're assholes...