How can I apply for Supercar Finance ?
A question that I am asked on many occasions and you maybe surprised how easy it is now to achieve low cost finance on vehicles that cost in excess of £75,000.
As supercars become more affordable due to low cost finance more and more people are owing them.
As the market has expanded there have been a greater number of lenders that will finance cars of this nature.
How do I keep the payments as low as possible ?
This is achieved in three key areas;
The greater the deposit the lower your payments will be and it will also allow you to hedge against the deprecation of the vehicle.
2. Interest Rate
This is the smallest denominator as even an interest rate reduction of 0.5% will make a small fraction of a difference in the monthly payment. It is however worth keeping an eye on.
3. The Balloon or Residual Value
This is the area that will make the largest difference as you do not pay the capital down on the balloon payment. The balloon payment is usually guaranteed against the car at the end of the initial finance term. Subject to the condition of the car and the mileage agreed in the contract.
The condition of the vehicle is usually down to fair wear and tear but charges can be made for any scrapes, scuffs to alloys or dents. Most lenders will have an agreement that details all of the additional charges that would fall outside wear and tear. The mileage allowance is worthy of investigation as the charge for excess mileage if you intend to return the vehicle at the end of the primary term.
The balloon is usually guaranteed by the finance company subject to the mileage and condition of the vehicle so provided you are in line with both of these conditions you can give the vehicle back to the finance company.
Should you wish to retain the vehicle you can either pay the balloon or sometimes re-finance the balloon on another agreement and take ownership of it at the end.
Most super car or classic cars retain their value every well especially low mileage ones, it is therefore normal for customers to want to keep the vehicle or trade that vehilce in against another car.
In this case the dealer will settle the finance agreement for your existing vehicle whilst you enter into an agreement for the new vehicle
You should be aware that interest is charged on the balloon but you do not pay the capital element thus making the monthly paymwent very low.
It is not unusual on high end vehicles to achieve balloons of 50% of their original cost.
Some vehicles are also applicable for interest only agreements where you only pay the interest on the debt, this makes the monthly payment very small and is a very useful way of financing appreciating assets.
Certain super cars and rare classic cars will appreciate rather than depreciate like run of the mill vehicles.
What ways can I finance a Supercar?
As detailed above you can also finance a super can via a normal HIre Purchase contract with no balloon.
The payments will be higher but you will be paying down the debt from day 1 and you will also own the vehicle at the end.
Can I settle early?
Yes you can settle all finance agreements early without penalty. Some interest is still accrued depending on the type of agreement.
It is generally better to choose a shorter term if you are planning to settle early as this will reduce the interest payable.
We hope this has helped don’t forget to pick up the phone or send us an email if you have any questions.