toyota easypay plan

S

sysman

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I'm looking at possibly changing cars, and i'm looking for information on the toyota easy pay plan. How does this work - toyota.ie say pay 25% to 35% upfront depending on the car, then pay 36 installments at the end of which you can trade in the car against a new car or refinance the last baloon payment over 2 to 3 years. - Has anyone done this - what percentage is the last payment. Or are there better finance deals out there - I like the idea of the balloon payment - as I think it will make the repayments more managable. From what toyota say this is the most populat choice. Comments?
 
Would you buy a car from your bank? If not, why would you buy a loan from your garage? Shop around.
 
Thanks rainy day for the reply but its not as crazy as you make out. The garage is offering finance with an APR of 6.9%. With the subsidies the dealers receive for arranging the finance its not uncommon for the grages to undercut the banks on motor loans. The best I can see elsewhere is tesco finance with an APR of 7.9%. But either way my question is more to do with financing a car using balloon payments, and trading up to a new car every few years, and the advantages and disadvantages of this approach to taking out a loan for the full car price and paying it off with the bank or other financial institute.
 
Does the quoted APR take into account the cost (opportunity or real) of the up front or end of term "balloon" payments? I would be very surprised if a finance package arranged through a garage would be cheaper than an equivalent motor/personal unsecured loan from a financial instution.
 

ptsb offers the following:

New cars over €9,000:- Typical APR 6.9%; Used cars and new cars under €9,000:- Typical APR 7.9%; Purchase Instalment Fee of € 1.

[broken link removed]

Assume that if it's a new car, the cost will very likely be over €9,000.
 
the point hes making is that this particular way of financing does not involve borrowing/paying for the full cost of the car up front as the eventual resale value after 3 years is taken into consideration. i believe this is a good idea (if buying new is ever a good idea) however a lot is dependent on what value the car has after 3 years.
have a look at what a 3 year old model would be worth today retail and ring around a few garages and pretend you have one to trade in and see what they say.
 
sysman,
Its not too bad a deal - but I would argue a bit about the interest rate. BAsically what you are doing is entering a contract hire agreement. (if you are not familiar with this, let me know and I will explain more)
Clubman - generally speaking garage finance is slightly cheaper than personal loan rates. The banks spend a lot of energy getting business from garages, and the area has become quite competitive in the last few years. Whilst garages are making an absolute packet from the finance arrangements, the price to the end user is generally in the 5% - 6% range, which is not unreasonable.
 
Thanks munsterdude - I'm learning fast about these contract hire agreement. It's called a PCP (Personal Contract Plan), and it seems to be very common in the UK for car financing. I know that the finance company are the legal owners of the car until the last payment, and the HP is secured against the car. Do you know if you can set a balloon payment of say €10,000 which would be below the value in three years time, or do the finance companies prefer a lower balloon payment. What would happen if the car was written off during the term of the HP - I presume the insurance pay out to the finance company or do the finance company take out their own insurance to cover this possibility? I'm looking at making up 35% deposit between cash and a trade in, then leave a €10,000 payment as the balloon payment and then pay the balance over 36 months, with a plan to go with a 08 model in three years time.
 
is there a good way to model these PCPs to get the best value for money vs a standard loan? ......from my calculations, i cant see significant difference between a PCP on a new car vs a standard loan on a 3 year old model.

At the end of the PCP, you should still have some equity to upgrade to another car which is probably about the same amount as the value of your now 6 year old car on stanard car loan is worth anyhow for the same monthly cost except your driving a car that has a warranty and is likely to need less major maintenance vs your new car........other than the fact that you now own your 6 year old car, am i missing anything?
 
Example ;

Car Cost 25,000
Trade in 6,000
...........................
Finance 19,000.


1. Pcp it 36 months, with balloon 9,000. so 10,000 @6% = mthly304 .
Then Balloon 9000.
Total cost 304@36 =10944 + 9000 ie balloon = 19944.

If you decide to re-finance the balloon of 9,000 for 24 mths @9% = 24 @411=9,864
The Garage will wish you to trade up.

If you keep car 60 mths starting with pcp
1. Pay 304 for 36 mths
2. Pay 411 for 24 mths.

Total on pcp = 20808.
...................

Or do straight loan/Hp for 60 months @ 6% .

1. 60 monthly 367 = 22,020.
........................................
There is over 5 years about 200 per year money money difference .
It depends on your circumstances but on balance I think straight ownership beats the catches on pcp most times.
Remember @ end of pcp term the balloon will be financed @ a dearer % than the 6% on a new car.You are also caught on mleage/service issues.

Conclusion.X
Car value 25,000 day one . You can save circa 1,000 on pcp @ the expense of call on future value ,or your circumstnces,or, your type of driving.
What about trying this? Tell garage you may go for Pcp then say you are going straight Hp/loan , and try to get extra discount because you are not using pcp.
 
Sysman
If you are a credit union member, check out their car loan rate which are usually in the 7-9 %range. If not, talk to the loans officer anyway, if you don't ask, they can't say no!
Advantages.
You are the legal owner of the car from day one, not the Finance Company.
The car cannot be repossessed if you fail to make your payments.(there are legal remedies available to the Credit Union)
You can pay up your loan early with no penalty,the same applies to paying more than the agreed instalment.
The same paperwork will be required, I.D. bank statements, payslips etc
You can sell or trade in your car at any stage and continue with your payments.
Enjoy your new car!
 
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