I’ve run into Ford advertising numerous times over the past few weeks that I can buy a Ford Focus for $ 3.99 million if I take advantage of Good Finance. (I could buy Mondeo for $ 6 million, for example.)
Those over the age of 30 still remember the time before 2008
When it was much cheaper to buy a car on a loan than to buy cash. The reason for this was that the interest rates on the loans were so high that the buyer paid many times the discount over the term. The dealer didn’t care if he was looking to sell the car when selling the loan was a much bigger deal. Car dealerships have transformed into credit dealers, and the car has become just an extra burden they have on being able to sell off their lucrative loans.
Since the list price of the Ford Focus mentioned in the advertisement is $ 5.13 million, I wondered if there is a similar trick here. We can only get the car here if we ask for a loan.
So I put on a disguise and went to a Ford salon to inquire.
I found out that there was no trick behind it, or just a little one.
In the first round, the salon automatically releases the usual listings, so the real price of the car is 4.23 million HUF. That is what we could bring in the lowest vehicle in the ad for cash.
I don’t see how good this clowning list price is
I went to Skoda, just like that, and they were immediately given $ 1.1 million off the list price. (Article) They want to increase the prestige of the car by 20% above the real price They want to deceive the buyer that he is just getting a 20-25% discount by default? Is there a person who wants to buy a new car and doesn’t know that the list price has anything to do with reality? could you explain in the comments.)
If I apply for a special loan, Good Finance will give you an additional discount of $ 230 on the bargain purchase price. That’s how the advertised $ 3.99 million comes out.
For a minimum of 2 years, a minimum of 20% should be charged, that is, in our example, HUF 800,000, with a monthly repayment of HUF 36.7 thousand, and THM is 10.89%.
At that time, we repaid $ 881,000 ($ 800,000 in capital and $ 81,000 in interest), so we were still better at $ 149,000 than if we had taken it for cash. Taking into account the other borrowing costs, we won over $ 100,000. (In fact, a loan can be closed at any time at a one-off cost of seven thousand forints, even after the first month, so you can earn up to 200 thousand forints.)
I asked what’s good about Ford? They replied that so many burned themselves out of car loans during the crisis that no one wanted to borrow, so this is a deal to get people back on car loans. (More specifically on leasing, but this is not so important now.)
I suspected that only the lowest-priced car could be used for such a loan
Which almost no one would buy, but no, you could bid on any equipment at a similar price.
So there’s no trick in it, that’s really it, and not because interest rates come back in a big way. In fact, you can defraud the system because you can pay it off in a month’s time, so you don’t even have to spend money on interest.
However, it does have a little trick. If you go to Good Finance’s page here and realize that there is a loan (leasing) deal for 2.5% APR, that’s right, the $ 4.23 million is the starting point. There may be a maturity and low self-sufficiency where it is better to choose that version.
(The article is not about getting a new car on loan because it isn’t. But if you were to buy a new car anyway, you might want to think about doing it better. Related articles: What Car Can You Afford? Life without a car)