Hello,
I was looking into finance recently for a new HiLux and 2.9% seems a good deal. Now I know there are a lot smarter cookies than me with this and was hoping someone could advise me if this is a trap or actually a good deal
Cheers
Car Finance - Toyota 2.9%
wayfastwhitie on 15/08/2019 - 14:35
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Look up opportunity cost 😉
Of having a Hilux? Or of the money OP is spending on the Hilux that he could be spending on anything else?
The latter
But your cash is also earning about 2.5% pa. You would only be 0.4% worse off by financing. While it isn't the best time, I'm sure you could put 50-60k in a conservative index fund and beat the 2.9% you are paying and still have the option to draw for emergencies or other potential opportunities.
But your cash is also earning about 2.5% pa. You would only be 0.4% worse off by financing.
Only if OP has to buy the Hilux, and not taking into account depreciation, etc.
You also then pay tax on that 2.5% interest income.
As such, you’re worse off then just 0.4%.
Yeah that's the current promo price for some states.
It doesn't come for free, and is costed in the back-end. Simple solution is to get a finance quote for the 2.9%, and find out a normal rate (either through dealership or outside, or both), and work out which is cheaper over the 4yr period.
Simple as that really, just do your homework and compare!
is costed in the back-end.
What do you mean here? Extra charges like monthly fees or something?
It's costed against the deal.
Can't just give money away without it coming from somewhere
It's called subvention
Sorry I'm dumb when it comes to cars. Haven't bought from a dealership for ages.
By costed against the deal, do you mean no/low discount? Ie. cheaper if I buy with cash rather than finance?
@Typical16-bitEnjoyer: Yep, cash or regular finance will give you a cheaper price during negotiation. It costs the sales department extra money to offer the 2.9%
But as always its worth comparing final figures. Sales manager and business manager can work out which solution works best. You might be a strong financial customer and get a pretty low rate normally, or you might not
make sure you have a quoted loan car from others before going to the dealer.
2.9% finance and full bore, bend over and take this ungreased stick retail price. Read the T&C, because it may also have a balloon/residual payment…
The extra interest is built into the pricing. You would get a better deal finding your own finance and haggling down the price.
Won't be RRP, it would be on a campaign special still.
Just wouldn't be the lowest nehotiatible deal if you take up the 2.9%
Diesel or petrol? There's a class action going through the courts right now about the diesel model's DPF problems.
If you ask a salesman about it they'll obviously say it's not a big deal, the problem was solved long ago, it was an old model, it's just a few cases out of thousands of happy customers, it's all covered by warranty so don't worry. All bending or breaking the truth.
Note that sales staff don't get every bit of information, nor do they hear every complaint.
I could count on 1 hand the number of customers that have told me about DPF issues on their cars. Compare that to the number of 2.8 diesels that are sold in this country and you get the picture.
While you might read about a class action, put the number of affected vehicles in the class action against the VFACTS figures and you'll see the real story.
The sales staff are there to do one thing, and one thing only: sell the vehicle by any means necessary.
I've been to enough car purchases to see all the tricks and lies they pull off to know what to look for.
Regarding the class action, do you have the number of claimants? I can't find it, even on the law firm's own site: http://bannisterlaw.com.au/toyota-class-action-investigation…
https://www.goauto.com.au/news/toyota/toyota-faces-class-act…
"A CLASS action against Toyota Australia over clogged diesel particulate filters (DPF) on 2.8-litre HiLux, Prado and Fortuner models has been lodged in the Federal Court on behalf of a unknown number of customers."
The number is unknown, so how can you compare the unknown number against vehicle sales to support your point?
The number is unknown
Because it was exactly my point. If it was equal to the number of purchasers, it would've been a bigger issue than just a class action; it would've actually have been a recall.
https://margarianlaw.com/plaintiffs-class-action-lawsuit/
There is no specific number of plaintiffs needed to file a Class Action Lawsuit by law, however, most judges will not certify a class unless there are at least a few dozens of people involved.
So to say it's a "class action", when neither you or I know the exact number, is just pointless. We could be talking anywhere from 50 onwards. To put this number in perspective, according to VFACTS, in Australia so far this year Toyota has sold 35,504 Fortuners, Prados and Hilux 4x4s combined.
The sales staff are there to do one thing, and one thing only: sell the vehicle by any means necessary.
No, we're not. You can only imagine the KPIs that we're reviewed on through the whole sale process. We're mystery shopped as well, where our customer service comes under scrutiny by people that won't buy from us, but have to act like they are. Add social media into the mix and you'll realise just how stupid that statement sounds.
thanks for your input. I was more wondering if there are any traps I'm not seeing. I know there will be fees involved, but want to know is that a better option than a traditional loan at a higher interest rate.
The only way to tell is to calculate the full costs of this and the full costs of say a loan from a bank. Go through the PDS and find all the fees and requirements and then see if it suits you. General things to be aware of are fixed terms (eg 3 years), balloon payments can be killers and also any set up costs for the loan.
It's usually not "traps" as such, but rather that it's not the best deal possible.
As Spackbace has been alluding to, it's the difference between getting the car at $40k with a 2.9% finance deal, vs. $37k in cash/bring your own finance (numbers are just hypothetical). You'll need to work out which one of those is a better deal based on your own circumstances.
Owned a Hilux and Navara. Apart from resale value of hilux, cant justify the extra 20k it cost. Review all your options.
It's a great deal. My mate paid close to 6% finance for his non Toyota vehicle
I love the way that a few vehicle brands advertise their financing at a low rate "…with a guaranteed future value…" built into the deal.
Which is the same as the balloon payment at the end of the finance period.
And the guarantee is only valid if you meet the criteria at that time (i.e. kms, condition of vehicle, etc.)Toyota was 1 of the first with a GFV based system, but also 1 of the most transparent. There's a calculator on the website which will give you the future value, based on the kms given. Holden brought in the same finance option, yet you need to go into the dealer to get those figures.
Also bear in mind it's a minimum value, your car could actually be worth more.
It's just another tool to help someone get into a car at a cheaper weekly price. Look at all the lease deals etc that you might see on HUKD. Vehicle ownership isn't a huge deal in the UK from what I've seen.
As you say, the UK model is effectively one of non-ownership. The basic premise is that you take out a car with a GFV clause, and the difference between the negotiated price and the GFV is financed and paid on a "per week" lease basis.
In short, (and solely for example) you buy a $50k car with $30k GFV after 2 years and get a "per week" price on the $20k difference that is effectively financed at "x"%. After the two years, the car just gets given back (subject to the various GFV conditions) and a new arrangement is entered into.
This effectively rolls on in perpetuity. The result of which is that many people simply do not "own" a car in the classic sense, put just pay what is effectively a lease fee to stay in a new car.
The GFV may or may not be underwritten by an insurance company to take risk off the manufacturer and the financing either provided through the manufacturer's finance arm or through a third party.
I'm aware that there is a big push to bring this UK/Euro model into Australia at present.
Never finance a depreciating asset
Unless you can use the cash to invest and make more than the 2.9%.
At any rate, take an Amarok V6 for a drive OP.
At any rate, take an Amarok V6 for a drive OP.
If you don't like curtain airbags ;)
Or autonomous braking, radar cruise control, etc etc
Yeah the airbags situation is a bit silly. I personally am not a fan of aeb, radar cruise should be at least optional though, pretty dumb. But the V6 Amarok hauls ass and is great to drive. I personally wouldn't buy a dual cab ute again anyway, too many compromises unless you need it for work.
@brendanm: Yeah I like radar cruise, don't care about lane departure etc.
Not updating the ute at any point with curtain airbags is just a weird call from VW. I really don't know why they still haven't bothered, I thought surely they'd do it on a refresh at some point.
@spackbace: It is bizarre, as they've put 100 airbags into every car in their lineup for years. Especially considering it's hardly cheap for a leaf sprung ute.
@brendanm: Compromises like what? Im genuinely curious as Ive only ever owned utes and am contemplating trying a prado or workmate spec 200 series next.
@TheBilly: The ride is crap. Back seats generally average. You have a tray to put stuff in, but it's then out in the open so you can't leave it in there. If you put a canopy on it, you may as well have just bought a wagon to behind with.
Drive a Hilux and Prado back to back and you'll see.
@brendanm: The back seats are crap. Theyre designed for pre teen kids. Ive never driven a wagon, would be good to compare once the current one expires.
@TheBilly: I'll only have wagons now. So much better. Added advantage is you actually have more room than a ute with the back seats down. I've had a 65" tv in there, outboard motors, all sorts of bits and pieces, then it can carry 7 people if I want.
@brendanm: Well thats logical. I have a hard top on my ute, not canopy but flat top. This is a hindrance, worst spend of money. Should have got a canopy or no top.
Thanks for the feedback guys, helpful. Not interested in an Amarok as I've lived VW life before - never again. Also, I like low range transfer cases. I'm considering the Ranger - actually rather it, but finance deals don't seem as sharp.
Fair enough, most people never take these off-road so I didn't think low range would be an issue. The finance rate doesn't matter as much if you are paying more for the car. As spackbace says, even with the hilux,you may pay a higher overall price as 2.9% finance versus negotiating a lower price on the vehicle, but a slightly higher interest rate.
Why can’t you negotiate the sticker price? I have on 0% interest. You can also adjust your repayments to suit your budget so ballon payment is up to the buyer as far as I know. Repayments were variable when I got the deal so made sure I paid entire amount before loan period ended and yes it was interest free other than a $7.50 loan establishment fee.
Make sure you check the fees. They smash you with establishment and monthly fees that seriously add up. I know this because I have finance with them. As others have mentioned, watch out for balloon payments at the end of the loan, it's how they lock you into trading-in and buying something new.
I bought 1yr ago, they gave me a good interest rate and a really good price on the car so I went with them. I got finance quotes off other providers, the lifetime cost was about the same so I went with the dealership finance to save the grief at settlement time (CBA royally screwed me last time around).
Don't rule out novated lease. I got 4yrs free servicing which made finance and novated lease cost neutral but depending on how much you drive and the servicing costs it may be worth it.
Can only speak from personal experience as above. No hidden fees etc and was my choice if I wanted a balloon payment at end. If you don’t pay loan over the 48months you will pay interest on balloon payment if you are unable to come up with lump sum.
No hidden fees, but their establishment, dealer commission and monthly fees are some of the highest in the market.
Recession is coming. Delay spending.
If you pay in cash, you pay interest at 0.00% pa.
More seriously though - do you need a Hilux, will it be a work vehicle that'll earn you money, and is there absolutely no cheaper alternatives (taking into account maintenance, reliability, etc) that'll suffice?