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Discussion Starter · #1 ·
Hey Everyone,

I was recently approved with Premier financial services on my first Mclaren purchase and I have a few questions.

* Has anyone used premier financial services? If so how was the experience?

* Can someone review my deal to make sure everything seems good? For background I never had a loan over 60k before. Hence the higher Cap reduction.
Gross cap Cost - $155,000
Cap reduction - $40,000
Adjusted cap cost - $115,000
Terms - 60 months
Base Monthly - $1379
Purchase Option - $60,000


* Can I negotiate anything on this deal?

Thanks in advance!
 

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Discussion Starter · #3 ·
That’s a Lot of interest. Premier is fine as a lender.
Do the math vs a low interest finance.
Dumb question but what math did you do to get that? I haven’t checked how much it is but I’d love to know how to break it down.
Thanks!
 

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At this price a credit union should do a standard loan for around $100k pretty easily. If you are already putting down $40k in cap reduction you could probably go that route also. I got approved for premier but the rate was higher than factory lease program (car was new).
 

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Dumb question but what math did you do to get that? I haven’t checked how much it is but I’d love to know how to break it down.
Thanks!
I’m not an expert. So you should ask premier/dealer on break down. Also you didn’t say anything about sales tax. Also I’m ignoring dmv registration and loan fees.
I assume both has gap insurance included.
So your 40k down is not all going to the loan. Some is going to registration and document fees. (Check with dealer because some maybe dealer profit or padding)

1. Traditional finance.
155,000. Sales tax @10% for ease of math.
155k x10% = 170500. 40k down. Loan amount 130500 @ 4% (made up a rate) x5 yrs = 2403 month

Total payment with Down. 184,180.
This maybe a little low depending on how that 40k gets carved up Into dmv/loan fees

Open ended lease or your deal above.
I assume the 40k down included the tax and all fees.
155,000. Sales tax is added monthly in califoria. Have to compare taxed numbers to be fair with traditional finance.

1379 month x 10% sales tax = 1517. X 60 month. = 91014. You still owe 60,000 x tax = 66,000 The end of 5 years. 66,000 payment at end + 91,014 = 157,014

Total payment. With down. 197,014

Who keeps the car the full term? Calculate the out in 3 years.
Finance. 24 remaining payments. = 57672
Premier. 24 payment plus end of lease payment. 36408 + 66000. If you sell to a dealer. Sales tax is exempt on the remaining balance. So it’s 60k+33096 = 93,096

Your money. I just did some math. Unless you write off lease. It’s not that good of a deal. Also the big benefit of a new car lease. You can walk away at the end which helps in case of an accident. With premier you are still on the hook for the remaining balance.
 

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Discussion Starter · #6 ·
I’m not an expert. So you should ask premier/dealer on break down. Also you didn’t say anything about sales tax. Also I’m ignoring dmv registration and loan fees.
I assume both has gap insurance included.
So your 40k down is not all going to the loan. Some is going to registration and document fees. (Check with dealer because some maybe dealer profit or padding)

1. Traditional finance.
155,000. Sales tax @10% for ease of math.
155k x10% = 170500. 40k down. Loan amount 130500 @ 4% (made up a rate) x5 yrs = 2403 month

Total payment with Down. 184,180.
This maybe a little low depending on how that 40k gets carved up Into dmv/loan fees

Open ended lease or your deal above.
I assume the 40k down included the tax and all fees.
155,000. Sales tax is added monthly in califoria. Have to compare taxed numbers to be fair with traditional finance.

1379 month x 10% sales tax = 1517. X 60 month. = 91014. You still owe 60,000 x tax = 66,000 The end of 5 years. 66,000 payment at end + 91,014 = 157,014

Total payment. With down. 197,014

Who keeps the car the full term? Calculate the out in 3 years.
Finance. 24 remaining payments. = 57672
Premier. 24 payment plus end of lease payment. 36408 + 66000. If you sell to a dealer. Sales tax is exempt on the remaining balance. So it’s 60k+33096 = 93,096

Your money. I just did some math. Unless you write off lease. It’s not that good of a deal. Also the big benefit of a new car lease. You can walk away at the end which helps in case of an accident. With premier you are still on the hook for the remaining balance.

Thank you so much. The lease deal really seemed off to me and I wasn't sure how they get the residual amount. I did the math, just like yourself, and I'm way better off going with my credit union. I can write off the lease for work but I'd rather be smart in spending my money. Can they adjust the lease to make it more favorable? If so can I negotiate?


Thanks!
 

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Just finance it through a normal bank. You'll likely sell it long before the term is up anyway. Better flexibility.
 

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Thank you so much. The lease deal really seemed off to me and I wasn't sure how they get the residual amount. I did the math, just like yourself, and I'm way better off going with my credit union. I can write off the lease for work but I'd rather be smart in spending my money. Can they adjust the lease to make it more favorable? If so can I negotiate?


Thanks!

adjust what on the "lease"

the residual is made up, as this "lease" is really the same as a finance since you are responsible for the balloon payment at the end. They are just calling it a lease to make it sound better??? I doubt the bank will raise the residual as it will expose them more than would like in case you default.

The only thing left is interest rate and selling price.... Dealer controls selling price.... 1% interest isnt making a big deal on a per monthly basis.
 

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since we are discussing an open ended leas (which i had entertained prior to picking up my 600 on a closed end)

what happens if this car is in an accident, and obviously the value drops, when you go to give back the car?

sorry to partially thread jack OP, but maybe we can all learn something here.
 

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since we are discussing an open ended leas (which i had entertained prior to picking up my 600 on a closed end)

what happens if this car is in an accident, and obviously the value drops, when you go to give back the car?

sorry to partially thread jack OP, but maybe we can all learn something here.
you dont give the car "back" your on the hook for the balloon payment..... either you have positive equity or negative equity when the balloon payment is due.
Its only a called a "lease" for sales tax advantages/tax write off advantages.....

I can see it being a positive only if 1. you write off the payment through a corporation... maybe its a "shop" car or whatever... 2. you end up in todays type market where used cars prices are strong...Otherwise its probably better just to do a simple finance.... But sometimes finding a lender to do more than 150k on a used car loan might be tough.
 

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you dont give the car "back" your on the hook for the balloon payment..... either you have positive equity or negative equity when the balloon payment is due.
Its only a called a "lease" for sales tax advantages/tax write off advantages.....

I can see it being a positive only if 1. you write off the payment through a corporation... maybe its a "shop" car or whatever... 2. you end up in todays type market where used cars prices are strong...Otherwise its probably better just to do a simple finance.... But sometimes finding a lender to do more than 150k on a used car loan might be tough.

the way one Mac dealer was exlpaning it to me was he has clients that exclusively do open ended leases... they jump in a car for say, 18-24 months, and then roll the equity (if applicable) into a new lease. I would never dream of owning any of these cars for say (60 months) hence my original "give it back" statement. Of course what the dealer told me was what i wanted to hear, not what i need to hear.. but the proposition sure sounded good. I just didnt feel comfortable with the entire thing to pull the trigger.
 

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the way one Mac dealer was exlpaning it to me was he has clients that exclusively do open ended leases... they jump in a car for say, 18-24 months, and then roll the equity (if applicable) into a new lease. I would never dream of owning any of these cars for say (60 months) hence my original "give it back" statement. Of course what the dealer told me was what i wanted to hear, not what i need to hear.. but the proposition sure sounded good. I just didnt feel comfortable with the entire thing to pull the trigger.
With any financing/lease scheme, You can always sell the car early. It makes zero difference unless the loan has weird rules..... Like pay off early fee...... Positive equity vs negative equity is the big question but thats not Bank/Lender related... Thats market related.... I think anyone who did a open ended lease/used finance on a well spec 12c/570/650/675 2 yrs ago would be okay if selling today.
But when there was big discounts on new cars, it would have been tough to find positive equity in only 1-2 years.
 

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So I financed my 600LT through Premier. It was either that or a 144 month loan through Woodside Credit. Here is why I went with Premier:

1) Most importantly, I'm not going to hold the car for the full 60 months
2) With Premier (open ended lease) you pay sales tax monthly. Which saves me from paying the vast majority of the tax liability for getting into this car vs a loan
3) They amortize the lease like a regular loan, with equity and interest broken out every month. Instead of giving the car back when you're done with the lease, you just sell it on your own and pay the balance (like a loan)
4) You can still depreciate like a lease (if company owned)

If this was a 50k Mercedes, I would probably go with a credit union. Though full sales tax on $280k is no joke...
 

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So I financed my 600LT through Premier. It was either that or a 144 month loan through Woodside Credit. Here is why I went with Premier:

1) Most importantly, I'm not going to hold the car for the full 60 months
2) With Premier (open ended lease) you pay sales tax monthly. Which saves me from paying the vast majority of the tax liability for getting into this car vs a loan
3) They amortize the lease like a regular loan, with equity and interest broken out every month. Instead of giving the car back when you're done with the lease, you just sell it on your own and pay the balance (like a loan)
4) You can still depreciate like a lease (if company owned)

If this was a 50k Mercedes, I would probably go with a credit union. Though full sales tax on $280k is no joke...

how much down?
 

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20%, not sure if that was based on credit or standard.

Also have found them to be completely non-negotiable. Not even in their acquisition fee :LOL:

Can introduce you if you like!
 

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20%, not sure if that was based on credit or standard.

Also have found them to be completely non-negotiable. Not even in their acquisition fee :LOL:

Can introduce you if you like!

lol. thanks! but i already got a car. I did entertain the idea of an open ended lease before.. but i wasn't 100% sure on the workings..


So what happens if you have an accident, and reduces value, say 20k, and you go to give it back in month 20 of the loan? And at that point car is worth say, (210) now factoring in bad Carfax, it's worth 190.. and the amortiztion schedule at that point is say 230.. . you owe them 40k to get out?

that sounds confusing, or maybe i'am confused. LOL
 

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lol. thanks! but i already got a car. I did entertain the idea of an open ended lease before.. but i wasn't 100% sure on the workings..


So what happens if you have an accident, and reduces value, say 20k, and you go to give it back in month 20 of the loan? And at that point car is worth say, (210) now factoring in bad Carfax, it's worth 190.. and the amortiztion schedule at that point is say 230.. . you owe them 40k to get out?

that sounds confusing, or maybe i'am confused. LOL

Confusing. But with open ended lease there is no “turn in”. You have to sell it private party or sell it to a dealer. Either way it’s at market rate and your responsibility to sell the car. You are responsible for negative equity period

But it makes no difference in the above scenario compared to a simple finance.

The main difference is sales tax management (state dependent) between an open lease and a simple Finance.

I think in TX you pay sales tax up front even on lease. In CA you pay sales tax monthly on the payment only. Some states gets sales tax credit when you sell. CA there is no credit
 

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I have never used Premier Financial but a dealer once told me that they do not show up on credit reports as something you owe on. Didn't make sense to me but that's what he said. Also that you can trade it in any time without a penalty?
 

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I have never used Premier Financial but a dealer once told me that they do not show up on credit reports as something you owe on. Didn't make sense to me but that's what he said. Also that you can trade it in any time without a penalty?
I don’t have the details but it makes sense. Regarding the credit report I'm not sure, but the trade part makes sense. Its just a loan with a balloon payment and may not have any penalties. Simply pay off the balance at any time.
 

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I have never used Premier Financial but a dealer once told me that they do not show up on credit reports as something you owe on. Didn't make sense to me but that's what he said. Also that you can trade it in any time without a penalty?

this is correct, i heard it does not affect credit as well. how that works.. idk..
 
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