Balloon Scheme loan

[evidence]

More often, the scheme will end at the end of 5th Year.

 

Buyer just let the finance company take back the car, he then choose another new car, sign another balloon scheme and carry on with life.

 

Considering that you only paying DP $11-12K now...and instalment $400-500 monthly...some people will find this scheme attractive as it suit their budget/lifestyle.

 

It is not that bad if you sit down and calculate carefully, eg.

 

1. every 5 year can change new car.

2. save on your DP at least $30-$40K.

3. low monthly instalment $400-500.

4. most car have 5 Year Warranty, so you are worry free during this contract period.

 

Negative is that you only get to drive this car for 5 years instead of 10 years, and there is no PARF($10-15K) at 10 years.

A few yrs ago if i remember correctly, Ford n Peugeot have this arrangement of payment scheme but seriously i dont know wats the take up rate n wat r the strings attached........any owners took up those offers?

 

But kudos to b?! for pioneering this scheme back in the 90s........

[Rakulei]

Talk to your car dealer when you're purchasing. Some of them have resources to get you your financing if you ask.

[Alg]

More often, the scheme will end at the end of 5th Year.

 

Buyer just let the finance company take back the car, he then choose another new car, sign another balloon scheme and carry on with life.

 

Considering that you only paying DP $11-12K now...and instalment $400-500 monthly...some people will find this scheme attractive as it suit their budget/lifestyle.

 

It is not that bad if you sit down and calculate carefully, eg.

 

1. every 5 year can change new car.

2. save on your DP at least $30-$40K.

3. low monthly instalment $400-500.

4. most car have 5 Year Warranty, so you are worry free during this contract period.

 

Negative is that you only get to drive this car for 5 years instead of 10 years, and there is no PARF($10-15K) at 10 years.

If what you have said is true, then vey attractive right? 5 years installment of $500 mthly and $15k dp, total $45k. Deppreciate only $9k/yr for new car. Much much better than normal loan right?

[Ivan_06]

If what you have said is true, then vey attractive right? 5 years installment of $500 mthly and $15k dp, total $45k. Deppreciate only $9k/yr for new car. Much much better than normal loan right?

The monthly installment is more like $800+ and above. I remembered seeing seeing Mitsubishi attrage with a down-payment of around $8500 and monthly payment of $850. Over 5 years, this would be around $60k, annual depreciation is $12k.

 

The banks and especially ADs are not stupid.

If what you have said is true, then vey attractive right? 5 years installment of $500 mthly and $15k dp, total $45k. Deppreciate only $9k/yr for new car. Much much better than normal loan right?

For normal cars monthly payment is around $1k. On top of the 10% down payment

Talk to your car dealer when you're purchasing. Some of them have resources to get you your financing if you ask.

If need to use such scheme, might as well dun buy car. Liddat, a $80k attrage will cost you $120k in total... Edited May 1, 2016 by Ivan_06