Do most people finance Cali or ???

[Thomas Powell]

We have been looking at California's now for 3 odd years and have only just discovered there's a owners club lol. Me and my wife are both in our late 20's with two young children 4 & 6, it's the ideal time to buy one now as the children's age but I was just wondering how other people afford them or do people wait till later in there lives?
As they are expensive surely not every one has 50k plus spare?
Would like to thank every one in advance and hopefully be a owner soon.

 

[steve and lisa]

We hire ours out when not using it as we never could of afforded one otherwise.

The money we get from hires covers insurance, finance payments, road tax, insurance plus the amount we have left over paid for our three week summer holiday plus we had money left over.

We just block out the weekends that we want to use it.

It's good fun

 

[Thomas Powell]

I did think of that idea but then a chap at work said that there is probably a clause renting it out while still on HP. Do you hire yours out privately? Or do you do it through a broker sort of speak.
Do you ever have trouble hiring it out and ending up forking out the money for finance instead?
Thanks for the reply

 

[steve and lisa]

We did inform the finance company and they did not have a problem, I just think you need to inform them. We currently hire out via several brokers, they charge between 5-10% but this saves us advertising and having a website. We did say in another post that this year has gone so well we are looking to buy another one next year and make it a proper part time business.

 

[Thomas Powell]

What sort of price do you hire out at ? Do you or ever had any problems?
I'm guessing your not short of bookings, one the finance what length term did you take & did you have a good deposit or just a little? Thanks again

 

[Maud]

Hi and welcome! I am in my late twenties too and bought my Cali last December on finance. It took me a very long time to make the decision to buy a Cali, and then several more months of juggling figures to decide that buying new was my best option due to finance rates etc. I took out VW finance over a 42 month term, paying the maximum deposit from my savings. My way of making this a rational purchase (at least that's what I tell myself!) is that I was able to sell my previous car and I use the Cali as my everyday vehicle; it makes the daily work commute so much more enjoyable as I have yet to stop smiling each time I get behind the wheel. The money simply goes out each month and, despite my initial worries on this count, it doesn't bother me at all as Ariadne is everything I hoped she would be and more; I certainly couldn't imagine hiring her out to anybody else as I love driving her too much and also want to be able to go away for weekends at the drop of a hat when the weather is good. If you can afford to buy now using some form of finance, I don't think that you will regret it - life is too short to just keep waiting and the Cali really can be a lifestyle-changing purchase if you make the most of it.

 

[Thomas Powell]

on the vw finance is there a balloon at the end of the 42 months?
thanks for the reply

 

[Maud]

Yes, there is a balloon payment if you decide to keep the Cali - something to factor in from the start.
Maud

 

[HowieDog]

We previously had two Californias which we hired for a couple of years to cover the running costs. Generally went well and very busy as were lived in Kent and plenty of demand to take them abroad.

If ts not your day job then don't underestimate the work involved or the time needed to prep and hand over. Also be very careful of back to back bookings as any issues or damage when the van comes back in will be difficult to sort in time. It can be pretty stressful, we had our blue one driven into a raised central reservation, one reversed into a tree breaking a window, one ripped bellows and another returned with a shredded tyre!! The excess covers this but its pretty heartbreaking when its your own van rather than just an asset used in the business. Also, depending on the insurance there is likely to be a hefty excess and some difficult conversations with customers. And don't forget the calls about how to lower the roof, find the gas etc.

I'd be very wary about the insurance if going through broker and where your own public liability lies in the event of a mechanical defect causing an accident. Keeping detailed maintenance records is very important. Also will need to register as self employed, complete a tax return and possible pay NI (class 2 and 4) depending on your profit although a lot of expenses can be offset - you ned to factor in accountants fees and also making are you have a watertight hire contract.

For us at the time it was the best way to have a Cali for our own use economically, but we wouldn't do it again. Not saying its impossible, but go into it with your eyes open.

 

[Thomas Powell]

was the cali on finance at the time?
We would only hire to cover the finance if that makes sense? it would be the only way that we could afford one. you could buy a nice house say 20 years ago for 50k i don't really want another mortgage.

 

[Lewis]

Thanks for posting this - great to hear from people in a similar situation.

Maud - you said that you paid the "maximum deposit from your savings" - not wishing to ask about specific figures but do you mean that there is an upper limit on deposits in order to be accepted for PCP? Currently saving like mad for a deposit as I want to try to keep the monthly payments down but wasn't aware that they might limit it.

 

[Thomas Powell]

On the PCP, I'm not a fan because after say paying the hefty deposit and paying monthly fees for say 42 months on the 43rd month i would have say 2 options 1, give back or 2, another loan or possibly 3, trade in and start again, and never actually owning the vehicle. To me the only sensible way is to pay cash if your lucky to have that amount spare/kicking about or HP.
On the latter to make it affordable it would have to be over the maximum 10 year period at £900 plus a month which is a silly amount.
Wonder how many people own there car outright? or is every one i see driving about have it on the knock?

 

[HowieDog]

We financed ours through a small business loan - they weren't new vans (a T4 and a T5) so after two years of ownership we sold them both with very little depreciation. Bigger risk as out of warranty (especially so if renting out) but at least much lower ownership costs and smaller amount of capital needed. mechanically we dint have any problems as both had a good history and we were well looked after by our local VWVC, JCB in Sittingbourne.

They were both LHD which was ideas as they spent most of their time in Europe. I do miss the T4, it was a 150bhp Westfalia and the previous owner was a VW mechanic and it flew!

 

[andyinluton]

£900 a month over 10 years is wrong?

When I bought mine october last year I looked out the finance options on various Calis & for a £50k van with £5k deposit VW finance were quoting £550/month to borrow £45k over 10 years or £770/month over 77 months, those are the only figures I can find at the moment.

You might find the dealers are offering large discounts & then increasing the interest rates?

I seem to remember 10% was minimum deposit.

 

[larrylamb]

Thanks for posting this - great to hear from people in a similar situation.

Maud - you said that you paid the "maximum deposit from your savings" - not wishing to ask about specific figures but do you mean that there is an upper limit on deposits in order to be accepted for PCP? Currently saving like mad for a deposit as I want to try to keep the monthly payments down but wasn't aware that they might limit it.

There is an upper limit on how much cash you can put down with the PCP plan, might be 20%? from memory.

 

[andyinluton]

I also checked out what the early settlement figures were like on the 10 year loan & actually because of the high residuals & £5k deposit it looked like after 3 years the settlement figure would have been something like £31k and five years £22k which as long as the mileage was reasonable, I would have thought selling the van to get out of the deal without having to put in more money would be reasonably easily done.

Just found the figures for 5 years - £45k borrowed would have been about 950/month

My suggestion - if you have a large deposit say £25k & can afford the £600/month, Use that to buy a small buy to let house not a cali !!! Round here that will get a two bed flat that can be rented out for £800/month which in turn pays for the Cali. The value of the flat is going up quicker than the cali is going down.

 

[teeboy]

I published the maths when I purchased my van - we went for the Mortgage option, but I created a spreadsheet comparing Mortgage, VW Finance, High Street Finance and PCP.

You will need to enter your numbers in the yellow boxes as it is out of date now.

See this thread: http://vwcaliforniaclub.com/threads/compare-finance-deals.4104/#post-36114

 

[Maud]

Thanks for posting this - great to hear from people in a similar situation.

Maud - you said that you paid the "maximum deposit from your savings" - not wishing to ask about specific figures but do you mean that there is an upper limit on deposits in order to be accepted for PCP? Currently saving like mad for a deposit as I want to try to keep the monthly payments down but wasn't aware that they might limit it.

Hi Lewis,
The maximum deposit (or Customer Contribution), as of September 2014, was 30% of the net price. I hope this helps I was in the same position and wanted to pay as much as possible to keep the monthly cost down. I was given finance quotes from more than one dealer and gave them a maximum amount that I would be happy to pay out each month before they started their calculations.

Maud

 

[MattBW]

I financed mine with a loan for about 2/3rds of the price, the VW finance was very expensive. Although they claimed 4.8% interest (I can't recall exact offer) its actually closer to 9% APR when I did the maths. I saved myself quite a bit of cash in interest by going elsewhere, I wonder how many people don't check and assume the VW deal is good?

 

[pjm-84]

Flat and APR rates!

 

[sidepod]

Going back to the original post, if you can afford to buy one at your tender age then go ahead.
Dont look at it as only for the term of the finance, think 20+ years. It's a vehicle you could keep for the rest of your life if you look after it.
Our van is 21 this year. Still going strong. (this stops us forking out for a new one - Want to but can't justify it).

Side.

 

[Meoncoast]

Dont look at it as only for the term of the finance, think 20+ years. It's a vehicle you could keep for the rest of your life if you look after it.
Our van is 21 this year. Still going strong. (this stops us forking out for a new one - Want to but can't justify it).

Ours being only 3 years old and I see it as a long term relationship looking at what a new replacement costs the increase in price since we bought seems a step too far. Second hand at the same spec and age are being listed the same or not far less than we paid for ours. New buyers are being given discounts but the increase in the prices in the last 3 years is staggering -- so if you can afford finance now must be better to buy now rather that save up as you may never catch up. How much will the Cali be in another 3 years.

 

[Dazshep]

Hi, we financed Bruce on the 10 year option. It is less per month than my last car with better residuals. Our view was that if you want a new vehicle every 3 to 4 years then you will always have a car loan around your neck. Aim to keep Bruce for 6 years ish then trade for another which will hopefully be the keeper( yeah right).

 

[Calicliff]

Buy it new for cash, its sorted then, you can enjoy all the trips and holidays without any worries. You only live once....

 

[teeboy]

Excellent Advice Cliff - I will just check behind the sofa for £40 grand

Go to love VW on the Web Site it says you can PCP/Solutions for between 18 and 24 months, then the finance brochure says 18 and 42 months.

For the HP deals they say 12-60 months, but Dazshep has a 10 year deal.

It is like the wild west!

If anyone can share some actual figures for recent PCP or HP deals I will update the spreadsheet I posted earlier...