Deposit on finance

[hamdogg]

Hi all, just a quick one for those who have had finance in the past, a bit of advice needed, I've taken the plunge and got my next chipper on the never never! Speaking to the finance man he suggested I didn't put a large deposit down! No more than 20% but as I've just sold my old chipper, I'm wanting to put a bigger deposit down say 50%! To me I think this is better for me! Maybe not the finance company? Thanks

[TimberCutterDartmoor]

No they want to make more money. AF sees large deposits, early repayment etc as bad custom and it does nothing for your credit rating. I'd have said 20% tops.

[hamdogg]

No they want to make more money. AF sees large deposits, early repayment etc as bad custom and it does nothing for your credit rating. I'd have said 20% tops.

 

 

So a big deposit is better for me but not the finance company?

[Orchard]

So a big deposit is better for me but not the finance company?

 

 

Yes that's what I always thought, end of the day even if you finance 5 grand if you complete the agreement in time with no late payments it's is all good for your credit rating, plus putting a larger deposit down means lower monthly payments so better cash flow for yourself. The finance company just like bigger figures as they generally have targets based on sales invoice amounts each month.

[hamdogg]

Yes that's what I always thought, end of the day even if you finance 5 grand if you complete the agreement in time with no late payments it's is all good for your credit rating, plus putting a larger deposit down means lower monthly payments so better cash flow for yourself. The finance company just like bigger figures as they generally have targets based on sales invoice amounts each month.

 

 

This is what I thought orchard, I just want to keep my monthly payments down each month! Cheers

[TimberCutterDartmoor]

Yes but if you put less deposit down, you can keep the difference back to cover the higher repayment or use for other things; atleast that way the money is in your hands and not theirs. What they haven't told you is that say you borrow £10k over 3 years ex deposit so reckon on £4k a year inc interest and then after a year or two you default due to circumstances and they repo the machine, all the money you paid into the repayments plus deposit i.e the equity doesn't come back to you at all - you don't get a penny of that back! Plus you have to settle the full balance and they'll auction the machine off cheap. Only way out of this is to sell the machine to settle the outstanding finance and pay em off. Just be careful; it's not like houses.

[hamdogg]

I will always have the money to pay it off so I'm not too worried

[Orchard]

I will always have the money to pay it off so I'm not too worried

 

Nowt stopping you then 😉

[hamdogg]

All sorted now cheers folk!

[TimberCutterDartmoor]

I will always have the money to pay it off so I'm not too worried

 

Why bother with finance then?