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New car finance compared to UK

New car finance compared to UK

Old Nov 17th 2015, 8:38 am
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Default New car finance compared to UK

Hi All,

I question popped into my head recently and while I remembered I wanted to ask here about new car financing in the USA.

Bakcground is: My wife is a USC with good credit history (She bought a car on a loan about 10 yrs ago) and we are moving back there next summer assuming all goes well with the visa(!).

The plan initially is to buy a used 'beater' car until we get settled and working (By beater I mean $5000 or so) then buy something newer or new for my wife. I love the Ford Fusion so we will consider one of those but how does finance work compared to the UK?

For example. Here now you can buy a new Ford on an 'Options' scheme which is basically leasing. You pay a months lease in advance then say £150 a month for 3 years with a final baloon payment option if you want to keep the car or you can trade in for a new model. Whereas when I've looked at dealers in the US it seems to be the more traditional finance route of putting down say a 25% deposit then making payments, is this correct?

The reason I ask is obviously while we are getting set up there are going to be a lot of outlays and if we could do as you can here, as in get a car then make the balloon payment at the end once we've been earning for a few years rather than at the beginning it would be much more helpful. Also, I know for me being a new resident, credit would be an issue but we can use my wife's credit yes?

Sorry if it seems a silly question, but I'm a car guy and one thing that helps me look forward to the move is looking forward to getting new car/s
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Old Nov 17th 2015, 9:35 am
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Default Re: New car finance compared to UK

2016 Fusion Sedan | Vehicle Incentives | Ford.com

Last time I bought a new car, 11 years ago I did it all on the web.

Never understood the attraction to lease unless there was a Business involved and tax benefits.
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Old Nov 17th 2015, 9:35 am
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Default Re: New car finance compared to UK

Hello

Car finance works in a pretty similar way some dealers even support expats with no credit. There are generally 2 x options.

1. Lease Option you will pay an amount to cover the depreciation on the car, so lets say the car you buy cost $10000 in 2 years time it would be worth $5000 over 12 months you would pay $416.67 per month. You can like in the UK continue to pay the lease or pay a lump sum to buy the car.

This is one way to keep your payments down but you need to be careful as mileage is often limited to 10k miles per annum you can increase it but it will cost you more.

2. Purchase option as you said above you put down a deposit and make monthly payments over a payment term you are comfortable with. 2,3,4 or 5 years.

It will help that your wife has credit in the US..... at least she has some sort of foot print.. How long ago did your wife leave the US? Im not 100% on this point I hope someone can give you some more clarity.

Thanks

NIck
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Old Nov 17th 2015, 10:05 am
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Default Re: New car finance compared to UK

Thanks both, and especially Boiler for the link!
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Old Nov 17th 2015, 11:08 am
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Default Re: New car finance compared to UK

Originally Posted by Boiler
Never understood the attraction to lease unless there was a Business involved and tax benefits.
For me, there isn't a car I can afford that I want to keep looking term. I drive about 8,000-10,000 miles a year. I don't want to pay much in maintenance for a car I know I don't want long term. I want a lower payment. Doesn't really bother me about not having residual value in the car, last car I owned I paid $20,000 something over finance plus significant investment in maintaining it and got $4200 11 years later. I know it's not for everyone. But at least for the next couple of years it's the better option for me. Who knows what it will be like when I my lease is up.
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Old Nov 17th 2015, 12:59 pm
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Default Re: New car finance compared to UK

Originally Posted by Duncan Roberts
For me, there isn't a car I can afford that I want to keep looking term. I drive about 8,000-10,000 miles a year. I don't want to pay much in maintenance for a car I know I don't want long term. I want a lower payment. Doesn't really bother me about not having residual value in the car, last car I owned I paid $20,000 something over finance plus significant investment in maintaining it and got $4200 11 years later. I know it's not for everyone. But at least for the next couple of years it's the better option for me. Who knows what it will be like when I my lease is up.
Just expensive way of doing it I guess. I know the numbers and have heard of people being dinged for everything when it goes back.

I have an old truck I paid $4,500 for in 2008, now the dog goes in it, so covered in dog hair and I use it to haul wood etc etc. This time of year it is treacherous out there, better when things get colder, but any minor dents etc I am long past caring about.

The car, well 11 years now and about 55,000 miles, think I have lost $7,00o on it.
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Old Nov 17th 2015, 1:05 pm
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Default Re: New car finance compared to UK

As I understand for the US credit rating calculations, the data lasts seven years, so if your wife has had no activity that generates credit data for ten years, her US credit rating may be virtually non-existant, and unless she can prove otherwise you should not assume she has "good credit".
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Old Nov 17th 2015, 1:10 pm
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Default Re: New car finance compared to UK

Originally Posted by Pulaski
As I understand for the US credit rating calculations, the data lasts seven years, so if your wife has had no activity that generates credit data for ten years, her US credit rating may be virtually non-existant, and unless she can prove otherwise you should not assume she has "good credit".
Is that a recent change?

When we moved to the US in 2008 my wife hadn't been in the country for 11 years (and no credit activity) and her rating was very good and used with folks like AT&T and a car dealer etc.
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Old Nov 17th 2015, 1:17 pm
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Default Re: New car finance compared to UK

Originally Posted by celticgrid
Is that a recent change?

When we moved to the US in 2008 my wife hadn't been in the country for 11 years (and no credit activity) and her rating was very good and used with folks like AT&T and a car dealer etc.
I dunno - I just heard that all activity data drops off after 7 years. ..... Maybe the "length of credit history" trumps that? (Length of credit history is one of five components of the credit calculation.)
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Old Nov 17th 2015, 2:15 pm
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Default Re: New car finance compared to UK

Originally Posted by celticgrid
Is that a recent change?

When we moved to the US in 2008 my wife hadn't been in the country for 11 years (and no credit activity) and her rating was very good and used with folks like AT&T and a car dealer etc.
Was she making student loan payments (out some such other similar activity) during the period she was out of the country?

We were in a similar situation but when we landed my wife had excellent credit to get us going.
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Old Nov 17th 2015, 2:32 pm
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Default Re: New car finance compared to UK

International Auto Source gets a good mention on here and I went with them. They got me a lease deal better than in the UK on a new Ford Escape with 20,000 miles per annum. They can however only set these deals up whilst you are in the UK. Ford is one of the four manufacturers they can get factory sourced deals on. Lots of people on here recommended them and in general they have been very good. You just have to stop them second guessing you sometimes!
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Old Nov 17th 2015, 3:24 pm
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Default Re: New car finance compared to UK

Originally Posted by Harveyspecter
Hi All,

I question popped into my head recently and while I remembered I wanted to ask here about new car financing in the USA.

Bakcground is: My wife is a USC with good credit history (She bought a car on a loan about 10 yrs ago) and we are moving back there next summer assuming all goes well with the visa(!).

The plan initially is to buy a used 'beater' car until we get settled and working (By beater I mean $5000 or so) then buy something newer or new for my wife. I love the Ford Fusion so we will consider one of those but how does finance work compared to the UK?

For example. Here now you can buy a new Ford on an 'Options' scheme which is basically leasing. You pay a months lease in advance then say £150 a month for 3 years with a final baloon payment option if you want to keep the car or you can trade in for a new model. Whereas when I've looked at dealers in the US it seems to be the more traditional finance route of putting down say a 25% deposit then making payments, is this correct?

The reason I ask is obviously while we are getting set up there are going to be a lot of outlays and if we could do as you can here, as in get a car then make the balloon payment at the end once we've been earning for a few years rather than at the beginning it would be much more helpful. Also, I know for me being a new resident, credit would be an issue but we can use my wife's credit yes?

Sorry if it seems a silly question, but I'm a car guy and one thing that helps me look forward to the move is looking forward to getting new car/s
I can confirm what others have said - yes Leases are quite common for new cars, and according to the ads I've seen many of them have zero down terms available
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Old Nov 17th 2015, 3:35 pm
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Default Re: New car finance compared to UK

Originally Posted by Pulaski
I dunno - I just heard that all activity data drops off after 7 years. ..... Maybe the "length of credit history" trumps that? (Length of credit history is one of five components of the credit calculation.)
My wife (USC) and I lived in the UK for 4 years, she returned to the US her credit had tumbled from excellent to terrible and her good credit from the UK did not count

She was able to get a car loan but the interest rate was loaded, after a year we refinanced as her credit now gave a much better interest rate
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Old Nov 17th 2015, 3:42 pm
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Default Re: New car finance compared to UK

Originally Posted by username.exe
Was she making student loan payments (out some such other similar activity) during the period she was out of the country?

We were in a similar situation but when we landed my wife had excellent credit to get us going.
No. Her outstanding student loan was fully paid off the day after the wedding!
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Old Nov 17th 2015, 9:54 pm
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Default Re: New car finance compared to UK

I have mentioned it before, American Express will transfer you credit history from UK to US and vice versa. I am not sure if any other credit card companies do the same. I know Capital One does not. I landed in the US with a credit score of 760 which I belief is a reasonable score. I had been here all of 2 weeks.
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