Balloon scheme questions

[Lsflsf]

Hi anyone know if a car is under the balloon scheme can be converted to OPC to enjoy the half yearly OPC cash rebate?

 

thinking of getting a fun car but i dont really drive it often as i already have a normal plate car and the supposed FC for this fun car is terrible.

 

Car normal loan monthly $1300

If under balloon $890

If under balloon with opc $***

 

Thanks in advance

Edited May 20, 2012 by Lsflsf

[Arixlim]

what is a balloon scheme..?

[Storeroom]

  On 7/11/2012 at 5:14 PM, Arixlim said:

what is a balloon scheme..?

 

Yah. How it works? Saw it in the ads in sgcarmart but never have a chance to ask the dealer.

[Liping24cn]

Loan has nothing to do with LTA rule on OPC.

 

[ChickenMob]

Nothing to do with OPC, just take away your current PARF in advance.

But the interest is higher, alot of hassle if you not driving till the end of COE.

[Leijasper]

Balloon scheme is a scheme where u use up ur parf In advance(therefore lower installment) n in

10yrs down when u scrap ur car u get $0 back.. Interest is higher den normal loan.. Heard it fr a dealer fren of mine..

[Seaweed]

want to balloon....better do rental....

[Jamesc]

If you want a weekend car,

 

just get a weekend car,

 

lower price means

 

smaller loan and less

 

interest paid.

 

Why make life complicated?

 

 

and pay more money!

Edited July 12, 2012 by Jamesc

[Audi655]

Bro, ;if you can't afford it , don't buy it. whatever ballon scheme they offer , just stick to something you can afford. stay within your budget.

[Meekgeek]

i personally feel balloon scheme not bad. this balloon scheme is unlike old times when there is a step up in payment.

especially for cars with high omv it seems quite worth it.

 

car must be >3yrs left.

 

e.g.

assuming car price 50k 3yrs left to go

omv at 30k, so u get back parf of = 30 * 0.55 = 16.5k at end of life.

 

regular loan.

monthly you pay = (50 + (50 * 1.88% * 3)) / 36 = 1.467k (end of life u get back 16.5k)

 

balloon loan

monthly you pay = ((50 + (50 * 2.60% * 3))-16.5) / 36 = 1.039k (so u pay $400 less a month but end of life u get back nothing)

 

additional int payment is abt 50 * (2.6%-1.88%) * 3 = 1.08k for whole of 3 yrs.

 

in short it's sort of using the final parf rebate as downpayment. this makes certain high omv models (e.g. RX8, certain Z4s) very worth it. but of cos this applies if the car life is 3-4yrs left.

if u balloon on a vehicle with longer life you would be paying alot more int.

 

in fact based on this example with the $400 you could roll some investment that can beat the interest paid (well that's taking the concept much further).

 

for OPC rebate. the handling is no diff between regular loan and balloon loan.

 

juz my 2 cents.....

 

 

 

 

 

[Jfkoh]

the rule is to drive till end 10 yrs? how bout if say @ 9yrs i wanna sell?

 

honestly i think seldom see people driving car till the 10th yrs mark

[Storeroom]

I just checked with a dealer. It works like what some bros mentioned earlier but it is more worthwhile if the car has a high parf value.

[Storeroom]

  On 7/12/2012 at 2:04 AM, Seaweed said:

want to balloon....better do rental....

 

I think rental will be more costly in long run right?

[Turbonetics]

is the interest rate for balloon scheme same as normal loan?

if balloon scheme interest rate is higher,then i see no point paying higher interest for it.

however,you get to drive a car which is "not within your reach".

[Seaweed]

its like buying insurance...how come someone want to balloon...answer is simple...he/she got no money...well...ok...there is exception of rich pple who like balloon also...but assuming they take balloon...if they fall...they will fall very harder...pay a little more for rental...and they won't need to worry when they can't pay for their car balloon payment...and the rental money already factor in maintenance etc etc...so they will not be shock by any sudden maintenance bill when something brokes down the same time as their pocket....

[Chuppychup]

so wad cars are worth it to balloon ? and those cars that are worth it to be balloon should be left 3 yrs or less ??

[Seaweed]

nothing is worth to balloon...

[Meekgeek]

  On 7/13/2012 at 1:24 AM, Seaweed said:

its like buying insurance...how come someone want to balloon...answer is simple...he/she got no money...well...ok...there is exception of rich pple who like balloon also...but assuming they take balloon...if they fall...they will fall very harder...pay a little more for rental...and they won't need to worry when they can't pay for their car balloon payment...and the rental money already factor in maintenance etc etc...so they will not be shock by any sudden maintenance bill when something brokes down the same time as their pocket....

 

do note that unlike balloon scheme of old where there is STEP-UP payment this juz uses the parf as a downpayment then calculate a fixed monthly payment through the life of the loan.

and usually tenor is quite short <4yrs.

 

i would think car rental is way more expensive. some experts got numbers to enlighten?

it's just math really, nothing to do with lifestyle choice if u ask me. well of cos many would advise that it is prudent not to stretch too thin.

 

think abt it, when u buy a car u loan the parf value also. end of the day u take back the parf.

which in essence quite silly bcos why is there parf in the 1st place? to discourage you from driving a veh for more than 10yrs i assume. the side effect of this is u have to shoulder the parf value as part of your monthly repayment.

 

the balloon scheme sorta gives u a work ard where the parf is basically used as a downpayment.

the downside is of cos a higher int rate. the effect of the higher int rate could be very little in absolute terms (when parf is high and tenor is short). im beginning to sound like a loan sales man. hahaha

 

but as usual juz my 2 cents....