help for the financially illiterate please

moongarden

Hi,

I bought a car on HP and i am looking at the credit agreement and i am puzzled as to how they have worked it out.

can anyone please tell me if the hire purchase charges are correct?

£2995 amount of credit
£1188.70 hire purchase charges
£4183.70 Balance payable

APR is 36.31% and the loan is over 30 months
(i know this is dreadful but i wasn't so savvy in 2004)

Thanks

grumbler

IMHO your question doesn't make any sense. Charges do look high, but this was what you agreed to pay and, probably, they include some kind of insurance.

BTW with these APR and charges the £3K car will finaly cost you .... £6425 :eek:

Rafter

I think you may be double counting Grumbler. The HP charges include the interest and are already included in the APR calculation?

Moongarden, I can't quite get the numbers to work out over 30 months but it seems to be about right over 32.

R.

grumbler

Rafter wrote:

I think you may be double counting Grumbler. The HP charges include the interest and are already included in the APR calculation?

I tried before posting: for £2995 loan with 36.31% APR over 30 months the true cost of the loan is £4599, not £4184 ...

For 32 months it is £4717

I use http://www.whatsthecost.com/loan.aspx

moongarden

Hi Grumbler - on the Credit Agreement it states
total credit £2995
then tells me at the bottom that this is at a rate of 36.31% APR
payable by 30 installments

Rafter - i thought not - i can't get it to work either, thats why i'm so confused.

i'm not wondering if they have got their figures wrong in my favour because it clearly states Total Balance Payable as 4183.70.

Rafter

Was there any kind of initial deposit or payment holiday at the beginning?

What are the payments per month? That could skew our calculations?

Were there any up front fees?

The actually APR you appear to be being charged is 31.5%

R

moongarden

there were no upfront fees
i paid £100 deposit but this was not included in the £2995 loan amount
the payments are £145.29 per month

the closest i can get on whats the cost is 31.4%

i like your sig by the way