How do you work out/compare repayments and interest for PCP?

Doozergirl

Does anyone know how you compare something like this?

Dealer is offering a low interest finance deal at 6.9% APR, I can find the same car, cheaper through one of the brokers, which means borrowing less obviously but with an increased APR of 12.5%. I'm sure the broker deal is cheaper but I'd like to see what the exact difference is over the loan period.

Martin's loan calculator would be great except it calculates capital repayment of the full loan, whereas PCP only repays the difference between the purchase price and the guaranteed future value.

Any ideas how I work it out?

pwllbwdr

Dealers tend to quote "flat rate" interests. This means that the interest charge every month is based on the original borrow amount, even though you're making replayments. That is why the APR is substantially more - even more the case with standard hire purchase than PCP.

Are you sure the 6.9% offered by the dealer is an APR?

Doozergirl

It's a manufacturer offer, definitely APR. I can work out the difference in interest using Martin's loan clalculator so I might have to settle with that - it's good enough, I think.