Help with car finance

shie6523

Hi everyone,

Just purchased a new car on finance (garage finance) and need a little help on the maths. Please see details below:

Total price of car £10,620.00
Less part ex of old car £530.00
Less deposit paid by me £1,140.00
Outstanding balance £8,950.00

The finance agreement is over 60 months (5 yrs) and the APR is 11.9% (I think – can’t see it anywhere on the finance agreement?)

I received a letter from the finance company stating the following:

First payment £348.88
58 monthly payments at £199.88
Final payment £324.88

That means the total price payable for the car is £12,266.80 – is that right?!!!

I originally applied to my bank for a loan at 6.6% but was rejected hence I had no option but to go with the garage’s finance.

Also, I have £2,613 in savings. Will it be better for me to use this money and pay off the finance quicker thus saving me money on interest charges in the long run ?

Any response would be most welcomed.

Many thanks

Shie6523

Empty_pockets

Yes interest is correct, bear in mind on your first year it's circa £1000.

If you don't need the savings, it's worth reducing the loan though with finance it's likely you'll have to pay it in full and renegotiate another loan with all the fees again.

TBH, you should have bought just a cheaper car.

mlp

Yes the total repayments look like they are £12,266. That's the problem with a 60 month loan!

poppasmurf_bewdley

And at the end of that five years (sounds longer than 60 months) your car which has cost you £12,226.80 will be worth about £2.5k at the most.

Does it still seem such a bargain?