PCP Early Completion Rebate

vickk

Does anyone know how to calculate the interest rebate given when settling a PCP. I am buying a new car and planned to pay the balance in cash but the dealer has pointed out that the manufactures will pay an extra £1000 of my deposit and the rate is reduced to 4.9% APR.

He points out that the PCP can be paid early after 6 months.

Details are after PX I can pay £10720 cash on the £26720 purchase price or:

Take the PCP which will be 35 months at £224 with a final Balloon payment of £12000 with a Deposit of £9000 (£1000 is their money). Plus I get a cheque from them for £8500 as a refund from my PX.

I wonder if I would be better taking the PCP and then asking for a settlement figure after 6 months to get the £1000 contribution or will extra charges swallow up all the 1K.

The Manufacturer by the way is Toyota.

somethingcorporate

Do you have a copy of the T&Cs?

It will outline the early repayment penalties and without those it is impossible to calculate either way.

vickk

Searched Google for full terms and conditions but jusk keep finding general info and not full terms. Have email Toyota the question but no answer yet.

I can't help thinking they are not going to put in a grand if they haven't protected it some way

pheonixrising21

vickk wrote: »

Does anyone know how to calculate the interest rebate given when settling a PCP. I am buying a new car and planned to pay the balance in cash but the dealer has pointed out that the manufactures will pay an extra £1000 of my deposit and the rate is reduced to 4.9% APR.

He points out that the PCP can be paid early after 6 months.

Details are after PX I can pay £10720 cash on the £26720 purchase price or:

Take the PCP which will be 35 months at £224 with a final Balloon payment of £12000 with a Deposit of £9000 (£1000 is their money). Plus I get a cheque from them for £8500 as a refund from my PX.

I wonder if I would be better taking the PCP and then asking for a settlement figure after 6 months to get the £1000 contribution or will extra charges swallow up all the 1K.

The Manufacturer by the way is Toyota.

If the car is 26720, the deposit is 9000 and the balloon is 12000, then you are financing £5,720. Over 35 months, this is £163 per month in capital. The rest of the £224 is interest. That means that you will pay £366 in interest over the six months that you have to pay for.

There will usually be a early settlement fee, usually of 2-3 months interest. Your dealer should have a copy of the T&C's to confirm this. That will be another £120-£180, meaning a total of £480-£550 in interest/fees. Also, watch out for an option to purchase fee, which may or may not be included in the balloon (often around £100-£150, but I've seen it up to £350).

The alternative is to play hard-ball with the dealer and tell him that the £1000 "deposit contribution" has to be available for cash or he won't get a sale. It sometimes works, sometimes doesn't (I do quite a few mystery shops negotiating car prices). Maybe try it at the end of the month when its getting close to year end targets?