Confused by PCP finance

fishter

I'm new to car finance as I've always bought outright in the past.

Here's my confusion - what's the APR??

Car price 15737.00
deposit 5000.40
final value 6007.50
monthly payments 173.13 over 42 months (41 payments)

I've tried several online calculators, but I'm just not sure if the answer is right.

Can anyone help explain it to me?

daveyjp

Do any of the calculators say 8.12%?

fishter

8.12% has appeared in one or two calculations, alongside Effective Annual Rate (8.43%).
I'm just looking for a number to compare to other finance solutions we're looking at.

Thanks!

text

using the online pcp calculator at pcpcal.co.uk the rate comes out at 8.12% Hope that helps

facade

Surely the numbers you really want are

Price of car 15737.00

deposit 5000.40
final value 6007.50
monthly payments 173.13 over 42 months (41 payments) 7098.33
Total repayments 18106.23

Overpayment 2369.23

Works out at 15% of the original price that you pay over the top.


Never understood APRs me, but I do understand how much it costs me.

I always work out the total cost and compare that.

geek1981

I'm also confused with APR on a PCP and pcpcal is not accurate to what I've been quoted by dealer. Any other calculators please?

Price £15344
Deposit £5000
Loan £10344
GFV £7433.75
Monthly £132.70 (36 months)


what's the APR?
cheers!

almillar

Overpayment 2369.23

Works out at 15% of the original price that you pay over the top.

This one is much easier to understand and is referred to as the 'flat' interest rate - it ignores the length of time the loan takes.
Have some fun and work out the flat interest rate on your mortgage...
APR is really difficult to work out, I think even Martin would need a calculator. Luckily there are plenty of calculators around. Here's one:
http://money-saving-calculators.prudentminds.com/apr-calculator.html
Loan amout you have above, it's the full price minus the deposit: £10,344.
I get -19.9% on that calculator! Can someone check? I'm assuming 48 payments? If it's meant to be 19.9% you can do better with a straight loan, and possibly get a better price from the dealer for paying 'cash'.
Anyway, understand that that deposit you're putting down is dead money. When you get to the end of the term, it has helped make the repayments low this time, but has now vanished into thin air, and your repayments this time will have a big bump.

geek1981

almillar wrote: »

Luckily there are plenty of calculators around. Here's one:
http://money-saving-calculators.prudentminds.com/apr-calculator.html

This one was better and matches with dealers APR 6.8%

cheers!