Newb when it comes to financing. Want to buy car, Confused by qoute

Rapptor

Hello guys, hope you can help me here. I'm 23 and after a 2nd hand Astra XVR with 9000 miles on it, its price is 20610.

£100 Admin fee
£400 GAP fee
£144 Tax

All this is added onto the price of the car.


He quoted me:

£470 a month over 49 months and then the option to pay 7000 at the end as that's how much the car will still be worth that comes in at over 30000. It seems the 7000 isn't inclusive in the price they advertise is this correct?

1st actual quote i've ever received so i apologize if i missed something, i am confused.

Also is it like this for all cars on finance, The last payment on the car isn't in the price listed?

He also said the interest for 4.9% or something like that.


Cheers guys.

Pixie5740

The £7000 is inclusive of the price. The car costs £20,610 if you were to pay cash for it. The difference you're paying is fees and interest. If they're lumping the fees in with the capital you'll end up paying interest on the fees.

Rapptor

so there is 9 grand in extras and interest when interest is 5%?

dealer_wins

Signing this agreement is the same as throwing £10000 - £15000 in £50 notes on a bonfire!!

Buy a car when you have saved up for one!!

Pixie5740

Rapptor wrote: »

so there is 9 grand in extras and interest when interest is 5%?

Yes you'll be looking at paying circa £9,000 in fees and interest.

Is the interest rate quoted a flat rate interest or an APR? If you're not sure have a read at the MSE interest rate guide.

http://www.moneysavingexpert.com/banking/interest-rates

Edit: if you've been quoted 4.9% I suspect that it's a flat rate.

Rapptor

So all in all, it's cheaper getting a load from your bank lol. I had no idea they could just throw on nearly 10k onto a car and telling u the apr is 5% and im sure he said flat rate PCP.

R_P_W

How much do you earn? Likely spending 20k on a car at this point in your life will be very silly!

hyubh

Rapptor wrote: »

I'm 23 and after a 2nd hand Astra XVR with 9000 miles on it

What will the insurance be like, out of interest?

thebritishbloke

How old is this car? They're only £27,000 brand new...

Firstly, don't take this finance deal. £9000 in interest and fees is absolutely disgusting, that's just money you're essentially burning away.

Secondly, NEVER take GAP insurance through a dealer. Ever. There are loads of reputable companies online that provide GAP insurance, I'm with ALA and paid £120 for £20,000 worth of cover for 3 years.

It's very strange to get a PCP on a second-hand car, I'd only buy a second-hand car on a Hire Purchase if I were going to finance it (you pay off the whole car, no lump sum at the end). PCP's are usually intended for buying brand new cars, you're effectively paying off the depreciation of the vehicle. A lot of people take the car back to the dealer and get a new one every 3 years.

I know we don't know the exact amounts in regards to your finances, but please don't take this deal. I have a £20,000 car and over 3 years I'm paying £1000 in interest, you should never pay more than £1-1,500 in interest over the whole term for an average car (that means paying off the entire car).

Once again. DO NOT BUY THIS CAR. DO NOT BUY THIS CAR. Shop around, do you really need an Astra VXR? You could probably go to an Arnold Clark Vauxhall dealer (Arnold Clark are the biggest Vauxhall dealers in the UK and are ALWAYS the cheapest) and get a brand new one for less overall.

chanz4

I would check the insurance before you buy, you may find most wont insure your age on that model and will require a box those that do. The corsa they are a little more laid back on

Pixie5740

Rapptor wrote: »

So all in all, it's cheaper getting a load from your bank lol. I had no idea they could just throw on nearly 10k onto a car and telling u the apr is 5% and im sure he said flat rate PCP.

It might be cheaper borrowing the money from your bank, it might not be. It depends on the interest rate they offer you, if they are willing to lend you over £20,000 that is.

Probably best to heed the advice from thebritishbloke and find a different car to buy.