Confused about car finance figures

MAFERGAL

Hi everyone, wondered if anyone had any guidance/thoughts on this and these figures?

We are a two car family, we purchased our cars through a main dealer back in 2014. Our family has since grown and we need a bigger car. We have been looking through our agreement paperwork as we are considering a VT (voluntary termination) on one of the cars. The figures on one car kind of match up if I do the workings out but the second doesn't by a long way.

Basically the amount of credit was £12269.00. Interest 4.8% APR. 'Total amount to pay' figure is stated as £18508.19. Monthly payments are £167.80 over 35 months with a final payment figure of £7,600 due on the 36th month. We are now at month 27.

For a VT 50% of the car needs to have been paid for. As in 8 months time the final payment figure would be due, I assumed that we must be near or over the 50% point (£9254.10 as stated in the 'Termination: Your rights' section of the agreement).

This is where my confusion sets in; 35 payments of £167.80 comes to £5,873 (so as it stands no where near the 50% mark stated to VT) but add that to the final payment fee of £7,600 this only comes to £13,473 :huh: How can this be right? :huh:

This has really confused us. We have the same contract set up for our second car and all these figures roughly add up, 45% will have been paid around the time the contract ends and adding together the amount paid and final payment figure roughly add up to the stated 'Total amount to pay' figure.

Has the dealer just made a massive mistake on this car or am I missing something? We appear to be 5k better off than we should be... I feel I am missing something. Our options seem to be pay around 4k and VTwalk away with nothing, or pay around 7k and keep the car.

sniggings

How much was the car without interest?

Nearlyold

The total amount payable is the price of the goods plus interest and any other finance charges, not the amount borrowed plus interest and any other finance charges. Thus any deposit or equity from a part exchange you put into the deal is included in the total amount payable and also counts towards the 50% VT threshold.

Did you put a deposit into the deal.

antrobus

MAFERGAL wrote: »

... Our options seem to be pay around 4k and VTwalk away with nothing, or pay around 7k and keep the car.

Or pay the remaining 8 instalments totalling £1342.40, return the car to the dealer, and walk away with nothing.

AnotherJoe

How much is the car is currently worth? Try webuyanycar or similar.

If its more than £7,600, then either get a full and final settlement for the loan, pay it off and sell the car, or trade it in and the dealer will sort out the finance outstanding.

I think bailing out of the loan now is likely to be your worst option. As said by antrobus, even if its worth less than £7,600 you've only got until the end of this year and then you can walk away, in the meantime £167 a month isn't a lot to pay for a car.

MAFERGAL

Nearlyold wrote: »

The total amount payable is the price of the goods plus interest and any other finance charges, not the amount borrowed plus interest and any other finance charges. Thus any deposit or equity from a part exchange you put into the deal is included in the total amount payable and also counts towards the 50% VT threshold.

Did you put a deposit into the deal.

Thank you, that makes more sense. We did trade in a car, working my way through the 8 page document I have found that figure; vehicle cash price was £17,119 less advance payment of £4,850. You are correct, I didn't realise that figure included the deposit already paid. I knew I must have been missing something!

Adding that figure to what we have already paid we are less than £100 away from the 50% figure. Looking on webuyanycar and other such sites the car is currently worth between £6,500 and £7,900 in perfect condition so any final settlement will be more than the car is worth.

AnotherJo and antrobus, thanks for your comments. With this in mind are we better off to VT next month? By March next year we will have gone over the max milage on the agreement by about 6,000 miles (due to a new job requiring a longer commute) and the car will be worth less than now. We would also require a loan to pay that figure or any final settlement figure and then the hassle of selling the car/part exing for the required amount.

poppasmurf_bewdley

Crickey.

A car costing £17,119 is now worth between £6,500 and £7900 in only two years????

Please tell us what car it is so we can all avoid buying one!

MAFERGAL

poppasmurf_bewdley wrote: »

Crickey.

A car costing £17,119 is now worth between £6,500 and £7900 in only two years????

Please tell us what car it is so we can all avoid buying one!

That's the price given on those cash for your car sites. If I look for similar for sale on the forecourts they are about 9.5k - 63 plate March 14 Seat Leon 1.2 TSI SE 5 door

Brooker_Dave

AnotherJoe wrote: »

in the meantime £167 a month isn't a lot to pay for a car.

It is if you don't get to keep it.

Brooker_Dave

MAFERGAL wrote: »

Thank you, that makes more sense. We did trade in a car, working my way through the 8 page document I have found that figure; vehicle cash price was £17,119 less advance payment of £4,850. You are correct, I didn't realise that figure included the deposit already paid. I knew I must have been missing something!

So you started with a car worth £4850, spend 2 years paying £12200, and come out at the end of the 24 months with nothing??

Why do people fall for these PCP deals????

Nearlyold

Brooker_Dave wrote: »

So you started with a car worth £4850, spend 2 years paying £12200, and come out at the end of the 24 months with nothing??

Why do people fall for these PCP deals????

Whether you pay cash, bank loan, PCP or traditional HP a new car is always going to lose you a shed load of money - there is no real way round that. Many people though are happy to do this as they enjoy having a new car, and if they're willing to lose £300 per month for the privilege and can comfortably afford it then it's their choice.