Bring your own car PCP loan

darren2385

Hello

I have recently been looking into PCP deals on used cars from main dealers and the interest rates are ridiculous - for example bmw want 10.9%!

The total cost of credit is £4233 on £15350 loan.

This is based on £223pm for 36 months with a final payment of £11761.

I have had the idea of taking advantage of a low interest loan over a longer term and creating in affect my own PCP - as long as the loan will allow me to get out early.

For example, I could take out a £15350 loan over 60 months at 3.3 % , total amount of interest would be just £1300. That, and ending the loan early at 36 months might mean the final payment is only ~ £6678.

Now that's a difference of £4494. I understand I would be taking on the risk that if I wanted to clear the finance early I better hope the car is worth the same or more, whereas the PCP give me a "guarantee" I can hand the car back at 36months, but £4494 is a lot to save!

Have I missed something as it seems too good to be true?

Has anybody financed a car this car?

DCFC79

Would you get a loan @ 3.3% Apr?

Maybe the beSt you can get is a loan for 10.9%.

[Deleted User]

darren2385 wrote: »

Have I missed something as it seems too good to be true?

Has anybody financed a car this car?

Has anyone taken a loan to buy a car?

Yes, I believe they have.

Clive_Woody

You may find that the price of the car goes up (or doesn't come down from the sticker price) if you do not take their finance, but taking a loan at a lower APR, if you can get one at the low rate, then paying it off early is not unusual.

foxy-stoat

darren2385 wrote: »

Have I missed something as it seems too good to be true?

Has anybody financed a car this car?

Yes, its called personal finance, not your own PCP.....unless you were planning on billing yourself for any damage when you returned the car...or sold it.

It probably is too good to be true, until you get offered a loan for 3.3% interest.

Good luck with how ever you plan to finance your car.

jaybeetoo

darren2385 wrote: »

I have recently been looking into PCP deals on used cars from main dealers and the interest rates are ridiculous - for example bmw want 10.9%!

I don't know what cars you are looking at but have you considered a new car under PCP? The interest rates are often lower, the manufacturer often gives a cash contribution and there are bigger discounts off the list price. Stating the obvious, but a new car should have lower running costs over the same period of time.

chanz4

jaybeetoo wrote: »

I don't know what cars you are looking at but have you considered a new car under PCP? The interest rates are often lower, the manufacturer often gives a cash contribution and there are bigger discounts off the list price. Stating the obvious, but a new car should have lower running costs over the same period of time.

also for 4 years your in negative

flashg67

I see nothing wrong in theory, presuming you can get the 3.3% loan. Even if the car wasn't worth £11761, you'd still be 'up' unless the car was worth another 3k or so less, which is unlikely. unless you trash it.

You could look at what the same model that are 3-4 older are worth now, to give you an idea.