Car lease finance - I can't work out how the monthly payments

deaston

TadleyBaggie wrote: »

Maybe not complete "porkies", the much loved (by car dealers) "flat rate" probably is close to 5%.

You're correct - after asking him, he says it was "5% flat". I assumed it was 5% APR which, compared to a loan, seemed ok. 9% APR is not so attractive. He showed me no real paperwork, just figures.

I'd say that gives me fair reason to ask for my deposit back and walk away.

worried_jim

deaston wrote: »

I'd say that gives me fair reason to ask for my deposit back and walk away.

Spanking avoided.

deaston

worried_jim wrote: »

Spanking avoided.

Indeed! Although he's getting the business manager to call me. If they do happen to go to 5% APR or sweeten the deal somehow, I may still go for it. It's a lovely car!

Short of saving for the next 12 months and paying cash, I see this as the only way I could get into the Range Rover immediately.

neilmcl

deaston wrote: »

I appreciate it's an expensive car and would expect it to cost me, but I can't work out how the figure of £859 per month has been reached.

I asked the dealer the APR and he said "about 5%" but I noticed on a piece of paper with some finance options the figure of 8.9%.

The car in question wasn't ready, so I've put down £500 to secure it and will go back next week to drive it. If I'm not totally happy, the dealer said I could take back my deposit and walk away, so I saw this as a good opportunity to cool-off and do some figures.

At the end of the 3yrs, I would probably hand it back or, if it's worth more than the GFV, buy it and then sell it privately.

As far as I can work out it is about 8.9% APR. Normal APR rates for new cars tend to be around 5.9% but used car rates tend to be higher from main dealers.

Personally I'd walk away, any dealer using a flat rate to entice custom knowing full well that the assumption is that you'd be expecting an APR rate, as is the norm for a PCP deal, is just out of order and not somebody I'd want to be doing business with.

deaston

neilmcl wrote: »

As far as I can work out it is about 8.9% APR. Normal APR rates for new cars tend to be around 5.9% but used car rates tend to be higher from main dealers.

Personally I'd walk away, any dealer using a flat rate to entice custom knowing full well that the assumption is that you'd be expecting an APR rate, as is the norm for a PCP deal, is just out of order and not somebody I'd want to be doing business with.

I'll use it as a bargaining tool - see if they offer me a better rate. If not, I may walk.

The Range Rover holds its value so well and is so desirable, I didn't think I'd be able to get a deal of any kind, so it might be a plus.

deaston

And another question - their saying the guaranteed final value will be about £35,000. Looking online, a three -year-old equivalent Sport is about £45,000.

If, in three years, mine is worth £45,000, what happens? Or would my dealer never admit it's worth more than £35,000?

facade

Surely the used one you are having will be older than 3 years after you've had it 3 years?

GFV sounds like a PCP deal, in which case you either buy the car for £35,000 and try and sell it for £45,000, or if it is really worth £45,000 to the dealer, they give you anything over £35,000 back when you hand the car back.

If the £45,000 is dealer selling price, then it isn't worth £45,000 though...

neilmcl

deaston wrote: »

And another question - their saying the guaranteed final value will be about £35,000. Looking online, a three -year-old equivalent Sport is about £45,000.

If, in three years, mine is worth £45,000, what happens? Or would my dealer never admit it's worth more than £35,000?

That's actually a good thing because it'll mean there will be some equity in the car at the end but don't forget the GMFV is based on the trade-in value not the retail.

Also, as mentioned, the car you saw isn't a fair comparison as your car won't be 3 years old at the end of the term will it.

deaston

neilmcl wrote: »

That's actually a good thing because it'll mean there will be some equity in the car at the end but don't forget the GMFV is based on the trade-in value not the retail.

Also, as mentioned, the car you saw isn't a fair comparison as your car won't be 3 years old at the end of the term will it.

True, but it'd only be a few months older (it's only three months old now).

photome

deaston wrote: »

You're correct - after asking him, he says it was "5% flat". I assumed it was 5% APR which, compared to a loan, seemed ok. 9% APR is not so attractive. He showed me no real paperwork, just figures.

I'd say that gives me fair reason to ask for my deposit back and walk away.

Halifax bank do PCP loans for cars, when i was looking a few months ago they were around 3.8%apr

edit, just realised you need to be a halifax customer of at least 3 months