Loan to pay PCP?

Kaiserchieftain

Hi,

I am looking to buy a car for work and have set a budget of around £40k. I have applied for and been successful in gaining finance up to £30k, I haven't applied for anymore as I was intending to put down a deposit I had saved. I have now spent that deposit so looking for another way to finance the car.

I have thought about getting a PCP, with a balloon payment of around £15k after the term, but the interest is around 7% or 8% apr for the £25k financed amount. However, I can get a £25k loan at 3% so saving around £3k or £4k finance fee over the term.

The question I have is...Can I enter into a PCP over 48 months, put a deposit down of £25k (the loan) with a balloon payment of £15k therefore there is essentially no loan amount in the PCP, therefore no monthly payments and then pay the £15k at the end of the term or hand the car back?

Thanks

Doug

meer53

If you get a loan of 25k to pay the deposit you then have to obtain finance for the PCP, do you earn enough to cover both amounts on finance ? I don't mean the repayments, i mean your available credit v your income.

Nearlyold

I'm not aware of any PCP type deals that will allow this (don't forget you are charged interest on the balloon element anyway). I do know Jaguar for example offered 50% down 50% payable in x years at 0% at some time - don't know whether they still offer it or if that is available from any other marque.
Would have thought you could get a PCP at less than 7 to 8% APR if you shop around dealers, ask them what their best "deal saver" rate is, but make sure they are quoting APR not flat rate

sourcrates

Plenty of cars in the "under 30 grand range".

With depreciation its just wasted money.