PCP agreement

acemodder

Hi guys.

I'm curious.

If I sign up for a PCP car agreement.
For example the deposit is £1000

Monthly payments = £400 a month (4.9% APR)

Final balloon if I keep the car is £10,000

It means that I pay £14,400 on the monthly payments on the loan in total, (but the initial outstanding balance maybe only £12,000 but what if after 1 month I find a Personal loan for £12,000 the same value as the loan PCP amount but at a better APR, can I pay off the PCP monthly owed money, meaning my interest rate is better and then just wait till the PCP agreement period has ended and then pay the balloon off?

rtho782

It's not that simple, the 4.9% is charged on the whole balance including the balloon, so you're wanting to part settle, not fully settle, and they may not be happy for you to do this without either paying the final payment or handing the car back.

Perhaps you should just get a loan for the entire amount if you can get it much cheaper.

acemodder

I'm just curious.

The reason is PCP is 4.9% on the £39k car I want, a PL is 2.9% up to £25k, but then £25001 the APR jumps to 6.9%

So if i got PCP for the car and got a PL just to pay off the monthly interest part. it works out cheaper. A PL for the full £35k is more due to the higher APR.

System

The reason is PCP is 4.9% on the £39k car I want

And how much is a 12 month old 10,000 mile version of that car? I'm guessing it'll be somewhere around £25k? Surely that'd be a better idea and you not only own the car but also for an amount where the interest rate is far cheaper and for over £10k less than you would have paid?