Car finance

sinofrench26

Hope someone can help with this.  I am trying to purchase a used vehicle on PCP
So I have been offered this:
Car is £13750 plus £200 (Home delivery and they minus the admin fee of £299).  Mileage of the car is 20,800 and its valued at 13,850 (by quick online car buyers)
My deposit £1500 
They offered PCP £205.85 over a 48 month period with mileage of 10,000 at a rate of 7.9%APR
Meaning overall I pay £16,783.44

Is this a good deal or can I get better?  I've tried car finance but they are around the same.

Grumpy_chap

No-one can say whether it is a good deal unless you tell us more about the car.
You will be paying £17k for a £14k car.

sinofrench26

Its a Audi A3 2016 (16 reg) 1.6 TDI S LINE NAV 5d 109 BHP FASH + NAV + ULEz (£20 road tax).  20,800 mileage.  

Ive done a full check on autotrader so its clear and not dodgy.

It has SAT Nav, half leather interior, rear parking sensors.

sinofrench26

oops sorry for large font! not intentional

sinofrench26

There are scratches to the alloy wheels and he offered to have all 4 replaced for £300.  If I chip in £100?

sinofrench26

Grumpy_chap said:

No-one can say whether it is a good deal unless you tell us more about the car.
You will be paying £17k for a £14k car.

What do you think of above?

DrEskimo

I find it's useful to separate out the costs. The first cost is the car itself. You need to do some research and find out if the price of the car is good relative to the market. The only real way to do this is to search often and watch the prices over a period of time. You will soon get to know what's a high or low price for your cars trim, options, mileage and year.

As for the car itself, does your driving and journey types suit a diesel? 

The second is the price of the finance itself. PCP is just a loan, like any other loan. In this case, this PCP loan is costing you ~£3,000 to borrow £12,250 over 4yrs. If you could get a personal loan for the same amount, at the same 7.9% APR over the same 4yrs, it would cost just £2,000. However, this will cost you more per month at £298. The advantage is that you have no final payment to worry about or mileage restrictions, and of course it saves you £1,000.

Better still, you might be eligible for even lower rate APR on a personal loan depending on your credit history. For example the same amount over 4yrs at 4% APR would cost you just £1,000, saving you £2,000 in interest over this PCP.

So my advice is to look at lower cost loan and compare actual interest amounts, not just APR.

As we are on MSE, the last question is do you need to buy a £13,750 car if you only have £1,500? Can you not buy something much cheaper without spending extra on finance interest?

foxy-stoat

£205.85 x 48 = £9,880.80 + £1,500 = £11,380.80.  If your balloon payment at the end of year 4 is £5,402.64 then your figures do add up.  Make sure you save the £110 a month for the next 4 years so you can buy it at the end.

I wouldn't buy a diesel if your only going to drive it 10,000 a year though, unless your trips are all fairly long.

sinofrench26

foxy-stoat said:

£205.85 x 48 = £9,880.80 + £1,500 = £11,380.80.  If your balloon payment at the end of year 4 is £5,402.64 then your figures do add up.  Make sure you save the £110 a month for the next 4 years so you can buy it at the end.

I wouldn't buy a diesel if your only going to drive it 10,000 a year though, unless your trips are all fairly long.

I work in the community and do trips to Dorset often.  Its a good family hatchback too.  Thats why I opted for the diesel?  Or do I need to do longer journeys?

DrEskimo

sinofrench26 said:

foxy-stoat said:

£205.85 x 48 = £9,880.80 + £1,500 = £11,380.80.  If your balloon payment at the end of year 4 is £5,402.64 then your figures do add up.  Make sure you save the £110 a month for the next 4 years so you can buy it at the end.

I wouldn't buy a diesel if your only going to drive it 10,000 a year though, unless your trips are all fairly long.

I work in the community and do trips to Dorset often.  Its a good family hatchback too.  Thats why I opted for the diesel?  Or do I need to do longer journeys?

Depends how long and how often.

Not sure I would buy a 4yr old diesel that's only done 20k miles either.

foxy-stoat

DrEskimo said:

Not sure I would buy a 4yr old diesel that's only done 20k miles either.

I just bought an 8 year old diesel with 30,000 miles - will report back if/when the thing goes poop.

As for the OP driving to Dorset often, not sure if that helps as we only know 1 side of the story.  If you can drive for say 20/30 minutes at 50-60 mph once a week then I would say the DFP wont be an issue.