My finance quote looks suspect
benanderson89
Posts: 4 Newbie
Hi everyone!
I'm looking at an ex-demonstrator Kia Stinger GTS. It's only £32,995 from my local dealership which should make it easily affordable for me. That's a whopping £8,185 below list for a car with only 1800 miles on it.
However, it looks like the dealership are taking me for a ride because the monthly figure they came back with is shockingly high.
On a £32,995 car with a £4000 deposit and an extra £784.18 equity in my old car, I was quoted £501.59 per calendar month (£551 originally with a £3k deposit and £700 worth of paint protection and "jencare", whatever that is). To put that into perspective, a new Kia Stinger GTS with a £8,185 deposit to match the ex-demo discount is £526.24 according to the Kia website.
To break-down the figures they've given me:
That's a loan amount of £13,284.32. Surely it shouldn't be over £500 a month! Have they pushed in some cheeky extras without telling me? I've not signed anything (thus I've not received a complete breakdown of costs), but these figures seem suspect. If I build a new Stinger GTS and put down a deposit of £12,185 (deposit + difference from the used car) I end up with a monthly figure of around £450. Where did the extra £50 to £100 come from?
Have I messed something up in my calculations or is there something sneaky going on? Is there a car dealer on these forums willing to give me a layman's explanation as to why its so expensive?
Thank You!
I'm looking at an ex-demonstrator Kia Stinger GTS. It's only £32,995 from my local dealership which should make it easily affordable for me. That's a whopping £8,185 below list for a car with only 1800 miles on it.
However, it looks like the dealership are taking me for a ride because the monthly figure they came back with is shockingly high.
On a £32,995 car with a £4000 deposit and an extra £784.18 equity in my old car, I was quoted £501.59 per calendar month (£551 originally with a £3k deposit and £700 worth of paint protection and "jencare", whatever that is). To put that into perspective, a new Kia Stinger GTS with a £8,185 deposit to match the ex-demo discount is £526.24 according to the Kia website.
To break-down the figures they've given me:
- Vehicle Price: 32,995.00
- Add Road Tax: 450.00
- Equity: 784.18
- Deposit: 4,000.00
- Final Value: 15,376.50
- 36 months
That's a loan amount of £13,284.32. Surely it shouldn't be over £500 a month! Have they pushed in some cheeky extras without telling me? I've not signed anything (thus I've not received a complete breakdown of costs), but these figures seem suspect. If I build a new Stinger GTS and put down a deposit of £12,185 (deposit + difference from the used car) I end up with a monthly figure of around £450. Where did the extra £50 to £100 come from?
Have I messed something up in my calculations or is there something sneaky going on? Is there a car dealer on these forums willing to give me a layman's explanation as to why its so expensive?
Thank You!
0
Comments
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The interest rate is very high. It usually is on second hand cars.
You will be paying £38,217.92 for the car (less road tax)
As you say a new one is £40,000, there will be a manufacturers contribution of a couple of thousand to take the PCP, and the finance will be zero % or close to it, so a new one is near enough the same price.
PCP is not the way to get a second hand car, you want to be paying cash for it, with a low % loan from somewhere to get it for close to the £33K.
You wonder how they sell nearly new cars tbh....I want to go back to The Olden Days, when every single thing that I can think of was better.....
(except air quality and Medical Science
)0 -
Thank you! They never did tell me the interest rate and it was silly of me to assume it would be the same as a new car (which is 4.9%).
With that in mind, is getting a bank loan for the £13,284.32 and leaving the final value floating a good idea? I know some brands will let you pay a lump-sum up front. I think its called an advanced rental?0 -
benanderson89 wrote: »Hi everyone!
I'm looking at an ex-demonstrator Kia Stinger GTS. It's only £32,995 from my local dealership which should make it easily affordable for me. That's a whopping £8,185 below list for a car with only 1800 miles on it.
However, it looks like the dealership are taking me for a ride because the monthly figure they came back with is shockingly high.
On a £32,995 car with a £4000 deposit and an extra £784.18 equity in my old car, I was quoted £501.59 per calendar month (£551 originally with a £3k deposit and £700 worth of paint protection and "jencare", whatever that is). To put that into perspective, a new Kia Stinger GTS with a £8,185 deposit to match the ex-demo discount is £526.24 according to the Kia website.
To break-down the figures they've given me:- Vehicle Price: 32,995.00
- Add Road Tax: 450.00
- Equity: 784.18
- Deposit: 4,000.00
- Final Value: 15,376.50
- 36 months
That's a loan amount of £13,284.32. Surely it shouldn't be over £500 a month! Have they pushed in some cheeky extras without telling me? I've not signed anything (thus I've not received a complete breakdown of costs), but these figures seem suspect. If I build a new Stinger GTS and put down a deposit of £12,185 (deposit + difference from the used car) I end up with a monthly figure of around £450. Where did the extra £50 to £100 come from?
Have I messed something up in my calculations or is there something sneaky going on? Is there a car dealer on these forums willing to give me a layman's explanation as to why its so expensive?
Thank You!
As has been said, your issues are :-- The APR is likely to be scandalously high on a used car on a PCP deal
- You do actually pay interest on the residual value.
There are other factors you need to bear in mind :-- The residual value will be lower when you buy a used car than if you buy a new car (any chance its late 2017 reg?)
- New car PCP deals are often incentivised with low APR rates and deposit contributions
What you're falling foul of with the KIA Stinger is that although the headline list price compares favourably with say a new BMW 440i M Sport, KIA dont do much in the way of discounts, so a 440i M Sport may list at £43K, discounted it can be bought for £33,290 from a broker.0 -
benanderson89 wrote: »Thank you! They never did tell me the interest rate and it was silly of me to assume it would be the same as a new car (which is 4.9%).
With that in mind, is getting a bank loan for the £13,284.32 and leaving the final value floating a good idea? I know some brands will let you pay a lump-sum up front. I think its called an advanced rental?
No i dont think you can do that.
You'd need to either
(a) get a bank loan for the full amount funded over a longer time but at a much lower APR
(b) Price a new car out as i dont think it will be much more expensive with the same deposit.
£500-£550 a month will PCP you an awful lot of new car for a lot of manufacturers0 -
benanderson89 wrote: »Hi everyone!
I'm looking at an ex-demonstrator Kia Stinger GTS. It's only £32,995 from my local dealership which should make it easily affordable for me. That's a whopping £8,185 below list for a car with only 1800 miles on it.
With respect, i think thats a 2017 car, so its not comparing apples with apples.
Also, you can buy a 2017 340i or 440i from around £25K from a BMW main dealer. Whilst you may not want a BMW its a rival (and arguably better car) than the KIA and an awful lot cheaper.0 -
So the new one works out about £5k more over the term of the finance than the used one.benanderson89 wrote: »However, it looks like the dealership are taking me for a ride because the monthly figure they came back with is shockingly high.
On a £32,995 car with a £4000 deposit and an extra £784.18 equity in my old car, I was quoted £501.59 per calendar month (£551 originally with a £3k deposit and £700 worth of paint protection and "jencare", whatever that is). To put that into perspective, a new Kia Stinger GTS with a £8,185 deposit to match the ex-demo discount is £526.24 according to the Kia website.
No, it is not... You are borrowing ~£28.5k.To break-down the figures they've given me:- Vehicle Price: 32,995.00
- Add Road Tax: 450.00
- Equity: 784.18
- Deposit: 4,000.00
- Final Value: 15,376.50
- 36 months
You're then repaying ~£18k over the course of the 3yrs, then ~£15.5k at the end. You are paying interest on the ~£15.5k for the entire term, because you've borrowed that money for the entire term. The other ~£13k that you borrow is reducing over the term, with interest payable on the amount of it that's left. The ~£5k difference between ~£13k borrowed and ~£18k repaid is the interest on the entire ~£29k.
Playing with a PCP calculator suggests an APR of about 7% for that monthly repayment.Surely it shouldn't be over £500 a month!0 -
Looked at another way, assuming that you send it back after 3 years, you will be paying £4784.18 + 36x£501.59 = £22,841.42 to hire a second hand car for 3 years.I want to go back to The Olden Days, when every single thing that I can think of was better.....
(except air quality and Medical Science)0 -
What!!!8217;s that going to be worth in 3 years!!!0
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