help with quoted APR

[Misaps]

I've ordered a new Tiguan SEL 2.0 Tsi, which is being built this week and hope to be picking up early April. VW quoted a PCP price with them inputting £1250 towards the cost.

The figures are as follows:

Cash Price - £30950.00
Advance Payment - £8250.00 (£7000 from me £1250 from them)
Balance of cash price / amount of credit - £22700.00
Charges - £2901.00

Balance - £25601.00

35 monthlies of - £264.10
Final payment of - £16357.50
purchase fee with final - £10.00

Total amount payable £33861.00

APR 5.1%

For the life of me I cannot work out how the charges of £2901.00 add up to 5.1% (more like 12%). Can anyone far more intelligent than me when it comes to figures explain how they claim the stated APR please?

[Misaps]

Mammasaid said:

Over how many years? Remember the 5.1% APR is cumulative, and depends how the interest is calculated.

Normally on loans, the interest rate is converted into a monthly rate and this is applied to the outstanding balance every month.

I'm sure that someone will be along who can tell you the correct answer shortly.

As I said 35 monthlies = 3 years.

I understand to some extent but couldn't figure out the actual maths involved.....seems like my dealer doesn't either but is able to say 'it's what the VW finance calculator says'!!

[Misaps]

steve-5snwi said:

Are you trying to calculate it on the amount borrowed or on the whole amount? PCP is calculated differently to HP.

I was just trying to work out the math involved in my repayment over the term given, as much as I tried I couldn't see how the monthly figure and more importantly how the charges from 3 years amount to £2,901.00.

No big shakes as I intend to cancel within 14 days and pay off the whole lot anyway, thus avoiding the charges but gaining there generosity Guess I'm just trying to while away the time before I can my new car!

Thanks for your replies

[Misaps]

Thanks all for helping to fully understand how they reach the figures