Car PCP and deposits on them

[After_Shock]

sidicks said:

Priceless!

Edited by sidicks on Sunday 8th March 19:21

You can borrow money for a 12 month period, not pay 1 payment in 12 months which is the example you are wishing to use, hence keep it in real terms.

[sidicks]

After_Shock said:

You can borrow money for a 12 month period, not pay 1 payment in 12 months which is the example you are wishing to use, hence keep it in real terms.

Yes you can.

[After_Shock]

sidicks said:

No, as explained earlier, due to the timing of payments. The same APR means that both deals would offer equal value, but due to the nature of the PCP the total amount payable for the PCP would be more.

Edited by sidicks on Sunday 8th March 18:22

So just to remind me, your stating above you pay more on the PCP deal as in a total amount payable, but due to the timing of the payments the same APR would equal better value? But your paying more back to the bank.............

[sidicks]

After_Shock said:

So just to remind me, your stating above you pay more on the PCP deal as in a total amount payable, but due to the timing of the payments the same APR would equal better value? But your paying more back to the bank.............

Yes.

PS - you mean "you're" not "your"...

[After_Shock]

sidicks said:

Yes you can.

From a car dealership? Nope, so lets keep comparing apples with oranges then just to prove a point. How many people are happy physically having to pay back a single large payment after a period of time? Probably not many which are either happy or actually able to afford to.

[sidicks]

After_Shock said:

From a car dealership? Nope, so lets keep comparing apples with oranges then just to prove a point. How many people are happy physically having to pay back a single large payment after a period of time? Probably not many which are either happy or actually able to afford to.

A minute ago you argued that people could shop around and didn't have to take finance from the car dealership....

Keep wriggling!!

[After_Shock]

sidicks said:

Yes.

PS - you mean "you're" not "your"...

Haha its getting to that level then.

Anyways its late in the middle east, im calling it a night.

As of tomorrow I shall start advising my customers to re-pay the largest amount possible back to the banks due to the APR being lower, great advice thank you, that will certainly help them get out of the car and into a new one in 3 or 4 years time.

[sidicks]

After_Shock said:

Haha its getting to that level then.

After making the same mistake in almost every post you've made, I thought I'd help you out!

After_Shock said:

Anyways its late in the middle east, im calling it a night.

After_Shock said:

As of tomorrow I shall start advising my customers to re-pay the largest amount possible back to the banks due to the APR being lower, great advice thank you, that will certainly help them get out of the car and into a new one in 3 or 4 years time.

Now, having lost the argument and demonstrating your ignorance on finance, you are resorting to mis-representing what I've said.

How predictable.

Edited by sidicks on Sunday 8th March 19:36

[Dr Jekyll]

After_Shock said:

So just to remind me, your stating above you pay more on the PCP deal as in a total amount payable, but due to the timing of the payments the same APR would equal better value? But your paying more back to the bank.............

But you're paying it back later. I could give an example but then you would say the example is irrelevant because it doesn't match an available car finance deal.

Put it this way. Borrow money on a 5% APR and invest it, dipping into the investment to make repayments, and the investment needs to return > 5% a year to cover the repayments and have anything left over. That's what 5% APR means. Borrow at 4% APR and you have more money left from the same investment. If the payments on the 4% deal are further in the future (EG large balloon at the end) then the total payable may be higher. But because of the timing difference you still have more of your investment left at the end, so it's better value.

Total amount is relevant, size of payments is relevant, but the APR tells you how expensive the loan is.

[Ari]

After_Shock said:

You can borrow money for a 12 month period, not pay 1 payment in 12 months which is the example you are wishing to use, hence keep it in real terms.

As an aside, because it doesn't change the facts that Siddicks is trying to demonstrate, yes you can.

Ford, if I recall correctly, used to offer a single deferred payment, may stil do.

But what Siddicks is doing is using exaggerated examples to try and make the point easier to understand.

In other words, imagine someone saying that it is no harder to park a big car than a small one. You say it is, and to demonstrate the point you say 'Imagine trying to park a double decker bus in Sainsburys car park, clearly it would be more difficult because, as an object, it is larger'.

That would be a good example or using an extreme analogy. Now depending on the person you are arguing with they might say 'ah yes, I see what you mean' or they might say 'well that's stupid cos I don't have a bus driving licence'.

It would depend on whether their intention was to understand the other's point, or argue for the sake of it I guess.

[sidicks]

Ari said:

As an aside, because it doesn't change the facts that Siddicks is trying to demonstrate, yes you can.

Ford, if I recall correctly, used to offer a single deferred payment, may stil do.

But what Siddicks is doing is using exaggerated examples to try and make the point easier to understand.

In other words, imagine someone saying that it is no harder to park a big car than a small one. You say it is, and to demonstrate the point you say 'Imagine trying to park a double decker bus in Sainsburys car park, clearly it would be more difficult because, as an object, it is larger'.

That would be a good example or using an extreme analogy. Now depending on the person you are arguing with they might say 'ah yes, I see what you mean' or they might say 'well that's stupid cos I don't have a bus driving licence'.

It would depend on whether their intention was to understand the other's point, or argue for the sake of it I guess.

[TVR1]

After_Shock said:

Poor advice by my ROFL, no as ive already said people who purchase these products get stuck into the minds that they get back the deposit that they put in, regardless of how much advice you give people that's what they expect, hence they are never happy come the end and the deposit has vanished.

Im not struggling to understand anything I fully understand how it all works, as ive already said yes more deposit = less interest due to a lower monthly payment, however in the real world people through a chunk of cash in expecting it to somehow re-appear at the end and when it doesn't they are left in a position without such a big deposit again, regardless of what advice is given.

However the interest savings you are banging on about are not as vast you probably make out, due to the fact that the GMFV is a fixed amount, as this doesn't reduce with time neither does the interest calculated on it. Throwing big deposits into HP reduces interest significantly, its not such a saving on PCP is it?

Banging your head against a brick wall on this thread my friend.

[sidicks]

TVR1 said:

Banging your head against a brick wall on this thread my friend.

He knows even less than you!!

[TVR1]

sidicks said:

He knows even less than you!!

I'll ask ask a direct question then;

Are you aware of how PCP finance agreements are calculated?

Yes or No?

[sidicks]

TVR1 said:

I'll ask ask a direct question then;

Are you aware of how PCP finance agreements are calculated?

Yes or No?

I've already provided examples.

Whereas to date, this is your contribution:

TVR1 said:

Like it or not, the best and lowest cost way overall with a PCP is low deposit.

and

TVR1 said:

On a typical 42 month PCP for every £1000 more or less, your payments change by approximately £29. Can you see why it's a bad idea to put in thousands more to reduce your payments by such a small amount-especially if that deposit is greater than 10-15% as thats money you can kiss goodbye.

Edited by sidicks on Sunday 8th March 20:48

[Grandfondo]

sidicks said:

Ari said:

As an aside, because it doesn't change the facts that Siddicks is trying to demonstrate, yes you can.

Ford, if I recall correctly, used to offer a single deferred payment, may stil do.

But what Siddicks is doing is using exaggerated examples to try and make the point easier to understand.

In other words, imagine someone saying that it is no harder to park a big car than a small one. You say it is, and to demonstrate the point you say 'Imagine trying to park a double decker bus in Sainsburys car park, clearly it would be more difficult because, as an object, it is larger'.

That would be a good example or using an extreme analogy. Now depending on the person you are arguing with they might say 'ah yes, I see what you mean' or they might say 'well that's stupid cos I don't have a bus driving licence'.



It would depend on whether their intention was to understand the other's point, or argue for the sake of it I guess.

Land rover also did/do 50% deposit 50% after 2 years!

[okgo]

TVR1 said:

I'll ask ask a direct question then;

Are you aware of how PCP finance agreements are calculated?

Yes or No?

Please just stop.

You've been done.

[Sheepshanks]

sidicks said:

If I borrow £10,000 and pay this back in 1 years' time at an APR of 5% then the total amount payable is £10,500
If I borrow £10,000 and pay £5,000 after 1 day and £5,400 after 1 year then the total amount payable is 'only' £10,400 but the APR is 8.0%

Which do you think offers the best deal??

The average punter's head would probably explode that the lower overall cost deal has the higher APR.

I don't think APR is helpful to ordinary people - discussions on alternative uses for the money, opportunity cost etc, are close to absurd. All they need to do is look for the lowest total amount payable.

[sidicks]

Sheepshanks said:

The average punter's head would probably explode that the lower overall cost deal has the higher APR.

That does not make them immune to the importance of it.!

Sheepshanks said:

I don't think APR is helpful to ordinary people - discussions on alternative uses for the money, opportunity cost etc, are close to absurd.

In what way are 'ordinary people' unaffected by the rules of finance?

Sheepshanks said:

All they need to do is look for the lowest total amount payable.

Which is often wrong for the reasons explained previously...

[Dr Jekyll]

sidicks said:

In what way are 'ordinary people' unaffected by the rules of finance?

I suspect what they mean is 'ordinary people are too stupid to understand finance so it's easy to convince them that low deposits save money'

This doesn't explain why they insist that low deposits are genuinely cheaper for the customer though.