PCP deal calculation help
Discussion
jw673 said:
I think with an APR of ~0.5% the car would have to be discounted to ~£30,000 (note: it's unlikely be the same 36K-pre-discount car as before - the GFV has dropped quite a bit, with only an additional 1 month on the term). Or discounted to ~£26,300@~7.2% APR.
Have you made the £5K/£280PM/38M/£15K GFV figures up? or has it been indicated to you by the dealer that they're realistic/achievable?
At ~£31,000, on the same terms as before, I'd would guess at ~£380 PM (averaged incl. £5k deposit =~£513 PM, of which ~£133 PM is interest).
Whilst it may not be 100% accurate - if you tweak the spreadsheet for the slightly longer terms (37/38 vs 36) you can play with the figures.
Yes, those are the figures I've made up - I want to see what people would think is a good deal.Have you made the £5K/£280PM/38M/£15K GFV figures up? or has it been indicated to you by the dealer that they're realistic/achievable?
At ~£31,000, on the same terms as before, I'd would guess at ~£380 PM (averaged incl. £5k deposit =~£513 PM, of which ~£133 PM is interest).
Whilst it may not be 100% accurate - if you tweak the spreadsheet for the slightly longer terms (37/38 vs 36) you can play with the figures.
From the latest quote I think they only figure that could be lowered would be the invoice price. 7.2% APR seem to remain the same throughout my different quotes.
Grandfondo said:
daemon said:
Grandfondo said:
Obviously if Audi put £8k towards the S3 then that changes things considerably! 
You said "on a £36,000 car", not on an Audi S3 And therein lies the strength of PCP deals.
He said £280pm and your's was £326 and over a longer term so wrong again!
Can you let this thread get back on track please?
Grandfondo said:
CrazyaboutCars if you put £15k down and borrow £15k over 60 months the total cost of the car will be £31.5k on a £30k car with payments of £275pm!
Then we are in agreement As I have already said a loan for a longer timeframe for the balance is the way to go on this one
Mandat said:
What's the issue with putting in a high deposit on a PCP?
I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
As per my previous post, no one has yet explained why putting a larger deposit is bad, if it results in lower monthly payments, as well as a lower overall cost of interest (since the amount being borrowed is less)?I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
If the overall cost of the PCP for the whole term is comparable to regular HP or outright cash purchase, then what is the problem?
Mandat said:
Mandat said:
What's the issue with putting in a high deposit on a PCP?
I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
As per my previous post, no one has yet explained why putting a larger deposit is bad, if it results in lower monthly payments, as well as a lower overall cost of interest (since the amount being borrowed is less)?I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
If the overall cost of the PCP for the whole term is comparable to regular HP or outright cash purchase, then what is the problem?
Mandat said:
Mandat said:
What's the issue with putting in a high deposit on a PCP?
I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
As per my previous post, no one has yet explained why putting a larger deposit is bad, if it results in lower monthly payments, as well as a lower overall cost of interest (since the amount being borrowed is less)?I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
If the overall cost of the PCP for the whole term is comparable to regular HP or outright cash purchase
, then what is the problem?
PositronicRay said:
Mandat said:
Mandat said:
What's the issue with putting in a high deposit on a PCP?
I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
As per my previous post, no one has yet explained why putting a larger deposit is bad, if it results in lower monthly payments, as well as a lower overall cost of interest (since the amount being borrowed is less)?I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
If the overall cost of the PCP for the whole term is comparable to regular HP or outright cash purchase, then what is the problem?
daemon said:
PositronicRay said:
Mandat said:
Mandat said:
What's the issue with putting in a high deposit on a PCP?
I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
As per my previous post, no one has yet explained why putting a larger deposit is bad, if it results in lower monthly payments, as well as a lower overall cost of interest (since the amount being borrowed is less)?I curently have a 3 year PCP with Audi and when working out the different cost options at the outset, the overall cost was lower with a larger deposit, since the amount being borrowed is less, therefore accruing less interest over the term.
Ultimately, the total cost will be a combination of deposit + 36 payments. Therefore in simple terms (and ignoring the cost of interest in this example), the overall cost would surely be the same with either a low deposit + high monthly payment or a high deposit + low monthly payments. At the end of the day, the same amount get paid off.
In my situation, I went for a large deposit and smaller monthly payments becuase I preferred a lower monthly liability.
If the overall cost of the PCP for the whole term is comparable to regular HP or outright cash purchase, then what is the problem?
What I was trying to say was that it is amazing how you can be blinded completely from the final goal and with a little bit of tunnel vision it's very easy just to see what you think you can afford in terms of deposit and monthly and sort of overlook something that is not going to occur until maybe 4 years down the line.
I'm pretty sure that is what is trying to be put across by everyone here, you just need to look at the big overall picture and then decide if you still think it worth going for.
I don't think in principle there is anything wrong with putting in a large deposit and paying small payments as long as you go into it totally open-minded and have the ability to do the same thing again at the end of the term.
Crazy about cars - given that you only seem to keep your cars for a relatively short time and don't intend to pay the GFV payment, why not just lease one. Appears to cost about £11k all in for 2 years. Will probably go up if you add loads of options, but they seem to be pretty well specified as standard. Putting it into perspective selling your current car would cover that cost in its entirety, leaving you 2 years to save for another deposit.
you have got to put away another £388 a month to buy the car though so that makes monthly outgoings about 1k
and you will loss 15k on the car when you sell it, there is no win with PCP
and you cannot invest at 5% net no risk with access to your money, so those comments are daft.,
get a 15k loan use the 13k you have and buy a 2 year old car for 28k it's a no brainer at £265 a month.
that will get you into a TTRS which are rock solid prices now. If you want to buy Audi.
and you will loss 15k on the car when you sell it, there is no win with PCP
and you cannot invest at 5% net no risk with access to your money, so those comments are daft.,
get a 15k loan use the 13k you have and buy a 2 year old car for 28k it's a no brainer at £265 a month.
that will get you into a TTRS which are rock solid prices now. If you want to buy Audi.
crazy about cars said:
A bit late to the party but just to let you (all) know that this website is inaccurate. It's asking you to input the guaranteed future value on the right hand side and is suggesting that you are then borrowing the price of the car, less the deposit, less the GFV. For example, if you are buying a car at £50k with a £10k deposit and £20k balloon, it's calculating the finance assuming you only borrow £20,000 (i.e £50k - £10k - 20k GFV). Of course in this instance you are actually borrowing £40,000 and interest is charged on this amount. The GFV is not an interest free lend.Grandfondo said:
Lots of ifs and buts
For the avoidance of doubt - the example I gave was based on real, albeit not exact, figures and it wasn't an S1 (although it was new release car - i.e. limited used); the principle however remains the same. I could have bought the car (for cash! yes, ooooh - look at me - a cash buyer! - where's that medal?) by removing money from my ISA, the scary PCP monsters didn't ruin my life and, having only fuel and a main dealer service to pay for (in addition to the scheduled payments), the car was returned at the end of the term without argument or charges. I did not remain in the PCP "prison", a theory to which you seem wedded, and would happily do it again if the particular deal was favourable.Mandat said:
As per my previous post, no one has yet explained why putting a larger deposit is bad
It is to the finance provider's and/or dealer's advantage to keep the deposit as small as possible while still keeping within the limits of the customer's target "monthly" figure. A smaller deposit is easier for a customer to swallow, the amount paid in interest is greater and it also allows the "keep your money in the bank and not the car" line of reasoning to be used. A smaller deposit may also illicit less responses when (some) customers realise (having not previously understood) that their "deposit" is not refundable upon the return of the vehicle, unlike their experience with other rentals, it is merely an initial payment of which they may never see again.Differences in deposit size could possibly relate to differences in the point at which you may be able to VT without additional charge (bigger deposit=earlier VT) - although given how PCPs are constructed the VT point is likely to be far later in the term than normal HP.
Mandat said:
If the overall cost of the PCP for the whole term is comparable to regular HP
There are contractual differences (VT point being one of them) between straight HP and PCP. Although it may be useful to compare total costs over the term (incl. final settlement) between HP and PCP - don't assume they're the same thing. Those contractual differences may matter if things (life/job/etc) don't work out as you intended, even more so with a lease (realistically no VT without large penalty).mrdaemon said:
you cannot invest at 5% net no risk with access to your money, so those comments are daft
Buying any 50k car is not a net no risk, with easy access, use of your money either? - so in the example given, of which is based on crazy_about_cars real (~2.9%) APR quote for a new S1 - you would take the money out of an ISA to pay for it? As you have said, repeatedly, you wouldn't buy a new car; that is not the question I am asking nor was it the point I was addressing in my example. In some cases, and whilst I know this may be hard for you to accept, some people buy (or rent, if you prefer) new cars.Unlike the anti-finance zealotry that is prevalent on PH, I am neither pro or anti PCP - it is a tool and, like any other, it can (and is) misused. I am of the belief that the larger the potential value of the loss ("penny wise, pound foolish"), and the further away it is likely to be realised, the less likely people are to give it due consideration (this fitting a first time PCPer). I suspect a large minority of people, despite having the details spelled out to them in the documentation, have little understanding of the contractual agreement they're entering into.
JetskiJezz said:
This was exactly the point I was trying to make in my earlier post, the lower monthly payments make it feel like you can afford to do the deal. If however you can't save for a new deposit alongside the monthly payments for the agreement you signed for the new ultimately get to the end of the deal without enough deposit to replace the car with something equally interesting, and without enough money to pay off the final payment.
What I was trying to say was that it is amazing how you can be blinded completely from the final goal and with a little bit of tunnel vision it's very easy just to see what you think you can afford in terms of deposit and monthly and sort of overlook something that is not going to occur until maybe 4 years down the line.
I'm pretty sure that is what is trying to be put across by everyone here, you just need to look at the big overall picture and then decide if you still think it worth going for.
I don't think in principle there is anything wrong with putting in a large deposit and paying small payments as long as you go into it totally open-minded and have the ability to do the same thing again at the end of the term.
+1What I was trying to say was that it is amazing how you can be blinded completely from the final goal and with a little bit of tunnel vision it's very easy just to see what you think you can afford in terms of deposit and monthly and sort of overlook something that is not going to occur until maybe 4 years down the line.
I'm pretty sure that is what is trying to be put across by everyone here, you just need to look at the big overall picture and then decide if you still think it worth going for.
I don't think in principle there is anything wrong with putting in a large deposit and paying small payments as long as you go into it totally open-minded and have the ability to do the same thing again at the end of the term.
Grandfondo said:
daemon said:
I dont understand your obsession with PCP and with that statement. Its meaningless :-
"Finance gets some people into cars they cant afford to own!"
"Lease gets some people into cars they cant afford to own!"
"Cash gets some people into cars they cant afford to own!"
"Buying used gets some people into cars they cant afford to own new!"
As everyone has repeatedly told you - its about working out whats right for you at the time and making sure it is right for you.
1) True"Finance gets some people into cars they cant afford to own!"
"Lease gets some people into cars they cant afford to own!"
"Cash gets some people into cars they cant afford to own!"
"Buying used gets some people into cars they cant afford to own new!"
As everyone has repeatedly told you - its about working out whats right for you at the time and making sure it is right for you.
2) true
3) False
4) True
I am not disagreeing with you!
If someone is on say £200 a week and are given, win, bonused, windfall, inherit £100,000 and go out immediately and buy a £100,000 porsche then there is a viable example of cash getting some people into a car they cant afford to own. Wouldnt you agree?
So basically ANY tool for buying a car can be misused if you do not fully understand what you are getting into.
Therefore i dont understand your obsession with PCP deals and your constant attempts to underhandedly imply that people who use them cant afford the car - which you have done directly and indirectly in the past - even though you yourself have used PCP deals, and have enquired recently about one?
All seems very odd.
daemon said:
JetskiJezz said:
This was exactly the point I was trying to make in my earlier post, the lower monthly payments make it feel like you can afford to do the deal. If however you can't save for a new deposit alongside the monthly payments for the agreement you signed for the new ultimately get to the end of the deal without enough deposit to replace the car with something equally interesting, and without enough money to pay off the final payment.
What I was trying to say was that it is amazing how you can be blinded completely from the final goal and with a little bit of tunnel vision it's very easy just to see what you think you can afford in terms of deposit and monthly and sort of overlook something that is not going to occur until maybe 4 years down the line.
I'm pretty sure that is what is trying to be put across by everyone here, you just need to look at the big overall picture and then decide if you still think it worth going for.
I don't think in principle there is anything wrong with putting in a large deposit and paying small payments as long as you go into it totally open-minded and have the ability to do the same thing again at the end of the term.
+1What I was trying to say was that it is amazing how you can be blinded completely from the final goal and with a little bit of tunnel vision it's very easy just to see what you think you can afford in terms of deposit and monthly and sort of overlook something that is not going to occur until maybe 4 years down the line.
I'm pretty sure that is what is trying to be put across by everyone here, you just need to look at the big overall picture and then decide if you still think it worth going for.
I don't think in principle there is anything wrong with putting in a large deposit and paying small payments as long as you go into it totally open-minded and have the ability to do the same thing again at the end of the term.
I know someone who is on a PCP deal for a Mini Cooper. Her payments are around £250 a month. Clearly she can't afford it as she is using a PCP to finance her new car.
Except you are wrong as her current net wealth is over 3 million and will likely double in the next 10 years....
Stick that up your jumper !
Except you are wrong as her current net wealth is over 3 million and will likely double in the next 10 years....
Stick that up your jumper !
jjr1 said:
I know someone who is on a PCP deal for a Mini Cooper. Her payments are around £250 a month. Clearly she can't afford it as she is using a PCP to finance her new car.
Except you are wrong as her current net wealth is over 3 million and will likely double in the next 10 years....
Stick that up your jumper !
Except you are wrong as her current net wealth is over 3 million and will likely double in the next 10 years....
Stick that up your jumper !
daemon said:
Grandfondo said:
daemon said:
I dont understand your obsession with PCP and with that statement. Its meaningless :-
"Finance gets some people into cars they cant afford to own!"
"Lease gets some people into cars they cant afford to own!"
"Cash gets some people into cars they cant afford to own!"
"Buying used gets some people into cars they cant afford to own new!"
As everyone has repeatedly told you - its about working out whats right for you at the time and making sure it is right for you.
1) True"Finance gets some people into cars they cant afford to own!"
"Lease gets some people into cars they cant afford to own!"
"Cash gets some people into cars they cant afford to own!"
"Buying used gets some people into cars they cant afford to own new!"
As everyone has repeatedly told you - its about working out whats right for you at the time and making sure it is right for you.
2) true
3) False
4) True
I am not disagreeing with you!
If someone is on say £200 a week and are given, win, bonused, windfall, inherit £100,000 and go out immediately and buy a £100,000 porsche then there is a viable example of cash getting some people into a car they cant afford to own. Wouldnt you agree?
So basically ANY tool for buying a car can be misused if you do not fully understand what you are getting into.
Therefore i dont understand your obsession with PCP deals and your constant attempts to underhandedly imply that people who use them cant afford the car - which you have done directly and indirectly in the past - even though you yourself have used PCP deals, and have enquired recently about one?
All seems very odd.
I am not trying to imply that everyone on a PCP can't afford it just some which as you have stated on numerous occasions can be any financial product but more so with PCP! IMO.
I have used PCP on one occasion to access discounts and then paid it off but I looked at all options to see which would work out cheaper to OWN the vehicle!
The more people protest the more it gives their position away!
Merry Xmas.
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