help with quoted APR
Discussion
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?
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 said:
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?
Over how many years? Remember the 5.1% APR is cumulative, and depends how the interest is calculated.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?
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.
APR is the annual percentage rate
You are taking the car over 3 annual periods, therefore your total interest will be more than one lot of the annual interest.
Add to that the fun bit that everyone forgets about PCP's. The final payment attracts the 5.1% interest the entire way through.
You are taking the car over 3 annual periods, therefore your total interest will be more than one lot of the annual interest.
Add to that the fun bit that everyone forgets about PCP's. The final payment attracts the 5.1% interest the entire way through.
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.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.
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'!!
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
The monthly interest rate will be 5.1/1200, or .00425% of the total outstanding balance. Your first monthly payment therefore will include £96 of interest, which then reduces each month as the capital outstanding reduces.
If you run that through to the end the total interest payable works out spot on. Can be calculated in Excel if you known how to do CUMIPMT and CUMPRINC formulas.
If you run that through to the end the total interest payable works out spot on. Can be calculated in Excel if you known how to do CUMIPMT and CUMPRINC formulas.
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