Help me get my head around finance .....

Help me get my head around finance .....

Author
Discussion

scotlandtim

Original Poster:

320 posts

129 months

Thursday 1st June 2017
quotequote all
Hi Folks.

Our Zoe goes back in a month, end of PCP deal, while its been great being electric, we're not too impressed by either the Zoe, Renault customer services or too taken by a PCP so we've decided to buy a second hand leaf in its place.

We've found a car we like - on the forecourt at £8,500

If we take a finance deal we can pay:

Deposit £500
36 x £111.88 = 4027.68
Final Payment £ 2137.50

Means we can own the car for £ 6664.50.

We have to take some sort of finance deal to get the contribution from Nissan / dealer to bring the price down. Not a problem.

We then have the option of repaying the PCP immediately if we wish. Here's the tricky bit.

We aren't cash rich at the moment, so need to borrow most of the money one way or the other. The PCP is at 3.9% - my maths puts the total interest over the 3 yr period at £157.07 - am I right here?

I have the option of paying off the finance with a credit card then moving it to a 0% interest for 24months card. Is there any point in this other than saving the £157.07 on interest. Am I missing something here.

Not been involved much in finance before. Any advice / experience appreciated.

Many thanks

rsbmw

3,464 posts

106 months

Thursday 1st June 2017
quotequote all
Doesn't sound right that you can pay £6.5k for the £8.5k car.

Equally, moving it to CC makes little sense, there will be a fee of probably 2.5% that will balance out the interest

scotlandtim

Original Poster:

320 posts

129 months

Thursday 1st June 2017
quotequote all
Does seem a bit odd to get it for so much less than list, but I've talked the figured through with the salesman - and it seems to be right.

Agree - if I've got my numbers right regarding the interest then not much point moving it to CC. Thanks

Scootersp

3,213 posts

189 months

Thursday 1st June 2017
quotequote all
Triple check that 'final payment' figure isn't the Guaranteed Minimum Future Value

AyBee

10,555 posts

203 months

Thursday 1st June 2017
quotequote all
Something not right - ask the salesman "so I'm paying £6.5k for a car advertised at £8.5k?", and watch his face carefully...

DuraAce

4,241 posts

161 months

Thursday 1st June 2017
quotequote all
£6.5k car marked upto £8.5k then discounted to £6.5k to make you think you are getting a bargain?

What car/model/year/mileage is it?

Saleen836

11,150 posts

210 months

Thursday 1st June 2017
quotequote all
Does the price include the batteries or do you have to lease them seperately?

ClaphamGT3

11,339 posts

244 months

Thursday 1st June 2017
quotequote all
Bear in mind that Some dealers/OEM finance companies won't take credit card payments for that amount of money

Jon39

12,897 posts

144 months

Thursday 1st June 2017
quotequote all

DuraAce said:
£6.5k car marked upto £8.5k then discounted to £6.5k to make you think you are getting a bargain?

You cannot blame retailers for doing this though.
We have just seen above that it does work, until you kindly pointed out how the magic trick works.

Remember the 'Buy one get one free' offers?
People really thought they were paying only £1 for two products priced at £1 each.
They should have looked at the product price a few weeks earlier. It would have been about 55 pence each.

The topic title is apt, but good on OP for asking others.




Edited by Jon39 on Thursday 1st June 16:16

Sheepshanks

32,982 posts

120 months

Thursday 1st June 2017
quotequote all
scotlandtim said:
The PCP is at 3.9% - my maths puts the total interest over the 3 yr period at £157.07 - am I right here?
The interest amount seems too low - but as I presume the rate quoted is APR I don't think it can be easily worked out. You have to pay interest on the final payment for the whole 3yrs.

The interest charge should be stated on the quotation. How much is the contribution from Nissan (and/or the dealer)?

If it really is £157 then that's only £4/mth. For that much it doesn't seem worth messing about and, you never know, the ability to walk away at the end might be useful.

rsbmw

3,464 posts

106 months

Thursday 1st June 2017
quotequote all
interest is approx £470 over the 3 year term.

I can't see why they would discount the car by £2300 in order to make £500 in interest. Something is wrong.

eyebeebe

3,005 posts

234 months

Thursday 1st June 2017
quotequote all
What is the value being financed, as it isn't £8,500 and how does that compare to similar cars on the market? I'm out of touch with the UK market, but 3.9% APR seems reasonable.

scotlandtim

Original Poster:

320 posts

129 months

Friday 2nd June 2017
quotequote all
Thanks all.

It does seem like i'm getting a good deal here. Nother cars i UK siilar spec for price. The lost £2000 seems to be related to nisan and dealers contributions when taking out a finance package.

Pressing forward with it - watch this space!

TooLateForAName

4,764 posts

185 months

Friday 2nd June 2017
quotequote all
What are the car details?

The big gotcha on a leaf would be FLEX/battery lease - is it leased battery?

scotlandtim

Original Poster:

320 posts

129 months

Friday 2nd June 2017
quotequote all
nope - its an owned battery!

TooLateForAName

4,764 posts

185 months

Friday 2nd June 2017
quotequote all
And gen 1 or gen 2?

disadvantages of gen1 are electric handbrake and the batteries seem to be less resilient than gen2.

scotlandtim

Original Poster:

320 posts

129 months

Friday 2nd June 2017
quotequote all
It's a Gen 2 -13 plate.

Thanks

TooLateForAName

4,764 posts

185 months

Friday 2nd June 2017
quotequote all
In that case £6.5 is a bit of a steal (assuming decent battery/not write off/etc)