glenn911C4S
Original Poster
251 posts
114 months

Anyone know a good online PCP calculator that you can alter the loan amount, rate, deposit and period?


Manks
6,810 posts
102 months

No, and be careful there is one on the Internet that doesn't add in the double interest on the balloon payment.
The only other ones I have seen want you to choose a model and give them your details so they can contact you.
If you don't find what you want email me. Having just gone through working all this out I can probably give you a formula. Though that is not as easy as using an online calculator obviously.
Manks


Dr Jekyll
6,858 posts
141 months

Manks said: No, and be careful there is one on the Internet that doesn't add in the double interest on the balloon payment.


johnfm
10,428 posts
130 months

Careful Dr Jekyll
Manks will quote the FSA at you!
OP
Just build a spreadsheet
the only tricky bit is the APR calculation
You need to build a column of cash flows (ie 20000 for the 20000 car loan, then +ve amounts for each monthly payment and the balloon at the end).
Then apply the IRR function to the cashflows. Then use the IRR to calc APR.


Manks
6,810 posts
102 months

Dr Jekyll said: Manks said: No, and be careful there is one on the Internet that doesn't add in the double interest on the balloon payment. So you don't think interest is paid on the balloon twice then no? Manks

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Dr Jekyll
6,858 posts
141 months

Manks said: Dr Jekyll said: Manks said: No, and be careful there is one on the Internet that doesn't add in the double interest on the balloon payment. So you don't think interest is paid on the balloon twice then no? Manks No. If loan A means owing an average of £500 for 12 months (EG because £1000 is paid off in instalments), and loan B means owing an average of £1000 for the same period (EG because it's a one off balloon payment), then for the same interest rate I would expect to pay twice as much interest on loan B. Not because interest is paid twice, but because I am effectively borrowing twice as much money. If you insist on regarding the interest rate as half the true rate then you have to double it to get the right figure, but that is simply a demonstration that your figure was wrong in the first place.


Manks
6,810 posts
102 months

Dr Jekyll said: Manks said: Dr Jekyll said: Manks said: No, and be careful there is one on the Internet that doesn't add in the double interest on the balloon payment. So you don't think interest is paid on the balloon twice then no? Manks No. If loan A means owing an average of £500 for 12 months (EG because £1000 is paid off in instalments), and loan B means owing an average of £1000 for the same period (EG because it's a one off balloon payment), then for the same interest rate I would expect to pay twice as much interest on loan B. Not because interest is paid twice, but because I am effectively borrowing twice as much money. Perhaps I should be more explicit. When being offered a PCP deal you will, in all probability, be quoted a flat rate. This must be applied twice to the deferred or "balloon" payment. Once to the part of the loan that is being amortised. Dr Jekyll said: If you insist on regarding the interest rate as half the true rate then you have to double it to get the right figure, but that is simply a demonstration that your figure was wrong in the first place. It is not a question of me "regarding" the interest rate as half the true rate. I am using the figure that will inevitably be quoted by the dealer in order to obtain the right answer. Manks


Dr Jekyll
6,858 posts
141 months

Manks said: It is not a question of me "regarding" the interest rate as half the true rate. I am using the figure that will inevitably be quoted by the dealer in order to obtain the right answer.
Manks No, it will be quoted by the dealer to make the rate sound lower than it really is. The fact that you have to double it to get the right answer is a clue.


Manks
6,810 posts
102 months

Dr Jekyll said: Manks said: It is not a question of me "regarding" the interest rate as half the true rate. I am using the figure that will inevitably be quoted by the dealer in order to obtain the right answer.
Manks No, it will be quoted by the dealer to make the rate sound lower than it really is. The fact that you have to double it to get the right answer is a clue. Oh for sure. But the fact remains that you need to apply the flat rate once to the amortised part of the loan and twice to the deferred payment or bubble. Which is what I said originally. Manks


sidicks
4,936 posts
101 months

Manks said: Oh for sure. But the fact remains that you need to apply the flat rate once to the amortised part of the loan and twice to the deferred payment or bubble. Which is what I said and which you apparently disagreed with.
Manks It's the same point as we are discussing on the other thread  if you use the 'proper' IRR calculation then you don't need to charge the (wrong) interest rate twice to get the right answer!! Sidicks


Manks
6,810 posts
102 months

sidicks said: Manks said: Oh for sure. But the fact remains that you need to apply the flat rate once to the amortised part of the loan and twice to the deferred payment or bubble. Which is what I said and which you apparently disagreed with.
Manks It's the same point as we are discussing on the other thread  if you use the 'proper' IRR calculation then you don't need to charge the (wrong) interest rate twice to get the right answer!! Sidicks But if you do it your way, you get the WRONG answer as you have already demonstrated. Manks


sidicks
4,936 posts
101 months

Manks said: But if you do it your way, you get the WRONG answer as you have already demonstrated.
Manks No you don't!! Why do you think you get the wrong answer? Sidicks


Manks
6,810 posts
102 months

sidicks said: Manks said: But if you do it your way, you get the WRONG answer as you have already demonstrated.
Manks No you don't!! Why do you think you get the wrong answer? Sidicks Because on page 1 of the other thread you assert: sidicks said: Ok, as has already been posted previously (hundreds of times), flat rate is meaningless, you need to use the APR to calculate the monthly payments, as this takes into account all fees etc.
With a £10k car and £1k deposit, there is £9k to finance. Effectively there are 2 parts to this agreement:  A £5000 loan (residual) on which interest is paid but no capital  A £4000 loan which is repayable over 3 years
Using an APR of 8.8% (equivalent to a monthly rate of 0.71%): The interest on the £5k loan is £35.27 per month The interest and capital repayment on the £4k loan is £126.20
This leads to a total premium of £161.47 Whereas "RS6 see you", who is a car finance broker, inputted the figures into his PCP calculator and obtained the figure: £170.70 which also tallies with the answer calculating it manually. So, your method has been demonstrated to give the incorrect answer. But as I have said on the other thread I think it is time for me to draw a line under this. I have a car to wash and enjoy in the sunshine  and you know what it hasn't got any finance on it. Manks


johnfm
10,428 posts
130 months

The 'calculation' is very very easy to create on excel.
For the example figures, if you pay £1000 deposit on day one and £170.69 per month with a £5k balloon, the APR is 8.71%.
Amount of loan 10000 admin fees 0 deposit 1000 monthly pmt 170.69 balloon 5000 eoc fees 0 interest rate 5% no opf payments 36
total repaid 11144.84 total interest 1144.84
rough monthly pmt £170.69
IRR 0.698040092662% APR 8.71


sidicks
4,936 posts
101 months

Manks said: Whereas "RS6 see you", who is a car finance broker, inputted the figures into his PCP calculator and obtained the figure: £170.70 which also tallies with the answer calculating it manually.
So, your method has been demonstrated to give the incorrect answer. My number uses the APR, which as you have said is rounded down to the lower 0.1%. By definition the actual IRR (i.e. unrounded APR) will produce the correct answer. I was being a bit lazy when I was using referring to APR rather than IRR. Given the full cashflows and a simple spreadsheet it is a trivial spreadsheet to tie up with the 'correct' answer. Sidicks PS  My car needs a wash too!


text
1 posts
27 months

For anyone looking for a quick and dirty pcp calculator online, I have one that I created here http://www.pcpcal.co.uk/ It will let you see what happens when you change the APR, deposit, final payment etc. I do not make any guarantees over it's accuracy although the model has always been within a few quid of the numbers from dealers quotes that I have had recently.


cailean
561 posts
53 months

Nice. Or you could just save up and pay cash...sorry I couldn't resist.... As you were

