PCP Maths question.....

[V8 Stang]

The simple answer is i am a donut for getting a large PCP before getting a Mortgage, but thats for another day!
So i now need to reduce my monthly PCP amount in order to get the mortgage amount that i need.

The PCP company (Motonova) allow lump payments to reduce the monthly payment.

The deal is 29 months remaining, £466 a month, then £16043 balloon at the end.
Current balance is £29,559 or £23,931 if i settled the entire amount now, so there is a significant amount of interest involved.

At the moment it is £466 a month, and the interest rate is 10.1% / 12.9%APR.

So the question is if i was to do a lump payment of £10,000, what would my monthly payment be?

I cant get my head around the interest element that would be saved by the lump settlement.


So if anyone can work this out roughly, that would be great!

[interstellar]

I can’t work it out but why don’t you sell the car, clear the Finance and buy a cheaper one?

[V8mate]

You bought a thirty-odd grand car at 12.9% APR?

'Donut' doesn't even begin to cover it.

[V8 Stang]

interstellar said:

I can’t work it out but why don’t you sell the car, clear the Finance and buy a cheaper one?

Because i like the car too much

V8mate said:

You bought a thirty-odd grand car at 12.9% APR?

'Donut' doesn't even begin to cover it.

Lets just say my heart bought the car not my head, the sales women probably pissed herself laughing when i left.

The intention after getting a mortgage is to get a loan to pay the rest off.

[tighnamara]

V8 Stang said:

Lets just say my heart bought the car not my head, the sales women probably pissed herself laughing when i left.

The intention after getting a mortgage is to get a loan to pay the rest off.

Absolutely no help (sorry) at all but as this is PH what is the car you bought ?

[Sheepshanks]

I think (but not sure) you can't change the final payment - so you're stuck with paying interest on that amount until the end of the deal.

If that's true, then very roughly, I reckon if you put £10K into the deal, it would drop your monthly payments to around £60/mth. You'd save around £1300 in interest.

[V8 Stang]

tighnamara said:

Absolutely no help (sorry) at all but as this is PH what is the car you bought ?

2017 Mustang GT

Sheepshanks said:

I think (but not sure) you can't change the final payment - so you're stuck with paying interest on that amount until the end of the deal.

If that's true, then very roughly, I reckon if you put £10K into the deal, it would drop your monthly payments to around £60/mth. You'd save around £1300 in interest.

Yes i dont want to touch the balloon, just the monthly payment.

That looks great, thanks!

By paying this, i will only have a 5% mortgage deposit so that will be around 1% more, but gives almost £30K extra i can mortgage, and i think better off overall.

Will get onto the finance company on Monday and see what they say.

[LosingGrip]

Have a look and see if you can get a loan at a lower rate?

I was with the same finance company (10.8% as well I think). Got a loan with Nationwide and it's now at 3.2%. Loan will be paid off in four years rather than five (and makes it easier if I want to sell it etc).

[trowelhead]

V8 Stang said:

The simple answer is i am a donut for getting a large PCP before getting a Mortgage, but thats for another day!
So i now need to reduce my monthly PCP amount in order to get the mortgage amount that i need.

The PCP company (Motonova) allow lump payments to reduce the monthly payment.

The deal is 29 months remaining, £466 a month, then £16043 balloon at the end.
Current balance is £29,559 or £23,931 if i settled the entire amount now, so there is a significant amount of interest involved.

At the moment it is £466 a month, and the interest rate is 10.1% / 12.9%APR.

So the question is if i was to do a lump payment of £10,000, what would my monthly payment be?

I cant get my head around the interest element that would be saved by the lump settlement.


So if anyone can work this out roughly, that would be great!

Hi mate,

Have a play around with this

https://www.carwow.co.uk/pcp-calculator

From my calcs - if you put another 10k in payments would be £90 a month

You'll get more accurate results if you dig out the paperwork and put accurate figures into the calculator until you matched your current deal (deposit/payments all match up) then add another 10k into the deposit and that will give you a rough idea


As other say though - get a loan to refinance thats a mental interest rate.

Very nice car though btw!!

Edited by trowelhead on Saturday 4th January 23:23

[Heres Johnny]

V8 Stang said:

The deal is 29 months remaining, £466 a month, then £16043 balloon at the end.
Current balance is £29,559 or £23,931 if i settled the entire amount now, so there is a significant amount of interest involved.

At the moment it is £466 a month, and the interest rate is 10.1% / 12.9%APR.

So the question is if i was to do a lump payment of £10,000, what would my monthly payment be?

My simple maths, 24k to clear the lot, 12k would clear half of it, so you’d then pay half the monthlies or £233 a month on the other half. You suggested paying 10k so you’d have a bit more than half left to pay, so maybe £250.

[Butter Face]

Heres Johnny said:

My simple maths, 24k to clear the lot, 12k would clear half of it, so you’d then pay half the monthlies or £233 a month on the other half. You suggested paying 10k so you’d have a bit more than half left to pay, so maybe £250.

No, as it’s PCP the balloon doesn’t get touched by early repayment and you haven’t taken into account the interest.

I don’t think MotoNovo would actually accept a £10k overpayment at this stage, it would too much compared to the outstanding balance.

OP’s best bet is to take his £10k, get a loan for £14k at a much lowe rate and settle the whole agreement with MotoNovo.

Edited by Butter Face on Sunday 5th January 07:12

[Sheepshanks]

His aim is get the monthly payment down - if he replaces the PCP with a straight loan, even at a much lower interest rate, then his monthlies will go up.

[M4cruiser]

OP, take a helicopter view on what you're doing!

You are in debt, you want to splash out a lump sum so you can get deeper into debt.

Er .... something's not right. Get a shed, there's a thread about it.

[Butter Face]

Sheepshanks said:

His aim is get the monthly payment down - if he replaces the PCP with a straight loan, even at a much lower interest rate, then his monthlies will go up.

I assumed he has £10k cash.

£24k (or whatever the settlement is) - £10k cash = £14k to borrow, get that at 4.9% APR it will be cheaper than where he is now.

[craigjm]

If he gets a loan now as suggested then that will lower his credit score because it will be a new search and new credit which may impact on the mortgage he is offered. There are only really two solutions here, pay the lump sum into the deal or sell the car. With both he would need to then wait for the system to catch up before he would be offered a mortgage in the amount that he needs

[Butter Face]

Butter Face said:

Sheepshanks said:

His aim is get the monthly payment down - if he replaces the PCP with a straight loan, even at a much lower interest rate, then his monthlies will go up.

I assumed he has £10k cash.

£24k (or whatever the settlement is) - £10k cash = £14k to borrow, get that at 4.9% APR it will be cheaper than where he is now.

And to add. The closest I can get on my system is £28k sale price, £2k deposit, 9.9% APR = £453.85 + OFP of £15850.80 = Total payable £34189.40.

If the OP had borrowed £25k @ 2.9% APR over 60m his payments would have been around £447pm. He could have changed the car after 36m owing about £10700 (minus an interest rebate).Total payable (over 60m including the £3k he would have needed upfront) of £29861.40.

[Butter Face]

craigjm said:

If he gets a loan now as suggested then that will lower his credit score because it will be a new search and new credit which may impact on the mortgage he is offered. There are only really two solutions here, pay the lump sum into the deal or sell the car. With both he would need to then wait for the system to catch up before he would be offered a mortgage in the amount that he needs

Maybe. But on the other side, he will be borrowing a lot less than he owes now, so his overall debt exposure would be less (but let's not get into the secured/unsecured debt side of things!)

[Sheepshanks]

Butter Face said:

I assumed he has £10k cash.

£24k (or whatever the settlement is) - £10k cash = £14k to borrow, get that at 4.9% APR it will be cheaper than where he is now.

Only if he slightly extends the term. Anyway he wants the monthlies to be a lot less.

If he ditches the PCP he’s also taking on the residual risk.

[DonkeyApple]

Also focus on the 25 year property debt that your looking to take on. The rate on that is probably going to rape you more than the very rapey car debt you currently have. And that’s before you take into account you’ve probably been steered into two year rollovers so you’re going to get raped for fees every two years.

In short, you’re current plan is basically built around you demanding to be bummed every day for the next 25 years. . Who really wants to be the princess in the prison block?

Ditch the house, enjoy the car and consider which one you want when the balloon is due. Or ditch the car. Paying 12% on a 3 year deal is shocking enough but the premium on your mortgage rate as a result of that existing debt is going to be much worse as it is based on a much larger sum over a period ten times as long.

[gangzoom]

V8 Stang said:

I cant get my head around the interest element that would be saved by the lump settlement.


So if anyone can work this out roughly, that would be great!

Have you just called the finance company and asked? I think they cannot stop you overpaying, you can even overpay the whole amount with only 2 month interest penalty I believe.