PCP - deposit size versus interest if settling early?

[interstellar]

I am sure there is a calculator out there and I am sure naturally you would pay more interest but does anyone know the following.

considering a pcp deal on a £45k car BMW Approved.
3 year pcp
10k mileage
8.9% apr

I am unlikely to do this as the rate is uncompetitive as Lombard are at 5.1% but its the theory of working it out I need help with, the finance company isnt that important at this stage.

I plan on selling at 18 months. As they wont be charging me full interest as I am settling early is it better to put a higher 10k deposit down or a lower say 3k deposit and keep the 7k for other possibilities away from the car (rainy day fund) or just put it towards the settlement at 18 months as car will still be in negative equity.

Is it easy to work out if It will cost £200 more in interest after 18 months or £2000. Would be good to know but I haven't a clue how to work it out.

Anyone?

[Geffg]

Not sure on wether figures stack up but as a little side, the interest rate is negotiable with Bmw as I’ve negotiated on the last few cars I’ve had. They’ve matched the pcp figures I’ve found online or through the bank. Lloyds do pcp on used cars and cheaper rate then Bmw.

[interstellar]

Geffg said:

Not sure on wether figures stack up but as a little side, the interest rate is negotiable with Bmw as I’ve negotiated on the last few cars I’ve had. They’ve matched the pcp figures I’ve found online or through the bank. Lloyds do pcp on used cars and cheaper rate then Bmw.

Thanks but since January 2021 BMW cant match or do a better deal. Its fixed for all dealers at 8.9% on used cars. I will look at Lloyds buts the main query is about calculating interest cost which I cant figure out.

[nammynake]

The bigger the deposit the lower the loan amount and therefore the lower the total interest paid. If you’re taking a loan at 8% (or even 5%) you would need to earn an equivalent return on the 7k - that is possible if you invest in shares but it’s not risk-free and your 7k could be worth substantially less after 18 months. If you need the 7k for a rainy day then keep as cash or invest in premium bonds or an ISA - both are tax free and risk free, albeit your profit will be very low at 1% or less.

[interstellar]

Yes I understand all that you are right but I still want to find out how to calculate ending early at 12-18 months to see the difference in interest monthly.

Call me curious or stupid!

[RS MOJO]

https://www.financecalcs.co.uk/

There is no definitive answer but the above is a good guide

[interstellar]

Thank you. I will take a look