Stupid question, can someone explain this finance to me?
Discussion
Ok, so i've never had a car on finance in my life, and it confuses me a little. I've spent weeks and weeks searching for the right 330d, to buy outright at about £15k. Have been totally unsuccessful, however if i nudge towards a nearly new car, i can easily find whatever spec in whatever colour i want.
So, i found a car, 2011 plate priced at £26790 with about 800 miles on the clock. I tap into the finance calculator £12000, and it gives me an error, stating the max i can have is £10716. Why?
Here's the quotation below.
Why is there an excess mileage charge? Its my car im paying for, it's not a lease car, so i dont understand that at all.
Am i right in saying that with £10716 paid, i get the car, then pay £221 for the next 23 months? What happens at the end of the 23 months?
After typing all this out, it seems probably to be an expensive and bad idea for me, and i would probably be best waiting even longer for a cheaper, older, correct spec car to come along, but if anyone can enlighten me, it would be appreciated.
So, i found a car, 2011 plate priced at £26790 with about 800 miles on the clock. I tap into the finance calculator £12000, and it gives me an error, stating the max i can have is £10716. Why?
Here's the quotation below.
Why is there an excess mileage charge? Its my car im paying for, it's not a lease car, so i dont understand that at all.
Am i right in saying that with £10716 paid, i get the car, then pay £221 for the next 23 months? What happens at the end of the 23 months?
After typing all this out, it seems probably to be an expensive and bad idea for me, and i would probably be best waiting even longer for a cheaper, older, correct spec car to come along, but if anyone can enlighten me, it would be appreciated.
Edited by Wafflesmk2 on Friday 6th April 21:03
The max deposit is because the calculator is formatted that way.
The extra mileage charge is because the final value is worked out on the agree mileage, any extra at the end of the term costs you extra on top of the GFV.
You can adjust it for more miles but the calculator is just a rough guide you really need to sit down in a dealership to get a bespoke quote for your needs and to have the details explained to you.
The extra mileage charge is because the final value is worked out on the agree mileage, any extra at the end of the term costs you extra on top of the GFV.
You can adjust it for more miles but the calculator is just a rough guide you really need to sit down in a dealership to get a bespoke quote for your needs and to have the details explained to you.
12% apr sounds a bit high to me.... Only 6% here for up to 15k: http://money.marksandspencer.com/loans/car-buying-...
Its giving you an option to purchase figure suggesting its a lease purchase arrangement.
Hence the mileage element.
With such a substantial deposit you should have no problem financing that vehicle on a conventional HP basis.
And 11.61% is a poor rate. Shop around more.
If they can't do better. walk away and find another.
Hence the mileage element.
With such a substantial deposit you should have no problem financing that vehicle on a conventional HP basis.
And 11.61% is a poor rate. Shop around more.
If they can't do better. walk away and find another.
You are paying £10,716 as a deposit. Then £221.97 a month for 24 months (total of £5327.28) and then you either give the car back or pay another £14,465.45.
Total of £30508.89 and that's for the model they have just replaced, so it stands to be worth about £10k in 4 years time (£5k depreciation per year). I would very much NOT recommend doing this.
If you are spending anything like that much you should get the new model. If you want the old model then you should be paying a lot less overall.
I got the impression (and I may be wrong) that you hadn't added everything up and realised that you still needed to pay £14k at the end or they would take the car. In which case I'd be very wary of getting trapped in one of these deals where it would have worked out cheaper to have bought an M3 (or something like that).
Total of £30508.89 and that's for the model they have just replaced, so it stands to be worth about £10k in 4 years time (£5k depreciation per year). I would very much NOT recommend doing this.
If you are spending anything like that much you should get the new model. If you want the old model then you should be paying a lot less overall.
I got the impression (and I may be wrong) that you hadn't added everything up and realised that you still needed to pay £14k at the end or they would take the car. In which case I'd be very wary of getting trapped in one of these deals where it would have worked out cheaper to have bought an M3 (or something like that).
MonTheF1sh said:
12% apr sounds a bit high to me.... Only 6% here for up to 15k: http://money.marksandspencer.com/loans/car-buying-...
yep that HP is shockingi got 2 smaller loans to buy the RS Golf @ 7% rather than take the dealers 11% apr
going from 12% to 7% will save you £2,200 over 5 years on 15k !
and there's no fees as well, that's a very bad finance deal imo
don't take there bloody insurance extras as well, you can get gap for £200
Edited by Dave Hedgehog on Saturday 7th April 13:36
Wafflesmk2 said:
I tap into the finance calculator ...
It's not a Finance calculator as you know it. It's a PCP - Personal Contract Plan where you effectively lease the car for a fixed term and either pay the lump sum at the end or hand the car back. You never actually own the car unless you buy it at the end of the plan.Wafflesmk2 said:
Am i right in saying that with £10716 paid, i get the car, then pay £221 for the next 23 months? What happens at the end of the 23 months?
Yup.At the end of 23 months you have to give the car back and pay the excess mileage, OR you can make the optional final payment and keep the car.
Yes - it's very expensive.
It's a 27k car. As said above this is a PCP (finance with balloon payment) deal.
If you want to finance it with your 12k deposit and have no balloon to pay off then you need to pay the whole balance off over the term of the loan, i.e:
You put down 12k
You have 15k outstanding.
Putting interest aside for a moment you need to pay the 15k off. Using your 24 month term of loan example that equates to 24 payments of £625 (£15000 / 24).
Including interest (cut and paste from a bank website loan calculator):
If you borrow £15,000 over 2 years at a Representative APR of 6.2% fixed and an annual interest rate of 6.2% you would pay:
Payment per month £665.02 Total charge for credit £960 Total amount you repay £15,960
If you want to finance it with your 12k deposit and have no balloon to pay off then you need to pay the whole balance off over the term of the loan, i.e:
You put down 12k
You have 15k outstanding.
Putting interest aside for a moment you need to pay the 15k off. Using your 24 month term of loan example that equates to 24 payments of £625 (£15000 / 24).
Including interest (cut and paste from a bank website loan calculator):
If you borrow £15,000 over 2 years at a Representative APR of 6.2% fixed and an annual interest rate of 6.2% you would pay:
Payment per month £665.02 Total charge for credit £960 Total amount you repay £15,960
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