Calculating an early PCP a settlement fee

[Prabs91]

Hi All, I'm looking to purchase a used BMW M4, I'm toying with the idea of getting a 48 month PCP agreement
Cash price is 40k
Deposit is 5k
With 48 monthly payments of £505

However I would like to settle the finance deal after 24 months and pay off the rest of the value.

Before taking this route I want to try and calculate the settlement figure after 24 months (or there about)

To see if I'd be in any negative equity if i then immediately sold the car on the used market.

Any input would be much appreciated.

Thanks!

[tallpaul26]

What's the final (balloon) payment?

[anonymous-user]

Pretty sure you'll be in negative equity until sometime in year 4.

[Prabs91]

tallpaul26 said:

What's the final (balloon) payment?

£19,122

[timbo999]

£29,000 or thereabouts.

[tallpaul26]

After 24 months you won't even have paid off the interest.

What do you expect the p/x value to be in 2 years?

[nyxster]

It will depend entirely on the finance rate.

Take total finance cost including interest (amount borrowed) subtract 24 payments and you'll be left with the pre-rebate balance. Interest isn't linear - it is front loaded so you are paying mostly interest at the start due to the high balance and mostly capital at the end. you'll get a pro-rate interest rebate for the unexpired term.

the baloon makes no difference - to settle you are paying interest on the whole balance so it is the total amount borrowed less payments made and a deduction for interest that would have been charged on the future balance,

[Momentofmadness]

timbo999 said:

£29,000 or thereabouts.

48 x 505 = 24,240

Balloon = 19,100

Deposit = 5,000

Total price for the car = 48,340

After 24 months you'll have paid 24x505 + 5000 = 17,120

Settlement = 48,340 - 17,120 = 31,000 (but less as timbo says as you'll save on interest)

(is that right? )

Edited by Momentofmadness on Wednesday 5th July 21:00

[Granfondo]

Prabs91 said:

Hi All, I'm looking to purchase a used BMW M4, I'm toying with the idea of getting a 48 month PCP agreement
Cash price is 40k
Deposit is 5k
With 48 monthly payments of £505

However I would like to settle the finance deal after 24 months and pay off the rest of the value.

Before taking this route I want to try and calculate the settlement figure after 24 months (or there about)

To see if I'd be in any negative equity if i then immediately sold the car on the used market.

Any input would be much appreciated.

Thanks!

Is it through BMW finance @10.9% ?

[tallpaul26]

D'oh. Read the wrong post and thought the balloon was £29k not £19k!

After 24 months you'll be £17k in. You need to check the T&C's of the PCP contract to see what the penalties are for early repayment.

[hajaba123]

Use this on the part of the loan that isn't the balloon

http://www.financecalcs.co.uk/Calcs/Settlement.php

[Prabs91]

Granfondo said:

Prabs91 said:

Hi All, I'm looking to purchase a used BMW M4, I'm toying with the idea of getting a 48 month PCP agreement
Cash price is 40k
Deposit is 5k
With 48 monthly payments of £505

However I would like to settle the finance deal after 24 months and pay off the rest of the value.

Before taking this route I want to try and calculate the settlement figure after 24 months (or there about)

To see if I'd be in any negative equity if i then immediately sold the car on the used market.

Any input would be much appreciated.

Thanks!

Is it through BMW finance @10.9% ?

It's 7.4% APR through a third party car finance company.