[JLR1969]

I am trying to calculate my APR % as it seems wrong, well to me anyway

Amount of credit is £32,193 and the APR is 4.9% over 4 years

The total charge for credit is £4,795.10

When I look on other bank sites and put the above numbers in the charge for credit is £3,248.72

What am I missing?

[teaston]

Is it PCP or HP?

[Beancounter_74]

As teaston is alluding to, looks like your quote is based on PCP, ie smaller monthly repayments with a ballon after 4 years (GMFV) which you will be paying interest on.
Sounds like the online quotes are assuming a full repayment of the amount borrowed over the 4 years, so you're comparing apples and oranges

[JLR1969]

It's a PCP but the paperwork at the top says Hire Purchase Agreement

[JLR1969]

I am still confused though

The total amount of credit which is the cost of the car is £32,192

I pay £414.80 X 48 months which equals £19,910.40 and the GVF is £17,492

How do they get to a total charge for credit of £4,794.10

[Archer-s]

With a PCP you pay interest on the GFV from start to end, so in your case the 17k, this is likely to be extra interest compared to an ordinary HP/loan type agreement.

In the HP/loan agreement you pay off more each month, so the actual amount of interest paid each month drops much faster.

[JLR1969]

So I would be better getting a personal loan at 3.1% and saving interest albeit I would then own the car and have to sell privately

[teaston]

Originally Posted by JLR1969

So I would be better getting a personal loan at 3.1% and saving interest albeit I would then own the car and have to sell privately

Yes you would pay less interest that way, but the monthly repayment will likely be around £300 more per month.

[dopper99]

Originally Posted by JLR1969

So I would be better getting a personal loan at 3.1% and saving interest albeit I would then own the car and have to sell privately

Just put your figures through a loan calculator and £32K over 48 months at 3.1% APR is £709 a month.

So if you can afford the extra per month, yes you'll save money on interest and own the car outright at the end.

[nordberg]

Originally Posted by JLR1969

It's a PCP but the paperwork at the top says Hire Purchase Agreement

Same thing....

[isleaiw1]

Originally Posted by JLR1969

I am still confused though

The total amount of credit which is the cost of the car is £32,192

I pay £414.80 X 48 months which equals £19,910.40 and the GVF is £17,492

How do they get to a total charge for credit of £4,794.10

Is it not 47 monthly payments plus balloon?

47 x 414.8 = 19495.60 (A)

GFV = 17492 (B)

Total payable = A+B = 36987.60 (C)

Credit = 32192 (D)

Cost of credit (C-D) = 4795.50 (near enough!!)

[JLR1969]

Originally Posted by isleaiw1

Is it not 47 monthly payments plus balloon?

47 x 414.8 = 19495.60 (A)

GFV = 17492 (B)

Total payable = A+B = 36987.60 (C)

Credit = 32192 (D)

Cost of credit (C-D) = 4795.50 (near enough!!)

Yes the above is correct

[JLR1969]

So I have taken £12,000 out of my savings and borrowed £20,000 over 4 years

Interest saved is £3,500

This feels like a better option to me as the interest on a PCP bothers me.

Thanks Guys!

[nordberg]

Originally Posted by JLR1969

So I have taken £12,000 out of my savings and borrowed £20,000 over 4 years

Interest saved is £3,500

This feels like a better option to me as the interest on a PCP bothers me.

Thanks Guys!

Just check the OTR price would be the same if financing it yourself. You may find that the dealer/manufacturer contributions change which will result in the OTR price going up.

[JLR1969]

Sainsburys loan at 3.1% approved then found out that as a Nationwide customer they will beat any loan approved by 0.5% so the APR is reduced further to 2.6%

Not a bad result APR reduced from 4.9% with BMW to 2.6% with Nationwide

Increased deposit so total interest on the car over 4 years is £1079!!!!

[dopper99]

Originally Posted by JLR1969

Sainsburys loan at 3.1% approved then found out that as a Nationwide customer they will beat any loan approved by 0.5% so the APR is reduced further to 2.6%

Not a bad result APR reduced from 4.9% with BMW to 2.6% with Nationwide

Increased deposit so total interest on the car over 4 years is £1079!!!!

Good result.
So although it's "cost" you £12k of savings, you've managed to get your monthlies down to nearly what they are now, and you'll own the car after 4 years.


Btw, just a point on pcp, don't forget you can voluntary terminate thus ending your agreement earlier ..... therefore you are not paying quite as much interest overall.

[JLR1969]

Originally Posted by dopper99

Good result.
So although it's "cost" you £12k of savings, you've managed to get your monthlies down to nearly what they are now, and you'll own the car after 4 years.


Btw, just a point on pcp, don't forget you can voluntary terminate thus ending your agreement earlier ..... therefore you are not paying quite as much interest overall.

Thanks for the tip haha
I don't want to send it back I think it's going to last quite a while, but fair point.