Can someone explain these PCP figures to newb?

[DazBMW]

Hi all,

I've never PCP or financed a car before so can someone explain these figures to me as I don't seem to understand them.

These are just figures I came across on autotrader.

The car value is £15,995.00 (2015 m135i)

1,000 deposit + £159.13 monthly payments for 36 months. that totals £6,728.68 so £2,242.00 P/A which i'd be happy with.

Whats confuses me is is the 'total charges payable £4,041.30' where the hell does that figure come from and what does it mean?

Also the APR is 9.9% which seems steep for credit ? Are there better finance PCP companies I can find out there? 

Should I just concern myself with the £6,728.68 total over 3 years and forget the other figures or can someone explain what im missing here?

 

Thanks 

[DazBMW]

i forgot to ask too; do garages still tend to take px when getting a pcp? my current car px value is just over 11k so would they give me the 10k difference after taking off deposit or will I have to sell privately 

[Greydog]

Morning Darren

Just at the moment I would say you are in a strong position with the announcement on Wednesday last week that new car sales are down 97% I would think used car sales are in a similar position.

I am no finance expert but PCP finance as I understand it works that you get lower Deposit and monthly payments but at the end of the term you pay a balloon payment to own the car often around half the purchase price. If you don't want to make the balloon payment you give the car back however if you do that you have nothing, in effect you have rented a car for 3 years. Or if there is equity left in the car you can use it as part or all of a deposit on another car.

You say your current car has a trade in of £11k, do you own the car or is there a loan or finance against it that has to be cleared? If there is that will complicate the deal slightly.

Bottom line is at the moment car sales are down across the board due to the lock down situation any buyer is in a strong position, any deal offered get it in writing so you can consider it then after 24 hrs or so call them and say it's to much or more than you were budgeting but you really like the car but as it is you will have to look else where. Then wait, I will bet they don't want to loose a deal right now, also the nearer the month end it is the more pressure will be on the sales guy figures are calculated and commission is paid monthly.

Good Luck

Dave

[SilverJohn]

Hi Darren

I agree with everything Dave says as regards it being a buyers market. 

To specifically answer your question, £4,041.30 is the difference between the total of the Payments (£20,036.30) and the Price (£15,995.00). i.e. That's the cost of borrowing the money.

My daughter bought a Mercedes back in February on PCP and they did take her old car in PX. They matched the offer made by WeBuyAnyCar. I tried to persuade her as regards her choice of car but she wouldn't be swayed. Unfortunately, as it happens, she's had a number of problems with it and was close to demanding a replacement when Covid 19 locked us all down.

It's only 2 years old, less than 10K miles and is an ex-demonstrator but in the first 6 weeks, spend 4 or 5 days back at the dealership.

Hope this helps.

John