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Am I being ripped off?

TezzyMod3

Member
May 30, 2019
215
80
London
F0D30CD6-B84F-4630-AF81-CE24A55E1DCD.jpeg
So got a PCP deal sorted and before I sign on the dotted line I’m trying to figure out, where is this £3500 government grant being accounted for? Are the PCP company just pocketing this?

Would appreciate some clarification.
 

dazjdash

Member
May 31, 2019
53
66
UK
I had this query on a PCP quote I received.
They have to finance on the full P11D value, and so don’t take the PICG into account from what you see.
If you use the CarWow PCP calculator (PCP Car Finance Calculator | carwow), and then:
  1. Put the P11D value in the Car Price
  2. Initial rental in the Customer Deposit
  3. Put the £3,500 PICG as the Dealer Contribution (just to keep the two ‘deposits’ clearly separate)
  4. Put in the Optional Final Value as the Final Payment, and then
  5. Move the sliders according to your terms, it comes out roughly the same - with the difference likely being the included RAC membership
Out of interest, who was the quote from as almost 1% difference on the APR from quotes I’ve had?
 
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TezzyMod3

Member
May 30, 2019
215
80
London
This was from FleetSauce. Who did you have your quotes from? 1% better or worse?

So does this mean that they should have a dealers contribution box? The reason this PCP is cheap (as I've realised) is that the final balloon payment is MASSIVE!
 

dazjdash

Member
May 31, 2019
53
66
UK
I was being quoted around 7.4% APR, so almost 1% worse (albeit on a slightly different car) and ironically from FleetSauce. I might have to snap your quote and go back to them, just in case :D

I’m not fully versed on where the PICG goes in terms of these quotes, only that it appears to be factored in somehow. FleetSauce were very helpful both on the phone and by email when I asked them for quotes so that may be your best option.

As for the balloon payment - that’s why PCP works for a lot of people (particularly if they plan on giving the car back).
One of the things I always factor in is savings required to take a damn good chunk off the final balloon to improve chances of further financing if needed / wanted
 

Yev000

Active Member
May 3, 2019
1,325
897
Knaphill
Well, this is interesting. If the grant is not included you are paying 2786.36 in interest over 36 months

If the grant IS included you are paying 6286.36 in interest over 36 months

initial price with grant: 43350-5000-3500 = 34850 - balloon 26790 = 8060 paid off in 36 months

8060 / 36 = 223.8889 you are paying 398.51 that's a difference of 174.6211 * 36 = 6286.36

initial price without grant: 43350-5000 = 38350 - balloon 26790 = 11560 paid off in 36 months

11560 / 36 = 321.1111 you are paying 398.51 that's a difference of 77.39889 * 36 = 2786.36

since 6286.36 would be a silly APR on borrowing 8060 I would conclude that the grant is not included in that PCP calc

2786.36 on borrowing 11560 sounds a bit more reasonable, although still around 15% ... I don't know how they put 6.5% APR...

unless I'm wrong and PCP deals are some kind of black magic, or you just give the car back at the end and forget it...


by comparison the hire purchase you pay something like 650 with 5.9% APR for 60 months and the car is yours for about 3.5k interest in 5 years.
 

Yev000

Active Member
May 3, 2019
1,325
897
Knaphill
Just to add to that, you are paying 5000 up front as deposit. 5000/36 = 138.89 so effectively you are paying 537.40 per month total.

I honestly don't know why people bother with PCP to lease the car in all but name for the difference cost of a cable subscription. You would never want to pay off that balloon payment.
 

TezzyMod3

Member
May 30, 2019
215
80
London
So I think I may have figured it out but I will ask FleetSauce to confirm...
I think in a PCP the APR will be charged on the total sum financed (i.e. P11d minus deposit minus PICG)

So 43,350 - 5000 - 3500 + 360 (£300+20% Booking Fee) = 35210

35, 210 * 1.0654 (Interest Rate Year 1) * 1.0654 (Interest Rate Year 2) * 1.0654 (Interest Rate Year 3) = 42,579

Interest Paid £7369...High than real life figures because Year 2/3 interest would be lower as you'll have less to finance each year.

Working backwards, £398.51*36+5000+3500+26790 = £49636.36 - £43350 = £6286.36 Interest Paid.

So you're right, its about £204/month just on interest! If Tesla had an interest free finance, for example, you would expect to pay £223/month! The only issue is Telsa wouldn't give you a GFV of 61%.

Thumbs up for the Carwow calculator!
 

TezzyMod3

Member
May 30, 2019
215
80
London
Just to add to that, you are paying 5000 up front as deposit. 5000/36 = 138.89 so effectively you are paying 537.40 per month total.

I honestly don't know why people bother with PCP to lease the car in all but name for the difference cost of a cable subscription. You would never want to pay off that balloon payment.
Lease is the same price. Someone here quotes £328 per month with 6000 upfrnt. thats £328*23+6000/24= £564
 

zayn

Member
Jun 3, 2019
415
121
London
for the OP, better to look at PCH, I posted a deal today from CVL which can be adjusted to your requirements



Just to add to that, you are paying 5000 up front as deposit. 5000/36 = 138.89 so effectively you are paying 537.40 per month total.

I honestly don't know why people bother with PCP to lease the car in all but name for the difference cost of a cable subscription. You would never want to pay off that balloon payment.
 

Tony Hoyle

Active Member
May 7, 2019
1,010
613
Stockport, UK
That is a fairly high GFV. Assuming you intend to keep he car work out what it would be to loan that 26k at the end of the period.. you're going to be lucky to keep the repayments on that to £400 a month.

If you don't want to keep the car, lease may be a better option as others have said.
 
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