[Spitz428]

Hi Guys,

I took my 428i GC on weekend and settled with balloon finance with 1.9% apr and residual at 37%. So my msrp was $48450 (w/ m sport in estoril blue, premium, backup cam and sensor), so the balloon payment will be $17927 at the end of 5yrs, with monthly payment $493. So are these number correct if they give me the out the door price at $47500, while I paid $3000 down initially?
I thought it's alright but somehow a bit confused after i got home lol

Thanks alot if anyone can calculate

[TheLiverBird]

I've just worked it out and reckon it should be $496 so seems spot on.

This is what I did!

Take msrp and subtract deposit (this gives the amount you're financing (remember that although there's a balloon you still pay interest on it)) - then I multiplied this my 1.05 (to give an approx amount needed to repay at 1.9% APR (although this maybe a little high). Then subtracted the balloon payment, and finally divided by 60 - the number of months you'll be paying, to get the $496.

Hope this a) helps, and b) is the right way to work it out!

[TheLiverBird]

Originally Posted by TheLiverBird

I've just worked it out and reckon it should be $496 so seems spot on.

This is what I did!

Take msrp and subtract deposit (this gives the amount you're financing (remember that although there's a balloon you still pay interest on it)) - then I multiplied this my 1.05 (to give an approx amount needed to repay at 1.9% APR (although this maybe a little high). Then subtracted the balloon payment, and finally divided by 60 - the number of months you'll be paying, to get the $496.

Hope this a) helps, and b) is the right way to work it out!

Although this seemed right when I wrote it, I'm no longer sure, as using my own figures I reckon I should be paying £424, but I'm paying £489???

[tturedraider]

http://bretwhissel.net/amortization/

[Spitz428]

Originally Posted by tturedraider

http://bretwhissel.net/amortization/

So is it correct?
What should I put in the "Number of Regular Payments"?

Thanks

[TheLiverBird]

Just put your figures into PCPCAL.co.uk (I know you're working in $) and it comes out at $492.99 so you're spot on. I also re-did mine on there and they're correct too!

[jd_perspective]

is this a better situation for you than leasing? just saying... my MSRP was $56k and $0 down (other than 7 MSD's which are refundable) and with 6.5% tax my payment is $533 for 36 mo and 10k annual miles...

just saying... seems like a lot for the MSRP but don't know what you are trying to accomplish with the balloon.

[Spitz428]

Originally Posted by TheLiverBird

Just put your figures into PCPCAL.co.uk (I know you're working in $) and it comes out at $492.99 so you're spot on. I also re-did mine on there and they're correct too!

Thanks bro, can you state what you put on the blanks?
1) Price:
2) Deposit:
3) Dealer Contribution:
4) Part Exchange Value:
5) Amount of the loan (any currency):
6) Final Payment/GMFV:
7) Annual percentage rate of interest:
8) Repayment period in months:

[TheLiverBird]

Originally Posted by Spitz428

Thanks bro, can you state what you put on the blanks?
1) Price:
2) Deposit:
3) Dealer Contribution:
4) Part Exchange Value:
5) Amount of the loan (any currency):
6) Final Payment/GMFV:
7) Annual percentage rate of interest:
8) Repayment period in months:

I used the figures from your OP.
1) £47500
2) £3000
3) £0
4) £0
5) it works that out by no.1 - no.2
6) £17927
7) 1.9%
8) 60 months

Did it all in £ but that shouldn't make any difference - payments were £492.99

[Spitz428]

Originally Posted by TheLiverBird

I used the figures from your OP.
1) £47500
2) £3000
3) £0
4) £0
5) it works that out by no.1 - no.2
6) £17927
7) 1.9%
8) 60 months

Did it all in £ but that shouldn't make any difference - payments were £492.99

#5 is where i get confused. Loan amount is not 47500-17927? in that case, the loan amount is 44750 and paying 17927 at the end?

[TheLiverBird]

Originally Posted by Spitz428

#5 is where i get confused. Loan amount is not 47500-17927? in that case, the loan amount is 44750 and paying 17927 at the end?

Loan amount is the price you're paying for the car minus the deposit you put in. It INCLUDES the balloon payment as in theory you are borrowing that too - until such point as you pay it off.

I too was similarly confused when I first bought a car like this, and incorrectly assumed I was borrowing the difference between the price (cost minus deposit, discount and trade in etc.) and balloon / final purchase price / GFV etc etc.

The amount you'll pay in your 60 loan instalments covers the depreciation from the purchase price down to the balloon - so in your case if you make all 60 payments that'll be $29580, plus then the balloon of $17927, plus your $3000 in as deposit means you'll end up paying $50507 for the car if you keep it after 5 years. as your APR is just 1.9% thats not bad TBH. Unfortunately thats the way PCP works!

[Spitz428]

Originally Posted by TheLiverBird

Loan amount is the price you're paying for the car minus the deposit you put in. It INCLUDES the balloon payment as in theory you are borrowing that too - until such point as you pay it off.

I too was similarly confused when I first bought a car like this, and incorrectly assumed I was borrowing the difference between the price (cost minus deposit, discount and trade in etc.) and balloon / final purchase price / GFV etc etc.

The amount you'll pay in your 60 loan instalments covers the depreciation from the purchase price down to the balloon - so in your case if you make all 60 payments that'll be $29580, plus then the balloon of $17927, plus your $3000 in as deposit means you'll end up paying $50507 for the car if you keep it after 5 years. as your APR is just 1.9% thats not bad TBH. Unfortunately thats the way PCP works!

ic, but if you compare that with regular financing for loan amount of 44500, you end up with 778 monthly payment, so a total of 2180 finance charge after 5 yrs, which is only around 800 of difference by using balloon. 800extra for 5yr loan, which is very minimal but you enjoy low month pay plus cash on hand for investment