[Malone]

Sorry, I've looked through loads of posts, but can't find anything to answer my question (or I'm just blind!!)..

Does anyone know how the PCP finance works, as I just can't get the figures to add up.

Surely it's: price of the car - deposit - GFV + interest / term = monthlies?

If I put this into a standard loan calculator, the monthly amount comes out lower than I'm being quoted..

[deebee]

Originally Posted by Malone

Sorry, I've looked through loads of posts, but can't find anything to answer my question (or I'm just blind!!)..

Does anyone know how the PCP finance works, as I just can't get the figures to add up.

Surely it's: price of the car - deposit - GFV / term = monthlies?

If I put this into a standard loan calculator, the monthly amount comes out lower than I'm being quoted..

Are you putting interest in the car including GFV? That's how they do it

[Malone]

Ahhhh, so they charge interest on the total finance, then take off the GFV, divide that over the term and that's your monthlies?

[deebee]

Originally Posted by Malone

Ahhhh, so they charge interest on the total finance, then take off the GFV, divide that over the term and that's your monthlies?

As far as I know yes that's what they do, only thing that doesn't have interest is the deposit taken off

[rosstin]

Originally Posted by Malone

Ahhhh, so they charge interest on the total finance, then take off the GFV, divide that over the term and that's your monthlies?

Yes you're paying interest on the GFV amount too unfortunately

[Malone]

Thanks a lot. That gets my calculations to pretty much add up now!

[CazuaLLUK]

Originally Posted by Malone

Thanks a lot. That gets my calculations to pretty much add up now!

[Proftinkerpot]

It's the interest in the GFV that makes a PCP an expensive way to buy the car outright as you pay double interest on the GFV if you then have to borrow money to finance the purchase at the end of the PCP period. Although with interest rates as they are right now, it's actually not such a bitter pill. Finance can be got for around 2.9 or 3 %

[Goneinsixtyseconds]

Originally Posted by Proftinkerpot

It's the interest in the GFV that makes a PCP an expensive way to buy the car outright as you pay double interest on the GFV if you then have to borrow money to finance the purchase at the end of the PCP period. Although with interest rates as they are right now, it's actually not such a bitter pill. Finance can be got for around 2.9 or 3 %

But people generally don't buy the car at the end of the term. 80% get a new one, some will just walk away, leaving very few buying at the end. Then of those that do buy at the lower price, some will buy for cash at the lower price, leaving even less keeping their car and using finance for it.

Although you can, PCP's aren't really designed for those wanting to buy a car outright.

[MrChumley]

This might help?