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Old 03 January 2004, 18:52   #1
Ballistic
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In attempting to work out an affordable monthly payment for a PCP scheme I'm trying to design a table where I can change the variables to see how it affects the outcome.

In an excel sheet if I input;
amount to borrow
term of PCP
APR%

does anyone know the formula that the finance companies use to calculate the monthly payment + the final balloon payment?

Any help on this much appreciated, then I can just perm the figures.
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Old 03 January 2004, 18:59   #2
CRAIGFIN
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Ballistic,

Sorry can't help you, mate. You know the Zed's worth it.

Craig.
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Old 03 January 2004, 19:11   #3
David Brent
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Ballistic,
I think it depends on what "future value" the finance company will give the car and i think different companies will give differing values.
It's frustrating I know, I often sit here wondering what i could buy for what repayment.......

good luck
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Old 03 January 2004, 20:50   #4
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Ballistic

Heres a deal for you. Based on a 350Z

Balanced payments - if you settle early interest is calculated daily, unlike PCP's that front load. So NO early settlement issues/penalties.

Car 27,850
Deposit 4,750

Monthly 350

Settlement in 48 months 10,250

Jonathan
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Old 03 January 2004, 20:59   #5
Chins
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Ballistic

My advise is

1. Forget PCP deals. Never the best for interest, unless the manufacturer is subsidising it. As mentioned above, you get penalised heavily on early settlement. ex The first 3-6 months of most PCP deals are just front loaded interest.

2. Balanced payments over 5 years are a much better bet. Dealers do not advertise them as they make nowt. Some will do, but say you need to borrow 25k.

I just use a simple spreadsheet to see what my settlement would be in three years of a five year deal. Ive found Lombard hard to beat with a rate of 5.9%. I also think the figures on my deal will work out OK, even though I have no thought of keeping the car that long. Just wanted to keep the monthly payments down. Hence adding a ballon payment after 4 years into my deal.

Jonathan
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Old 04 January 2004, 09:32   #6
Ballistic
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Chins

Many thanks for the information supplied so far, most usefull.
I realise the variables that affect the balloon payment calculation ie; mileage, age etc. and I have been led to believe that companies calculate the GFV as 80/85% of the predicted real value.
The figures you mention for the 350Z, have they been quoted by a dealer or are they based on sourcing your own finance with Lombard?
I've never come across the term 'balanced payments' can you please explain the mechanics of how this scheme works.
Thanks for your comments on PCP deals being very front-end loaded. I'm not aware of either Nissan/Mazda currently offering any subsidised finance.
Is a lease purchase deal available to a private individual (someone from another forum mentioned this as a good option)
I'm looking to borrow around 20k to purchase either a 350Z or RX8 (probably RX8 because it's more practical) I anticipate keeping the car for at least 3 years and my annual mileage is around 15K
I'm not a financial expert, so as a private purchase what will be the most cost effective way to fund this over 3 - 5 years?
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Old 04 January 2004, 10:19   #7
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I see you got some good feedback on the 350Z board as well.

If you buy the Z, are you going for the GT pack and Rays, or a std car ?

At the end of the 3 years when you sell the car, how much equity are you after ?

My deal is sourced direct with Lombard. Thats another slice of commision saved. I have a good contact if you need him.

As mentioned dealers done mention balanced payments coz of commission. They are similar to Mortgages where interest is calculated daily. The only downside can be if interest rates start shooting up your interest payments will, but in all honesty that no likely to be a huge hit.

If you borrowed 20k on PCP and tried to settle 1 month later, you would pay probably 20,500 to settle. On balanced payements it would be 19,800. All very rough figures.

Jonathan
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Old 04 January 2004, 10:29   #8
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Chins

Interesting reading. Have you got any website links for Lombard? I've only be able to find their banking services and personal loans - nothing to do with their car finance schemes.

I was looking at Mazda's finace for the RX8 - appalling bad and expensive. I can't believe anyone would use it!

Chris
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Old 04 January 2004, 10:48   #9
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Chins

If I buy a Z it will be the standard car + sat-nav.
I'm not looking for any equity in the car at the end of the term (as long as it's not negative), my main concern is to keep the monthly payment as low as possible.
I'd be very interested to talk to your contact at Lombard.
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Old 04 January 2004, 18:14   #10
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Ballistic

Drop me an email, and I will forward you the contact. Chris you have a email.

I also looked at the RX-8. Using Lombard as a reference, they see the residual values % wise as lower on the RX-8 than the 350Z. I personally feel that Mazda want to sell too many of them, and in a couple of years, there will be large discounts and insentives to buy. Mazda have stated 6000 cars in 2004 alone. One of the guys on the RX-8 forum is struggling to sell his car now for decent money.

Lombard see the 350 at 60% and the RX-8 at 50% in 3yrs.

Going for a realistic finance deal on the 350Z, would look like this IMHO.

Car 24,000
Deposit 4000
48 months @ 320
Settlement 8,500

This would still leave a degree of equity.

For an RX8. My deal looked something like this.

23,500
Dep 2,500
48 @ 334
Settlement 8500

Hope this helps. Bearing in mind the number of cars I buy from them, it might be hard to meet these numbers, but you shouldnt be far off.

Jonathan
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Old 04 January 2004, 21:59   #11
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Thanks Jonathan
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Old 04 January 2004, 21:59
 
 
 
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