dealer finance, how does this sound?
Discussion
6 month old car. up for £26,950. (Was about £34k new).
Main dealer.
Car includes 5 year service pack.
Not negotiated at all at the moment, the below is their first offer.
£13,500 paid.
then £517 for 30 months (dont want to be out of warranty)
So total of £29,010. (and own the car).
So in effect, spreading half over 2.5 years is costing £3k.
Where should they be able to get to?
I was thinking they can play about how they like with the numbers, but £26k for the car, pay £13k, then £500 a month for 30 months meaning they make £2k on the finance??
Main dealer.
Car includes 5 year service pack.
Not negotiated at all at the moment, the below is their first offer.
£13,500 paid.
then £517 for 30 months (dont want to be out of warranty)
So total of £29,010. (and own the car).
So in effect, spreading half over 2.5 years is costing £3k.
Where should they be able to get to?
I was thinking they can play about how they like with the numbers, but £26k for the car, pay £13k, then £500 a month for 30 months meaning they make £2k on the finance??
Argue the interest rate straight away.
I bought a car Feb'08 @ 4.5% APR, then the next car in Feb'09 the same dealer wanted to charge 9%.
If I remember rightly - they did other things on part-ex, etc - simply removing 3% from the interest rate equalled something like ~40 quid per month less in the payment.
I bought a car Feb'08 @ 4.5% APR, then the next car in Feb'09 the same dealer wanted to charge 9%.
If I remember rightly - they did other things on part-ex, etc - simply removing 3% from the interest rate equalled something like ~40 quid per month less in the payment.
FamilyDub said:
Argue the interest rate straight away.
I bought a car Feb'08 @ 4.5% APR, then the next car in Feb'09 the same dealer wanted to charge 9%.
If I remember rightly - they did other things on part-ex, etc - simply removing 3% from the interest rate equalled something like ~40 quid per month less in the payment.
ta. need to ask what the rate is - just took the numbers down so far!I bought a car Feb'08 @ 4.5% APR, then the next car in Feb'09 the same dealer wanted to charge 9%.
If I remember rightly - they did other things on part-ex, etc - simply removing 3% from the interest rate equalled something like ~40 quid per month less in the payment.
2010 BMW 320d ED, extras:
Deep Sea Blue Metallic,
Oyster/Black Dakota Leather,
5 year Service Package,
Black trim. high-gloss,
Electric Glass Sunroof,
Loudspeaker system - harman/kardon surround,
Media Package - BMW Professional,
Seat heating. front,
Split-folding rear seats,
Sun protection glass,
Through-loading ski bag,
CD changer preparation.
Deep Sea Blue Metallic,
Oyster/Black Dakota Leather,
5 year Service Package,
Black trim. high-gloss,
Electric Glass Sunroof,
Loudspeaker system - harman/kardon surround,
Media Package - BMW Professional,
Seat heating. front,
Split-folding rear seats,
Sun protection glass,
Through-loading ski bag,
CD changer preparation.
I understand your choice of spec because it's pretty much what I would have gone for. However, leaving aside an APR of over 11% which is frankly appalling, perhaps you could look at the deal in a different way? You're proposing to spend £29,000 on a six month old 2 litre diesel 3-Series. I know it's a high spec example, but that's a lot of cash for a used 2 litre diesel. I know the badge means a lot, but for about half that money you could get a 6 month old Mondeo with all the toys. Just trying to put it into perspective.
And back to what I suppose was your original question. The APR is a piss take. You can do better. Having said that, £2 grand interest when you are spending £29k isn't a deal breaker I suppose.
And back to what I suppose was your original question. The APR is a piss take. You can do better. Having said that, £2 grand interest when you are spending £29k isn't a deal breaker I suppose.
SonicHedgeHog said:
I understand your choice of spec because it's pretty much what I would have gone for. However, leaving aside an APR of over 11% which is frankly appalling, perhaps you could look at the deal in a different way? You're proposing to spend £29,000 on a six month old 2 litre diesel 3-Series. I know it's a high spec example, but that's a lot of cash for a used 2 litre diesel. I know the badge means a lot, but for about half that money you could get a 6 month old Mondeo with all the toys. Just trying to put it into perspective.
And back to what I suppose was your original question. The APR is a piss take. You can do better. Having said that, £2 grand interest when you are spending £29k isn't a deal breaker I suppose.
Thanks. Appreciate the input. Have been out and about today looking at the alternatives. having spent 18 months and 35,000 miles in a "standard" non "ED" 320d, I can say it isnt about the badge. The current steed has been bullet proof, a joy to drive, and in the entire time my wife and I have driven it, returned just shy of 50mpg.And back to what I suppose was your original question. The APR is a piss take. You can do better. Having said that, £2 grand interest when you are spending £29k isn't a deal breaker I suppose.
Its quick (enough), the seats a hugely comfortable, the integrated media system is fab, and the hi-fi awesome.
Of course, we could spend less on a mondeo - I tried one before I ordered the current car, but didnt get on with it (mahoosive to start with).
Like everything, we could spend, less - likewise we could spend an awful lot more......
You takes your choice - but I can sure you its based on a lot more than the badge. My wife has a new job and will be doing some serious miles, so we want something that will genuinely do some good mpg so she makes the best of her mileage allowance, whilst maintaining the enjoying drive (RWD) and decent performance.
Added bonus is that the ED is also only £35 a year tax, and the car we are looking at has a 5 year service pack on it, so running costs will be limited to fuel and tyres.
Fair enough, I can see how it makes sense for you and all the toys really do add to a car IMHO. Do hammer the dealer on that APR though. APR is a cunning little devil that empties your wallet in a way you hardly notice. I've was offered 4.9% on the new car I pick up tomorrow so there is a lot of room for manoeuvre. To put things into perspective, if you could get 0% APR you could probably have the petrol version for the same overall cost. Makes you think when you're going to so much effort to get good mpg, low road tax and free servicing.
SonicHedgeHog said:
Fair enough, I can see how it makes sense for you and all the toys really do add to a car IMHO. Do hammer the dealer on that APR though. APR is a cunning little devil that empties your wallet in a way you hardly notice. I've was offered 4.9% on the new car I pick up tomorrow so there is a lot of room for manoeuvre. To put things into perspective, if you could get 0% APR you could probably have the petrol version for the same overall cost. Makes you think when you're going to so much effort to get good mpg, low road tax and free servicing.
You wont get 0% finance on a Used car...Here is the way to work out your monthly payments with the APR, bear with me, its not as easy as it could be:
Multiply your flat rate by the number of years you wish the loan over, this figure we will call (a) i.e. 5% flat rate for 5 years = 25
Multiply the amount of your loan by (a), this new figure will be (b) i.e. £10000 x 25 = £250000
Now divide (b) by 100, this will give you (c) i.e. £250000 /100 = £2500
Now add (c) to the original amount borrowed, this will give you (d) £10000 + £2500 = £12500
Divide (d) by the amount of months your loan is over, this will give you your monthly payment. £12500 /60 = £208.33
Hope that helps!
Multiply your flat rate by the number of years you wish the loan over, this figure we will call (a) i.e. 5% flat rate for 5 years = 25
Multiply the amount of your loan by (a), this new figure will be (b) i.e. £10000 x 25 = £250000
Now divide (b) by 100, this will give you (c) i.e. £250000 /100 = £2500
Now add (c) to the original amount borrowed, this will give you (d) £10000 + £2500 = £12500
Divide (d) by the amount of months your loan is over, this will give you your monthly payment. £12500 /60 = £208.33
Hope that helps!
All you've done is worked out the payments based on the FLAT RATE and not the APR.
That's a long way for a short cut.
1. 5% of £10k = £500
2. 5 years X £500 = £2,500
3. £10k (capital) + £2.5k (interest) = £12.5k (total payable)
4. £12.5k / 60 payments = £208.33
A good rule of thumb is that APR is typically 2X the Flat Rate
That's a long way for a short cut.
1. 5% of £10k = £500
2. 5 years X £500 = £2,500
3. £10k (capital) + £2.5k (interest) = £12.5k (total payable)
4. £12.5k / 60 payments = £208.33
A good rule of thumb is that APR is typically 2X the Flat Rate
Edited by cuprabob on Wednesday 29th December 18:54
Edited by cuprabob on Wednesday 29th December 18:55
CarlT said:
SonicHedgeHog said:
Fair enough, I can see how it makes sense for you and all the toys really do add to a car IMHO. Do hammer the dealer on that APR though. APR is a cunning little devil that empties your wallet in a way you hardly notice. I've was offered 4.9% on the new car I pick up tomorrow so there is a lot of room for manoeuvre. To put things into perspective, if you could get 0% APR you could probably have the petrol version for the same overall cost. Makes you think when you're going to so much effort to get good mpg, low road tax and free servicing.
You wont get 0% finance on a Used car...cheadle hulme said:
Why does the motor industry still insist on using simple (flat) rates?
No other sales people seem to need it. Or do they really not understand finance costs?
Because it looks better than an APR :-)No other sales people seem to need it. Or do they really not understand finance costs?
Monthly payments under x% APR can be calculated by dividing the loan amount by:
(( 1 - (1 + X%)^(-term in years) ) / ln (1 + x%) ) / 12
So a 27k loan at 5% APR over 3 years will give you monthly payments of c. £806. It assumes continuous interest but keeps things simple.
(ln is the natural log and can be found on most calculators or in excel type ln.)
kin easier!! number2 said:
cheadle hulme said:
Why does the motor industry still insist on using simple (flat) rates?
No other sales people seem to need it. Or do they really not understand finance costs?
Because it looks better than an APR :-)No other sales people seem to need it. Or do they really not understand finance costs?
Monthly payments under x% APR can be calculated by dividing the loan amount by:
(( 1 - (1 + X%)^(-term in years) ) / ln (1 + x%) ) / 12
So a 27k loan at 5% APR over 3 years will give you monthly payments of c. £806. It assumes continuous interest but keeps things simple.
(ln is the natural log and can be found on most calculators or in excel type ln.)
Your equation shows how to work out the monthly payment if you already have the rate. He was asking for a simple way to work out the rate itself.
I am not aware of a simple accurate way to calculate APR manually, which is another reason the motor trader use a flat rate.
Edited by 1 on Wednesday 29th December 23:59
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