PCP Repayment Interest and GFV
Discussion
Looking for some direction please on PCP deal and how best to pay off the remaining balance.
Using hypothetical figures
PCP Deal: £30k Car with GFV of £20k and repayment at £500 per month over term, if I repay £14k straight away to take it below the GFV and cover the interest on the GFV will there still be monthly payments? I know there is still interest due on the remaining GFV. However, as the amount expected to be repaid over the term to GFV has been repaid will there still be monthly payments due or will the interest simply offset into the overpayment?
Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too.
Thanks!
Using hypothetical figures
PCP Deal: £30k Car with GFV of £20k and repayment at £500 per month over term, if I repay £14k straight away to take it below the GFV and cover the interest on the GFV will there still be monthly payments? I know there is still interest due on the remaining GFV. However, as the amount expected to be repaid over the term to GFV has been repaid will there still be monthly payments due or will the interest simply offset into the overpayment?
Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too.
Thanks!
TailwindRoaster said:
Looking for some direction please on PCP deal and how best to pay off the remaining balance.
Using hypothetical figures
PCP Deal: £30k Car with GFV of £20k and repayment at £500 per month over term, if I repay £14k straight away to take it below the GFV and cover the interest on the GFV will there still be monthly payments? I know there is still interest due on the remaining GFV. However, as the amount expected to be repaid over the term to GFV has been repaid will there still be monthly payments due or will the interest simply offset into the overpayment?
Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too.
Thanks!
Essentially you have taken out a £30k loan. Using hypothetical figures
PCP Deal: £30k Car with GFV of £20k and repayment at £500 per month over term, if I repay £14k straight away to take it below the GFV and cover the interest on the GFV will there still be monthly payments? I know there is still interest due on the remaining GFV. However, as the amount expected to be repaid over the term to GFV has been repaid will there still be monthly payments due or will the interest simply offset into the overpayment?
Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too.
Thanks!
If you repay £14k, you will have a £16k loan remaining.
Speak with the finance company about how they will want to re-structure the monthly payments, now that that the outstanding loan amount has been reduced.
TailwindRoaster said:
...
Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too....!
Whilst it seems a good idea in theory, in practice the finance company do want to make a profit, so they don't want people putting down too big a deposit/initial payment and just using the PCP as an interest only loan on the final payment.Not sure there is a one-size fit here but trying to get my head around how best to avoid interest while using the GFV too....!
Some third party lenders do offer customisable deals where you can get generous final payment values if they are confident the car will hold its value.
I did something similar with a Renault. I needed to keep the PCP in place to benefit from free servicing. I paid off something like all but the last £100 of the final payment a few weeks after buying the car. They just charged me interest on that over the remaining term. The payments were £1.74 a month or something!
Gassing Station | Car Buying | Top of Page | What's New | My Stuff