Does it sound like a reasonable deal ?

webwysard · 12-01-2011, 03:27 AM

Morning all,

Well as few of you would know that I was after a hot hatch and it came down to Seat Leon Cupra R.

As I was gonna finance the car so the dealer has offered me this deal and I have almost accepted it but still want to know if its reasonable or not.

The value of the car is £15990 and I am putting down £3.5k as a deposit. its on a 41 months with monthly rental of £217.71 and the baloon or GFV is £6243 and I am told that the APR is 8.7% .

Now I have had a couple of cars on lease before with BMW but never really understood how it works, so couple of questions..

Does this APR is chargeable on the loan amount(217.71*41) only and not the GFV ?

and does the GFV seem ok ? or should it be higher or lower ?

Please make me understand this.

Thanks

davyk31 · 12-01-2011, 03:42 AM

The final value seems a little high to me in that it won't be worth that. That is approx 39% of purchase price, after 3.5yrs I expect it could be worse but hard to tell. They always bump up the final payment to keep your monthly payment lower but then the sting comes at the end. Depends if its a final payment or a Guaranteed future value, if the latter you just hand back but these deals are more infrequent these days.

Have you looked at straight HP, perhaps extending the term out to 60 months. Roughtly calculating I would reckon your loan over 5 yrs would be about £240 per month but at month 41 you owe 60-41= 19 months x 240.00 = £4560. This gives you flexibility to either sell or keep the car at any stage of the agreement.

And to answer your question, interest and thus APR are charged on the full loan amount including the final payment.

12-01-2011, 03:27 AM	#1
webwysard Captain 57 Rep 737 Posts Drives: M135i Join Date: Apr 2010 Location: North West iTrader: (3)	Does it sound like a reasonable deal ? Morning all, Well as few of you would know that I was after a hot hatch and it came down to Seat Leon Cupra R. As I was gonna finance the car so the dealer has offered me this deal and I have almost accepted it but still want to know if its reasonable or not. The value of the car is £15990 and I am putting down £3.5k as a deposit. its on a 41 months with monthly rental of £217.71 and the baloon or GFV is £6243 and I am told that the APR is 8.7% . Now I have had a couple of cars on lease before with BMW but never really understood how it works, so couple of questions.. Does this APR is chargeable on the loan amount(217.71*41) only and not the GFV ? and does the GFV seem ok ? or should it be higher or lower ? Please make me understand this. Thanks
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12-01-2011, 03:42 AM	#2
davyk31 Major General 1042 Rep 6,946 Posts Drives: Macan GTS :-) & F40 M135i Join Date: Sep 2009 Location: Northern Ireland iTrader: (0)	The final value seems a little high to me in that it won't be worth that. That is approx 39% of purchase price, after 3.5yrs I expect it could be worse but hard to tell. They always bump up the final payment to keep your monthly payment lower but then the sting comes at the end. Depends if its a final payment or a Guaranteed future value, if the latter you just hand back but these deals are more infrequent these days. Have you looked at straight HP, perhaps extending the term out to 60 months. Roughtly calculating I would reckon your loan over 5 yrs would be about £240 per month but at month 41 you owe 60-41= 19 months x 240.00 = £4560. This gives you flexibility to either sell or keep the car at any stage of the agreement. And to answer your question, interest and thus APR are charged on the full loan amount including the final payment.
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