Is this a good deal?

[Hedge]

I have no experience with buying new cars, infact I generally find it insane, however part of me has the urge. I got sent this deal in an email.

It seems reasonable with the £1k deposit and monthly payments dont seem too crazy, however 48 months is a long commitment to something I guess.

Anyone kind enough to give an opinion? Thanks

 

[Rilot]

No. It's £2k less than list price and you're paying a massive 6.7% APR.
Go to the bank, get a loan and then go to dealers and see what deals they will do you.

 

[Hedge]

Exactly what I was looking for. Thanks man.

Avoided

 

[jellybeard999]

Not sure it's the same car, but £19897 on Broadspeed

https://broadspeed.com/CarView/Audi/A3/43105/TFSI_1.4_150PS_Petrol_Sport_Manual_3_doors

 

[muon]

Not sure it's the same car, but £19897 on Broadspeed

https://broadspeed.com/CarView/Audi/A3/43105/TFSI_1.4_150PS_Petrol_Sport_Manual_3_doors

The OPs deal is £18884 (£17884 on credit) with 6.7% APR.

6.7% APR is quite a lot to be paying over 4 years. Total amount payable shows that you end up paying roughly £6k in interest (£25k - £18.9k).

The advantage of a personal loan (even if the rate isn't much better) is that you can pay the loan off early without much of a penalty and avoid loads of interest.

 

[iaind]

6.7 isn't great but it's not OMGINTERESTZ - unless you have a very good credit rating then a personal loan won't be much cheaper.

Oh and it's a PCP, you can pay it off early and avoid the interest, same as with a loan. And the car is pretty much as the broadspeed price once the deposit contribution is taken off. So seems like a reasonable deal to me? It's not an unmissable bargain but if you're in the market for a new Leon then it looks good to me

Skoda have the Octavia 1.4Tsi on 0% PCP but the deposit contribution is a grand less so for the same monthly payments you need more than double the customer deposit. Goes to show its not always about the headline APR, 0% finance deals are never free money

 

[muon]

Ah okay, can pay off PCP early as well.

Yeh but that is because the optional final payment is a lot lower. You potentially have more equity in the Octavia deal.

You also end up paying £19k total for a £19k OTR car.

In the OPs deal you pay £25k for a £21.2k OTR car.

 

[Mart2912]

In the OPs deal you pay £25k for a £21.2k OTR car.

Only if he decides to keep it after the 4 year term. With PCP, he can simply give it back, or trade it in for another, or keep it and continue to pay it off.

If he does go for a personal loan, he will be paying a lot more than 224 per month over the same 4 year period.

 

[muon]

Only if he decides to keep it after the 4 year term. With PCP, he can simply give it back, or trade it in for another, or keep it and continue to pay it off.

If he does go for a personal loan, he will be paying a lot more than 224 per month over the same 4 year period.

Yep, but the OP will have paid 6k interest instead of as in the Octavia PCP, building actual equity in the car.

 

[EvilRob]

The OPs deal is £18884 (£17884 on credit) with 6.7% APR.

6.7% APR is quite a lot to be paying over 4 years. Total amount payable shows that you end up paying roughly £6k in interest (£25k - £18.9k).

The advantage of a personal loan (even if the rate isn't much better) is that you can pay the loan off early without much of a penalty and avoid loads of interest.

The interest is £3780. The rest of that 6k difference is manufacturer contribution.

 

[Jotun]

No. It's £2k less than list price and you're paying a massive 6.7% APR.

The OPs deal is £18884 (£17884 on credit) with 6.7% APR.

6.7 isn't great but it's not OMGINTERESTZ - unless you have a very good credit rating then a personal loan won't be much cheaper.

Just to point out it's 6.7% representative, not 6.7% APR. Unless I'm mistaken, this means that the actual APR is higher than 6.7%, but they average the total amount of interest paid divided by the number of years and amount of credit and come to 6.7%

 

[iaind]

Just to point out it's 6.7% representative, not 6.7% APR. Unless I'm mistaken, this means that the actual APR is higher than 6.7%, but they average the total amount of interest paid divided by the number of years and amount of credit and come to 6.7%

Representative just means they've taken into account all the charges - the interest is not higher than 6.7%

You're thinking of "flat" interest rates

 

[jellybeard999]

It IS APR - the Annual Percentage Rate.

The rate MAY be higher than 6.7%

Representative just means that it's the rate most people are offered. Your risk profile may mean that you are charged more and you aren't guaranteed to get the representative rate.

Where credit cards or loans use a representative APR, this means 51% of successful applicants will be given the stated interest rate.

If a loan is advertised as being 7.5% representative APR, this means 51% of accepted applicants have to get 7.5% as their rate. The other 49% could get a different rate (which is usually higher).

Of course, some people will be rejected outright.

http://www.moneysavingexpert.com/loans/personal-loans-apr-examples

 

[Jotun]

Representative just means they've taken into account all the charges - the interest is not higher than 6.7%

You're thinking of "flat" interest rates

Ah right you are! Just read a bit more about it and that was indeed what I had in mind.