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PCP - what is the APR?

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  • 24-01-2021 2:29am
    #1
    Dubsey
    Registered Users Posts: 174 ✭✭


    Hi all.

    We are currently going back to our dealer for a new PCP quote at the end of the three-year term.

    See attached screen grab off the offer.

    Am I correct in saying that the APR is approximately 2.8%?

    Thanks in advance.

    D.


Comments

  • Options
    #2
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    The kodoaiq is quoted at 3.9% on skoda site currently. You must check with dealer on actual rate though. However that rate would equate to the interest paid based on pcp calculator on skoda website.


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    #3
    Pacifico
    Closed Accounts Posts: 5,115 ✭✭✭Pacifico


    Going by the figures in your attachment is it not something like 5.5%?


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    #4
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    Hi Pacifico,

    Thanks for the response.

    Could you clarify how you arrived at that?


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    #5
    User1998
    Registered Users Posts: 5,829 ✭✭✭User1998


    Surely the APR is one of the first questions you should have asked the dealer? Why don’t you just ring them now and ask?


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    #6
    Penalty
    Registered Users Posts: 84 ✭✭Penalty


    a rough estimate based on the above is about 3.6% but what is the term of this new agreement. What is the GMFV at the end?

    The rate will be printed somewhere on the offer.


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  • Options
    #7
    flytherain
    Registered Users Posts: 24 ✭flytherain


    Dubsey wrote: »
    Hi all.

    We are currently going back to our dealer for a new PCP quote at the end of the three-year term.

    See attached screen grab off the offer.

    Am I correct in saying that the APR is approximately 2.8%?

    Thanks in advance.

    D.


    you need to know GMFV. and then use that Figure 4 (40535.75) Minus GMFV= amount of money they lend to you over three years terms on PCP. multiply by the rate you are agreed on PCP.

    https://www.msl.ie/en/skoda/new/kodiaq


  • Options
    #8
    [Deleted User]
    Posts: 596 ✭ [Deleted User]


    flytherain wrote: »
    you need to know GMFV. and then use that Figure 4 (40535.75) Minus GMFV= amount of money they lend to you over three years terms on PCP. multiply by the rate you are agreed on PCP.

    https://www.msl.ie/en/skoda/new/kodiaq

    Is the GMFV not line 3 - Settlement?


  • Options
    #9
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    [Deleted User] wrote: »
    Is the GMFV not line 3 - Settlement?

    That's the finance on the car being traded in. The difference between 2 and 3 is the deposit which is deducted in 4 from 1.


  • Options
    #10
    [Deleted User]
    Posts: 596 ✭ [Deleted User]


    Lantus wrote: »
    That's the finance on the car being traded in. The difference between 2 and 3 is the deposit which is deducted in 4 from 1.

    Ah, I see now. In that case, the attachment in the OP appears to be for a HP purchase, not PCP.


  • Options
    #11
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    [Deleted User] wrote: »
    Ah, I see now. In that case, the attachment in the OP appears to be for a HP purchase, not PCP.

    Pcp is a type of hp so it's not incorrect. There is nothing on payments whatsoever. Needs an additional layer of info beyond the headline summary.


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    #12
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    Thanks for the responses.
    User1998 wrote: »
    Surely the APR is one of the first questions you should have asked the dealer? Why don’t you just ring them now and ask?

    Hi - Haven't asked the dealer anything yet. I'm one of those people who like to understand the nuts and bolts. If they have fudged the APR rate that is being advised online then I'd like to know about it before I engage further with them. so the question is - is there enough info provided to define what the APR is.

    My understanding of the figures:

    1 - Price of the new car
    2 - Price they are allowing on the care we have (market value)(although it is worth a few grand more based on other similar models advertised but I guess they do need to make money off this)
    3 - The GMFV - I believe.
    4 - Amount financed which includes the GMFV (is this right?)(doesn't seem right - why would I be paying interest on the value of a car that I could be handing back again)
    5 - Interest charged.

    Is the APR not 5 expressed as a % of 4?

    So 3474/40535 * 100 = 8.5%?

    Or because it is the annual rate does this then need to be divided by 3?

    Which would bring me back to my original 2.8% value.


  • Options
    #13
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    Sorry guys.

    Payments now attached.

    So number 3 on my previous post isn't the GMV then.


  • Options
    #14
    Smee_Again
    Registered Users Posts: 1,990 ✭✭✭Smee_Again


    Dubsey wrote: »
    Thanks for the responses.



    Hi - Haven't asked the dealer anything yet. I'm one of those people who like to understand the nuts and bolts. If they have fudged the APR rate that is being advised online then I'd like to know about it before I engage further with them. so the question is - is there enough info provided to define what the APR is.

    My understanding of the figures:

    1 - Price of the new car
    2 - Price they are allowing on the care we have (market value)(although it is worth a few grand more based on other similar models advertised but I guess they do need to make money off this)
    3 - The GMFV - I believe.
    4 - Amount financed which includes the GMFV (is this right?)(doesn't seem right - why would I be paying interest on the value of a car that I could be handing back again)
    5 - Interest charged.

    Is the APR not 5 expressed as a % of 4?

    So 3474/40535 * 100 = 8.5%?

    Or because it is the annual rate does this then need to be divided by 3?

    Which would bring me back to my original 2.8% value.

    Thats not how you calculate APR.

    The APR rate is about 5.4%


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    #15
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    Can you demonstrate how you calculated that?


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    #16
    Smee_Again
    Registered Users Posts: 1,990 ✭✭✭Smee_Again


    Dubsey wrote: »
    Can you demonstrate how you calculated that?

    Never mind, I'm wrong. I didn't see the payment schedule, I thought it was HP and you were paying it all off over 3 years which you aren't.


  • Options
    #17
    db
    Registered Users Posts: 1,078 ✭✭✭db


    Use a PCP APR calculator and slot in your numbers. To get the same monthly repayment and GFMV will give an APR of approx 4%.


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    #18
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    So sounds right then.

    Thanks all.


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    #19
    Lantus
    Registered Users Posts: 3,027 ✭✭✭Lantus


    You need to sit the dealer and have them explain every figure and take notes as you see fit. I've done it several times and it doesn't hurt. You will be better armed and it saves times and will educate you tremendously.

    If your spending 5k or 50k you need to really understand the figures.

    If this is a pcp you also need the gmfv and the apr and the monthly figures.


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    #20
    L-M
    Registered Users Posts: 23,694 ✭✭✭✭L-M


    Number 3 or the “settlement” is what you owe on your current car as of today.

    So you’re trade in is 26, less what you owe. 17.

    This leaves you with a deposit then of 9000.

    The new car is 49000. Your deposit 9000. Amount now financed on the new contract 40k.

    Then in 3 years you’ll owe 20k(GMFV) Rinse and repeat.

    PCP Apr is hard to calculate because you’re charged interest on the GMFV also.

    Just so you know dealers can’t “fudge” the figures. The APR on that particular model would be fixed.

    You should look at the Tiguan Allspace if you’re after a manual. Better spec, 0 percent APR and a €2,000 deposit contribution.


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    #21
    Dubsey
    Registered Users Posts: 174 ✭✭Dubsey


    Hi L-M,

    Thanks for your message.

    Yeah we will consider it. The other one we may look at is the Peugeot 5008.

    But we love the styling of the Kodiaq and we have a Superb Sportline at the minute that has been a great car.

    D.


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