Car financing...

[Riz_RS4]

it's only money after all

Yup.... wooohooo [img]images/graemlins/tung2.gif[/img]
[img]images/rsul/40412-61806-group.jpg[/img]
**group hug**
[img]images/rsul/40412-61806-group.jpg[/img]

Riz

[martian]

Oh here we go again
Within interest rate calculations there is a something called the "the rule of 80/20" This essentially means that you can't take one headline number and divide/times it to get an exact same calculation.

Hence your taking my (approx) 2.1 multiplcation of the flat rate to give the APR does not reference back when you divide it to try and attain the flat % rate.

I am reasonably up to speed on these things .

Sorry your 80/20 rule does not apply here as your 2.1 factor applies both ways -if APR =Flatrate*2.1 then Flatrate= APR/2.1- the 80/20 rule applies to adding perecentages to values (eg VAT) not multiplying/dividing by a constant factor.
I think the problem is that the 2.1 factor is basically incorrect- by your calculation B of E Base of 3.75% would give an APR of 7.9%- and anybody lending at less than 7.9%is lending under base. Does'nt make sense to me.
Anyway the point is that Flatrate of 3.5% as quoted to Riz is VERY competitive.
Phew [img]images/graemlins/spineyes.gif[/img]

[Riz_RS4]

Anyway the point is that Flatrate of 3.5% as quoted to Riz is VERY competitive.

hee hee..... i will go to dealer and sort more figures out.. pretty sure it was 3.75 for the 60 months and 3.5% for less than 60 months.

Cheers [img]images/graemlins/sloppy.gif[/img]

Riz [img]images/graemlins/beerchug.gif[/img]

[runrowsam]

The handbags are really out here! Although I must say I think I agree with our man Martian. Although that may be because he has the dog's RS6. Maybe.
[img]images/graemlins/scared.gif[/img]

Rock on
Sam [img]images/graemlins/thumbs.gif[/img]

[peterb]

Intrest per year = £749.96

... and that £20,000 left in a high interest account would earn what? Most of my cash is earning 4.05% at the moment, so, assuming standard rate tax, it would give £648 in a year (if you pay 40% tax, it would only be £486 a year). So, you would be around £100/year better off withdrawing savings to purchase the car.

Seem`s simple to me....... and it was cheaper than a loan from the bank which came in at £410 per month approx.

Remember the bank of england will push intrest rates up again, or so i hear.

Of course, if rates do go up, and your loan really is a fixed rate, you might reach a point where you end up better off but, assuming standard rate tax, the interest on your savings would have to reach 4.68% to achieve this. Of course, this ignores the year-on-year compounding of the interest on your savings. Erosion of your savings, due to inflation, will also have some bearing, and if interest goes up, so will inflation.

All in all, I would have to obtain a significantly better financing deal before I'd be persuaded to borrow for my car purchases.

[Gareth]

Oh here we go again
Within interest rate calculations there is a something called the "the rule of 80/20" This essentially means that you can't take one headline number and divide/times it to get an exact same calculation.

Hence your taking my (approx) 2.1 multiplcation of the flat rate to give the APR does not reference back when you divide it to try and attain the flat % rate.

I am reasonably up to speed on these things .

Sorry your 80/20 rule does not apply here as your 2.1 factor applies both ways -if APR =Flatrate*2.1 then Flatrate= APR/2.1- the 80/20 rule applies to adding perecentages to values (eg VAT) not multiplying/dividing by a constant factor.
I think the problem is that the 2.1 factor is basically incorrect- by your calculation B of E Base of 3.75% would give an APR of 7.9%- and anybody lending at less than 7.9%is lending under base. Does'nt make sense to me.
Anyway the point is that Flatrate of 3.5% as quoted to Riz is VERY competitive.
Phew [img]images/graemlins/spineyes.gif[/img]

Oh FFS I give up...go buy a damn car with your cash then.. [img]images/graemlins/rant.gif[/img]

If you're going to the meet on the 28th we can debate it over a pint maybe...paid in cash of course as we wouldn't want to trouble the finance question.. [img]images/graemlins/ban.gif[/img] [img]images/graemlins/062802drink_prv.gif[/img]

p.s. If you're so sure on your sums what's the flat rate of, for example, 5.6% APR?? [img]images/graemlins/sloppy.gif[/img]

[martian]

what's the flat rate of, for example, 5.6% APR??

The APR is a 'levelling' quote to make all rates comparable. The figure is derived from:
- the interest you must pay;
- any other charges you must pay - for example, an arrangement fee or the cost of payment insurance;
- when and how often you pay the interest and charges.

So to work back from 5.6% is impossible without knowing the loan parameters. For example Riz's loan of 3.5% sounds great but if they stuff him with arrangement fees and yearly calculated interest then the APR would rise. If there are no fees and the interest is calculated daily then the APR will be 3.5%.
That's my understanding anyway... but you're right, we need a Guru. There's never one around when you need one.
Cheers

[Gareth]

I'm sure neither of us really want this post to continue on forever but I'm afraid I have to come back to you on your assumptions here Martian [img]images/graemlins/crazy.gif[/img]

All my current, and previous, finance deals are based on the balanced payment method. With this there is no arrangement fee and the interest is calculated daily/weekly/monthly. As a result I am paying off both the interest and capital from day one as opposed to most PCP's where you pay only interest for the first year as it's front loaded. Then years 2,3, 4 and 5 etc are on a decreasing scale of interest loading.

Your comment on Riz's quote that without arrangement fees's and if the interest is calculated daily it would equate to an APR of 3.5 % is - I'm sorry to say- completely wrong [img]images/graemlins/stupid.gif[/img]

If you can find anyone who quote for a loan of 3.5% APR you should let us all know so we can all borrow money for less than the FHBR and the Bank of England Base Rate [img]images/graemlins/3flypigs.gif[/img]

I'm more than happy for any finance guru to shed some more light here but as I change my cars/finance arrangements on a pretty frequent basis (ok too many times a year [img]images/graemlins/blush.gif[/img] 7 cars last for example.. ahem.. [img]images/graemlins/1syellow1.gif[/img] ) I feel that I'm reasonably up to speed on the subject [img]images/graemlins/033102bigblink_1_prv.gif[/img]

p.s. either way the first pint is on me [img]images/graemlins/beerchug.gif[/img]

[martian]

If you can find anyone who quote for a loan of 3.5% APR you should let us all know so we can all borrow money for less than the FHBR and the Bank of England Base Rate :

Gareth- I was not only incorrect I was misleading as well- the FLAT RATE of 3.5% (which IS under base) equates to 4.3% APR- which if you remember how it all started [img]images/graemlins/sleeping_2.gif[/img]
is NOT a factor of 2.1
You CAN borrow money under bank of England Base Rate but then they'll nick it back off you another way- like not discounting the car like they would have as a cash buyer. It's currently easy to borrow under base on a mortgage eg HSBC are offering 3 yrs @ 3.5% fixed- but I am losing the will to live on this one and I think we probably both have valid, but not exclusively correct, viewpoints.
Looking forward to the [img]images/graemlins/beerchug.gif[/img] (one day!!)

[Gareth]

Let's agree to disagree on this one and worry about more important issues...like the terrible mpg figures for our respective Audi V8's [img]images/graemlins/boohoo.gif[/img] [img]images/graemlins/s4addict.gif[/img]

[Riz_RS4]

guys guys guys... chill [img]images/graemlins/spineyes.gif[/img]
Its only money... more to life than just money....

Riz [img]images/graemlins/s3addict.gif[/img]

[JohnW]

guys guys guys... chill [img]images/graemlins/spineyes.gif[/img]
Its only money... more to life than just money....

OH NO THERE'S NOT !!! [img]images/graemlins/grin.gif[/img] [img]images/graemlins/jump.gif[/img]

btw, Jon's contact got me a rate around 2.7% over 3 years (flat, apr, who cares !)

[martian]

If you can find anyone who quote for a loan of 3.5% APR you should let us all know so we can all borrow money for less than the FHBR and the Bank of England Base Rate [img]images/graemlins/3flypigs.gif[/img]

Well you said to let you know.....
http://www.alfaromeo.co.uk/PopUps/offer ... ce_147.gif

.... you might not want one but it proves it does happen [img]images/graemlins/<beep>_you.gif[/img]

[Riz_RS4]

Oooops

Riz

[Gareth]

If you can find anyone who quote for a loan of 3.5% APR you should let us all know so we can all borrow money for less than the FHBR and the Bank of England Base Rate [img]images/graemlins/3flypigs.gif[/img]

Well you said to let you know.....
http://www.alfaromeo.co.uk/PopUps/offer ... ce_147.gif

.... you might not want one but it proves it does happen [img]images/graemlins/<beep>_you.gif[/img]

It does happen...but only cars that nobody wants hence they give the finance away.. [img]images/graemlins/062802beat_prv.gif[/img]

Think you'll find that Kia and Hyundai are also pretty competitive if low finance is the only criteria... [img]images/graemlins/boohoo.gif[/img]

However in the US it's easy to get 0% APR deals on most prestige brands but we here in Europe subsidise that level of finance [img]images/graemlins/033102bad_1_prv.gif[/img]