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APR on bmw finance
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01-30-2008, 05:50 PM | #67 |
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01-30-2008, 06:23 PM | #68 | |
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That is completely wrong. You have got it all arse about tit!! http://www.moneysavingexpert.com/loa...te-loan-danger |
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01-31-2008, 02:52 AM | #69 | |
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01-31-2008, 02:57 AM | #70 |
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That is why a balanced lease payments scheme is better for someone who may not want to stay in the agreement for the whole term.
Better to pay interest on a monthly basis and have it added to the amount remaining, you always know where you are then, it is in front of you in black and white. |
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01-31-2008, 04:00 AM | #71 | ||
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The big difference is the loan is variable, so any changes in the bank interest rate can be reflected within the loan. If we continue to use your Rule of 78 example, but increase the rate to 6% in the 2nd period, the statement would be £920.19 + £9.20 (£920.19 x 6% x 11/66[remember there is only 11 months, so the sum is 66,not 78]) - £88.67, leaving a closing balance of £840.72. The new repayment figure reflects the increased interest rate and that there is only 11 months left on the agreement. |
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01-31-2008, 04:06 AM | #72 | |
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01-31-2008, 04:43 AM | #73 |
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When you mean discount for early settlement, do you mean when you get a statement saying balance outstanding X, less rebate (or discount) Y, total amount due Z? Because if so, it's con! And I know because that what I use to do when I was in this game! It's a marketing trick, as hidden in the total amount is a penalty charge I'm stuffing you with, but becauase I have include te words rebate or discount and everything looks right, you think I'm a really nice guy to give some money back!
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01-31-2008, 09:18 AM | #74 | |
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I've actually written a simple spreadsheet now, which calculates the settlement value for my loan for every month based on the 'rule of 78'. I've added a column which provides a true monthly cost: (Settlement Figure + Amount Paid to Date - income from resale)/no of months I think I have finally cracked the balanced payments concept as well .. and it does look as if you are correct in that it just works like a repayment mortgage: http://www.vcwestmidlands.co.uk/News...07%20.html Last edited by NFS; 01-31-2008 at 09:40 AM.. |
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01-31-2008, 10:05 AM | #75 | |
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01-31-2008, 10:45 AM | #76 | |
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There is a difference in the cumulative interest you would be charged at a given time, but it is less significant than I thought it might be. Some of this difference is presumably also down to the fact that 'rule of 78' overstates the interest. |
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01-31-2008, 01:10 PM | #77 | |
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01-31-2008, 03:36 PM | #78 |
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If anyone wants, I'll provide a link to a spreadsheet that you can download and put in the loan you get for the car and the payments you make back so you can determine the APR. The spreadsheet works on the basis that interest is calculated and compounded monthly.
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01-31-2008, 04:36 PM | #79 |
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This would be really useful for a lot of people, since BMW Finance (and others) are often a little shy about stating the APR.
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01-31-2008, 04:59 PM | #80 |
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I think they tend to be shy about quoting APR as they can only quote an equivalent as most of their agreements are flat rate, which they have to state, but only of you ask.
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02-01-2008, 06:11 PM | #81 |
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Let me tidy it up and upload it over the next few days.
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02-03-2008, 02:50 PM | #82 |
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Here is my link for finance comparisons. It calculates the APR and you can insert penalties and early repayments etc. The lowest APR wins and it is what I will use when I compare finances in a few months time.
It is not particularly tidy, but it works. www.redoak.co.uk/BMWFinance.xls
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02-03-2008, 04:37 PM | #83 | |
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Works really well. I actually wanted to make sure that my dealer had really given me the APR that we discussed. He agreed to match a quote I had from Lombard, but I didn't notice until recently that the finance agreement doesn't state any interest rate (flat or APR). I've done a similar spreadsheet myself which maps the payments against the settlement figure (based on rule of 78) but was struggling to check the APR - mainly because I couldn't figure out how to deal with the lump sum final payment. The good news is that it works out correctly and the dealer cheat me |
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02-04-2008, 03:20 PM | #84 | |
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Thanks for all the advice, I have taken a lot of notes and here is my new finance figures which I got through a broker. What you guys think? Does it make a difference if I decrease the baloon and increase the payments? I will sign on the dotted line soon... Hire purchase agreement Cash Price = £53995 Cash Deposit = £24000 Balence to Finance = £29995 Term = 36 Monthly Payment = £315.58 Final Payment = £26000 |
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02-04-2008, 04:08 PM | #85 | |
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The second HP option is 9.02% In those circumstances, I'd go for the second option. But, please seek other advise too.
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02-04-2008, 04:12 PM | #86 |
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I have done a small update to the spreadsheet. It only affects people who make lump sum deposits during the loan period. The update is on redoak.
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02-04-2008, 04:15 PM | #87 | |
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If you boys are in favour, I'll turn this into a 'sticky' & move it into off-topic, ok? Viv |
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02-04-2008, 04:20 PM | #88 |
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Fine by me and another member has emailed me another spreadsheet that is more sophisticated. I'm all for another link too. I am glad this thread has created so much interest - we want our cars to cost us as little as possible.
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