Hello i am considering buying a volvo s80 d5 priced £10950,the dealer quoted me a 5% flat rate with a deposit of £700 which he states would come out at a monthly payment of £260.15,but i have done the maths and this does not add up,any ideas what he is upto?

What type of finance is it? There are many different kinds such as HP, PCP etc.

It sounds like there will be a balloon payment at the end of the term.

Rob

Hi --- A flat rate is quoted to make the deal seem cheaper, but a flat rate when expressed as APR works out at roughly double... so that will be around 10% APR.

Give us some clues and I'll calculate it for you. what was the term? 36mths/48months/60 months? Have you included any payment protection?

Gary,

At a 5% flat rate a loan of £10'250 would be:-

60 x £213

48 x £256

36 x £327

normally with a documentation fee of about a hundred quid on top of the first payment. His £260 might be him being crap with a calculator but is possible to spread the documentation fee across the term (makes the first payment easier but you have to pay interest of a doc fee then...) which would fit with 48 months.

If it is 60 months then it is likely that he has tried to stitch you into a payment protection scheme - which are generally not worth a toss (apart from £50 in the salesman's ass pocket....).

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.