MK5 Golf GTI
General => Random Chat => Topic started by: no golf clubs at all on April 23, 2011, 07:09:06 pm
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Anyone ever bought a car this way?
On the face of it. It is madness but in reality I change every 3 years or so and always have come kind of car loan/ monthly payment.
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Used to do them as I have a car allowance with my job, to me for certain types/values of car they can work well, the Clio like Tony D has is a good example of a PCP deal working well :happy2:
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It works well if its a car that won't depreciate much i.e. high end cars. Wouldn't do it on a corsa ...
Debated going down this road when I bought the golf but just went for old fashioned HP. My thinking at the time was that if I went PCP I would be spunking a heap of money into something every month and have nothing to show for it at the end. So I ended up with an older car than I could have had if I had gone with PCP.
However, I recently went on a test drive of an A3 (2.0 TDI S line) at an Audi dealer. Looking at the PCP figures it was going to work out cheaper a month than what I'm already on and the residual value of the car was based on 7k. I have never seen a 5 year old A3 TDI go for that little and the garage confirmed that they always leave enough 'equity' at the end of the deal to move you into a newer car (in their interest I guess!).
They also said that about 70% of cars sold with finance through them are on PCP.
I've lost my hang up about PCP and will probably be how I buy my next car (not going for the Audi after all ...). Of course if you intend keeping your car forever its going to get a bit awkward at the end of the lease when you have to pay the balloon. But if you intend to change after 3 years or whatever does it really matter if you don't really own the thing? With the VW / Audi finance its very easy to change car whenever you want with no early repayment issues.
Just my thoughts.
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I've just bought a 330d coupe this way ... for the first time ever.
I'm not 100% sure it's the best thing but it ties me in more than HP ... which is a good thing as I need to stop changing cars every year !! That is my main reason for doing it - and the fact I could spend more than I would have .... as I say, not necessarily a good thing :laugh:
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I've bought cars cash, hp, personal loan and lease. Tbh none of it makes economic sense. May pcp this time. I get a car allowance of £500 per month anyway but I always like a change after 3 years.
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Its not rocket science you will be out of pocket this way. The car companies came up with this ingenious way of keeping us buying cars we really cant afford. I recently did the numbers on a Tiguan and it worked out about £3500 more for PCP over the term, and that was using there final guestimation figures.
This way works for many people as it brings cars out of reach into range. As long as you do the sums and are willing to pay the extra over the term then alls good. :driver:
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Ive always gone by the rule that if you cant buy a car outright with cash, then you dont buy that car. I wouldnt ever want to be tied down, or in debt, over a car.
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I'm on my 3rd PCP as they work really well for my current circumstances :smiley:
After blowing a huge amount of capital over the last few years buying cars outright (11K on a Saxo VTS - i know, i know lol!, 12K on a MK4 1.8T, 17K on a new Bora and 10K into my first MK5 GTi) i decided to treat cars as a rental proposition from then on...
I set myself an 'enjoyment fund' figure that i'm happy to pay per month for the car i want to drive and sort the deal accordingly on a 3 year PCP, on all the deals i've had i have changed cars before the end of the term no problem and without the huge financial losses people assume will come with PCPs, admittedly you have to be mindful of which type of car you choose but most VAG stuff is a safe bet imo :wink:
As a quick ready reckoner a 3 year PCP will work out the same per month as 5 year straight finance on the same car, i like the option to hand back the car if needed and because of the GFV i'll never be in a negative equity situation, i also chose a lower mileage allowance than i do per year to keep the payments low as mileage matters not if you trade it in and the excess mileage charge can work out lower than the extra payment per month should you want to hand back...
It's not for everyone granted, but imo shouldnt be dismissed out of hand :happy2:
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What ever works for the individuals circumstances, ive done both pcp on my first two saxo's, :fighting: i know, but i was 17 and i got 2 years free insurance, so it saved me a fortune in insurance costs compared to the car costs. Have recently looked at this sort of deal again, but im not to happy about putting a lump sum down initially as in theory if i hand the car back after 3 years i have lost this lump sum of money and walk away with nothing.
My last two cars have been small personal loans, once paid car is mine and i can keep as long as i want. My thoughts when i find the right ED30/pirelli is to do the same, for example lump sum in from sale of my old car then the rest on a loan, this way if i ever need to sell i can and still keep the money from the equity in the car.
Each to there own....
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Cars are a slippery slope ....
I owned an S2000 outright.
I sold it and bought an Edition 30 .... small loan
I sold the Edition 30 and bought a Z4M Roadster - bigger loan.
I sold the Z4M and bought a 320d coupe - larger loan again.
I sold the 320d and bought a 330d - PCP was the way forward.
I have been like a drug addict - hopefully the PCP tie in is my methadone :laugh:
Edited to add the addiction was quick and brutal - the above only relates to the last 4 years :jumping:
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Cars are a slippery slope ....
I owned an S2000 outright.
I sold it and bought an Edition 30 .... small loan
I sold the Edition 30 and bought a Z4M Roadster - bigger loan.
I sold the Z4M and bought a 320d coupe - larger loan again.
I sold the 320d and bought a 330d - PCP was the way forward.
I have been like a drug addict - hopefully the PCP tie in is my methadone :laugh:
Amen to that! :signLOL:
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Cars are a slippery slope ....
I owned an S2000 outright.
I sold it and bought an Edition 30 .... small loan
I sold the Edition 30 and bought a Z4M Roadster - bigger loan.
I sold the Z4M and bought a 320d coupe - larger loan again.
I sold the 320d and bought a 330d - PCP was the way forward.
I have been like a drug addict - hopefully the PCP tie in is my methadone :laugh:
Edited to add the addiction was quick and brutal - the above only relates to the last 4 years :jumping:
Ah so thats what it stands for PCP angel dust :laugh: the drug of choice. in trading places.
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Incidentally my PCP is up in 5 months and as yet i really can't bear to part with the '30 or find anything that really floats my boat for a change! :surprised:
So may well buy it off them! Although will try something that has worked in the past on my MK5 GTi PCP first.... make all the right noises for a hand back then make an offer lower than the GFV, last time they didnt seem to want the hassle of being stuck with the car and took the offer although i admit the market has changed and they may fancy making some cash on the car this time round...
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Out of interest, what happens with PCP finance if you lose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance the debt...
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Dependant on teh time you have been paying on the car, you can just hand it back. I did on my 2nd Saxo in 2003, i'd had it 2 years into the 3 year agreement and wanted a 306, so i went in asked about my options, gave them the keys back. May depend on the dealership.
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Out of interest, what happens with PCP finance if you loose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance th debt...
Dont quote me on this but i think if you are over half way through the term and cant afford the up keep then you can just hand it back to them. :innocent: I think you end up with a big X on your credit rating though. :happy2:
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Out of interest, what happens with PCP finance if you lose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance the debt...
Exactly the same if you couldnt keep up loan payments to the bank or finance house...
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Dont quote me on this but i think if you are over half way through the term and cant afford the up keep then you can just hand it back to them. :innocent: I think you end up with a big X on your credit rating though. :happy2:
Although i am technically quoting you lol, you are quite correct TC :happy2:
Due to recent changes and as long as its done correctly you no longer end up with the credit rating of a Jeremy Kyle guest...
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Out of interest, what happens with PCP finance if you lose your job, or for any other reason are unable to make the monthly repayments? I'm guessing you don't own the car, so you'd be unable to sell it to finance the debt...
Exactly the same if you couldnt keep up loan payments to the bank or finance house...
Is that a correct comparison though? If you finance a car through an unsecured loan and are unable to keep up payments on the loan, you can sell the car to pay off (hopefully) most of the debt, however if you end up being unable to keep up PCP payments won't they reclaim the car and pursue you for the debt for the remainder of the term of the agreement?
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Yeah i'd argue it was a decent comparison imo...
Car A: Bought for 10K with an unsecured loan, 2 moths later you cant afford the repayments so sell for say 8K and have to find the remainder to clear the loan...
Car B: Bought for 10K on PCP, 2 months later you cant afford the repayments so sell for say 8K and have to find the remainder to clear the loan...
Assuming that both cars are bought for the same amount and therefore the same amount of financed money and a similiar APR you are effectively in the same boat in a brown river without a paddle either way...
I've bought and know plenty of people who have bought cars owned by finance companies, it's suprisingly easy nowadays :happy2:
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Ah right, to be honest I wasn't aware you were able to sell the car with a PCP deal until you had reached the end of the agreement and paid the final payment.
So what's in it for them? Presumably the total amount you pay is greater in the long run, especially if you take the option to purchase?
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I'm glad I brung this up. :popcornsoda:
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I'm glad I brung this up. :popcornsoda:
Yeah, I'll be honest, I've never looked into them. Cheers for the info Beddie, very interesting :happy2:
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Ah right, to be honest I wasn't aware you were able to sell the car with a PCP deal until you had reached the end of the agreement and paid the final payment.
So what's in it for them? Presumably the total amount you pay is greater in the long run, especially if you take the option to purchase?
There are many ways to get out of the agreement in the same way as you would with a straight finance deal...
One way i have done it when buying is to have the seller get a settlement figure, head to the bank with them and you pay the finance company the outstanding amount and any extra to the seller, done correctly its very simple and the reverse if you are the seller :happy2:
I've 'sold' 3 cars that were under a PCP deal before the end of the term, when i say sold i mean traded in but it's effectively the same, new car dealer gets a settlement figure and pays the finance company the outstanding balance and any extra to me for a deposit on the new car...
I can get a settlement figure over the phone in 30 secs..
Yeah you are correct that there is a financial penalty to a PCP over a straight finance or loan deal if you take both deals to completion (including balloon on the PCP)
In the case of my current ED30 i will pay £897 more for the 3 year PCP if i choose to pay the balloon than i would have done if i had took 5 years finance, this for me is worth the extra options i have within the PCP and also allows me to get a better deal if i wanted to pay the balloon, by that i mean that the interest rate is much lower now than when i started so i have the option to finance the remaining balloon at a lower finance rate and hence clawing back some of my deficit...
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I bought my car on PCP. I had a relative who changes cars every three years and at the time it seemed like a good idea. Little did I know how much I was going to fall in love with the car, especially an ED30.
Paying it off in full makes life a lot easier.
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Couple of things i forgot to point out... :happy2:
Modding a car on PCP is technically frowned upon as the finance house have an interest in the car until at the very least the halfway stage, never stopped me although i dont go mad with the mods on any car tbh and it's never presented a problem and the VW dealers never bat an eyelid, keep up the payments and dont hand it back dragging its arse on coilies and running stage 3 and it's usually fine lol
I do however remember a guy on seatcupra.net who had a very heavily modded MK2 Cupra which developed an ECU/starting fault after an intercooler fit, had it towed to Seat and demanded they fix it under warranty etc, got a bit shouty when they couldnt and then threw his toys out at them, they retaliated by throwing their toys out and demanding he return their car to standard and pay the remaining finance, so play nice is the moral of that story lol!
Also you are not obliged to take the PCP through VW/Audi etc, there are plenty of 3rd party companies who will fund the deal on PCP via the supplying dealer on your behalf and you can use this facility to get a better deal from the dealer or simply get a better deal from the 3rd party...
As with any finance deal, resist the temptation to have the road tax/gap/autosh*te etc thrown on the deal as you'll pay interest on it all and just make sure you go over ever aspect of the deal a good few times before pulling the trigger :happy2:
PCPs are in no way the golden egg of cheap car buying but can work extremely well on the right car and personal circumstances, for me they retain monthly affordability and some stability of the car value in what is an uncertain market but i appreciate that some people will find the idea of a PCP off putting :smiley:
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I was under the impression the 'PCP' is a personal lease plan so you never own the car until that 50% payed thing and even then you need a letter of permission to sell it?
You can walk in at any time and hand the keys back?
Or have things changed now because people were just walking in and handing in cars which weren't worth sh*t?
I always go on money supermarket and get the cheapest loan as your in a good bargaining position and you pay a bit off every month.
AND ITS YOURS TO SELL, MOD, CRASH, KEEP! Kind of! :signLOL:
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Yeah I reckon if you are the person who takes a car loan out for 3 years and keeps the car for six then it's not for you.
If like me you accept there's likely to be a monthly charge then it makes less odds.
I'm in the position where I'm paying something for the next 2 years on a 5 year old car. I can start again from scratch, get a dsg GTD (with 3k) 2009 on it for an additional £100 per month for 3 years. At the end of the deal I'll have to pay £8k to keep (no chance) or take the difference if greater to deposit a new one or walk.
Seems a lot for a 2009 golf. Which is why I posted really.
If I were sane I'd keep the gti for the two years then trade in but if I do I guess in 2 years I'll have a 7 year old car with 80000 miles on it as opposed to a 3.5 year old GTD (still warrantied under Vw extended) with 23k on it.
I am not sure about it tbh.
I may just check out a brand new car on a similar pcp package first. Though a new golf dsg these days with any spec hits the >£25,000 bracket! :sick:
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You can't hand back at any time as such without penalties. You can hand back penalty free however once you have paid at least half of your payments. So if you have a 36 month deal you can hand back after payment 18.
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Do any of you ever add up what the car actually costs on pcp or other finance ? My Sister had a 325 m sport coupe a few years ago , it was £700 a month (all servicing/tyres etc included) and after 3 years she gave it back and had nothing to show for it . She spent £25k and had nothing ! Seems ridiculous to me as i have always bought cars for cash with no finance :innocent:
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The £700 (after tax) a month really was the result of earning around £1200 month , so she had earnt £42k to pay for this car !
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^^ well your a lucky guy, not many people can afford to outlay such a massive amount of hard earned on a motor that will depreciate like a tarts knickers! Any sums that are done need to take into account the money you would lose every month while it's just sat out on the drive.
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With regards to penalties I learned this when I looked into it. VW and Audi (and presumably Seat and Skoda) use VW Financial Services. If you want to change car at any point in the contract to another car you can providing you stay within the group / use VWFS without penalty. I guess it would be a different story if you wanted to change to say a BMW / another finance provider.
Also in the small print of the VWFS HP agreement I've got at the moment it says as long as I'm half way though the term I can just hand the keys back if things were to get sticky and had no other option - I think this is pretty standard on any finance 'secured' on a car.
Personally I prefer to use car finance rather than a personal loan for buying a car as it is secured on the vehicle so worst comes to the worst you can always just give it back and apart from a black mark on your credit record if you do it in the first half of the agreement and probably some admin fee thats it. If things ever got that bad I doubt the credit mark would be the worst of my worries. With a personal loan there is the risk that you sell the car and it doesn't cover the settlement for the loan so I'd be without car and still have to pay off the loan. Worst case scenario obviously but it avoids that risk.
I also found (when I bought the golf) that the dealer finance rates were easily as good as what the banks were offering and there was room to negotiate on that too.
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^^ well your a lucky guy, not many people can afford to outlay such a massive amount of hard earned on a motor that will depreciate like a tarts knickers! Any sums that are done need to take into account the money you would lose every month while it's just sat out on the drive.
Indeed, I don't actually think that I'd consider not funding a car with finance. If I had £25,000 in cash the last thing I'd do is sink it into a depreciating asset. You're far better to use low cost finance and make your cash work much harder for you in other investments.
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I've was briefly looking at these to fund a Golf R. The monthly payments aren't too bad at a little over £500 a month, but the final lump sum is something like 13 grand. If I were blowing 500 squid a month on payments I'd never be able to save that sort of money to keep the car at the end as well. That means you hand it back or use it as a trade-in against another car, meaning another 3 years payments or no car!
Stupid idea, if you ask me. As stated above, they're just for people with champagne tastes and lemonade pockets who want a car they'd never normally be able to afford as a new purchase.
Golf R - £4000 deposit + 36 payments of £530 + £13000 final payment = £36K (or in all reality - a layout of £23000 and no car at the end of it!)
36 payments on a personal loan of £530 = a £16000 loan. Add that to your 4 grand deposit and suddenly you can only actually afford a £20K motor, but it will be yours to keep from the moment you've got the old debit card out of your pocket.
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Andrewparker... Tell me where you can invest cash that gives a better rate of return than you can from the borrowing rate? I'll put my money there immediately. How do you think the financial institutions make such vast profits?
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How many of us really at the end of a 3 or 4 or 5 year finance deal go on and keep the car for any meaningful period?
Most of us want a change, upgrade or just a newer car before it all goes Pete Tong.
Most normal salaried folk go from one finance deal to another.
In 2003 I bought a new mini with £15k cash. I watched that money fly out the sunroof by about £160 per month over 3 years.
So if monthlies are a given then you get to the point where a pcp makes some kind of sense.
:popcornsoda:
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Andrewparker... Tell me where you can invest cash that gives a better rate of return than you can from the borrowing rate? I'll put my money there immediately. How do you think the financial institutions make such vast profits?
My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Likewise, some of you have failed to view PCP for what it is - car rental. You find me any car rental company that'll give you a GTI for say £300/month. The difference between good and bad PCP is the deposit, you need it to be little or nothing. The final figure doesn't matter, if they lowball it, then you go trade it in somewhere else or sell it private and keep the difference... only a chump would hand back a car worth eg £10k to pay off a balloon of £7k.
If you have this in your mind, then they can make sense. PCP's have in "good times" been used to shaft people royally, now they're desperate to shift cars, it can be the cheapest way to fund them... just use your brain.
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Stupid idea, if you ask me. As stated above, they're just for people with champagne tastes and lemonade pockets who want a car they'd never normally be able to afford as a new purchase.
Ooooh i love a good t'internet sweeping generalisation.... :congrats:
Serious question time... I have an ED30 on a PCP so i assume you would feel i fit the above statement? Genuinely curious as to how you would come to that conclusion knowing nothing about myself or my financial situation? :happy2:
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My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Thought u were in IT....quite good in playing the markets too I see. That is a stonking return I have to say. :happy2:
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My personal take on the 3 PCP deals i have had since 2007....
Between 2001 and 2006 i spent £50,000 cash on buying 4 cars... despite owning them outright i still got bored with them, spent money modding them and watched the capital cash outlay in all of them depreciate before my very eyes, after some thought i decided to try and avoid ever blowing that much cash on a depreciating asset that i'm destined to change after 2-3 years anyway...
So i decided on a PCP and to treat cars as a rental proposition from then on, i never put more than £1500 deposit into any deal and keep the mileage allowance low as it matters not when trading in which i will always do as i simply cant be without a car for any length of time, PCPs allow me to factor out the depreciation cost and also to keep some emotional and financial detachment from the car, means i dont blow a load of cash on huge mods and dont get hung up on its falling value...
I set myself a self imposed limit of £300 a month for my car fund and buy accordingly, usually means i get to drive the car i really want rather than compromising, yeah i could save up for 3 years, live on beans etc but would i really want an ED30 by then?, probably not lol!
I'm open minded enough to realise it's not for everyone and for instance my uncle thinks i'm insane!, he's extremely proud of the fact he owns his car outright 'all paid for etc etc' and i'm sure it gives him great comfort telling everyone down the pub how ace he is for completely owning every single part of his 2000 Passat complete with paddling pool footwells :grin:
Guess i've just never really got the whole kudos thing about paying for a car with cash, really who cares if you do or not? The bank own my house but i'm still classed as a home owner...
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My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Thought u were in IT....quite good in playing the markets too I see. That is a stonking return I have to say. :happy2:
To be fair my profits were quite modest and I ringfenced the grand and started to play, was steady until the arse fell out of Barclays and gambled a chunk around 60p.
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To be fair my profits were quite modest and I ringfenced the grand and started to play, was steady until the arse fell out of Barclays and gambled a chunk around 60p.
i had a chance to buy something that had dropped to 30p....it's now back up to £2 (but it did float at £3!!!!)
still if i bought some (even just on a spread bet) could have made a nice packet on that in just 12 months. Ah well. :smiley:
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Andrewparker... Tell me where you can invest cash that gives a better rate of return than you can from the borrowing rate? I'll put my money there immediately. How do you think the financial institutions make such vast profits?
My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
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Another point.
Do you think anyone walking into Porsche/Aston/Ferrari does so with £100k of bank loan or their own savings in their pocket?? No, because anyone with that kind of money has the intelligence to realise the £70k it'll be worth when they swap in 2 years time will be getting a return elsewhere, instead of being dead money sat in a car.
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Andrewparker... Tell me where you can invest cash that gives a better rate of return than you can from the borrowing rate? I'll put my money there immediately. How do you think the financial institutions make such vast profits?
Realistic steady returns, looking at pooled collective investments - AXA distribution fund, average return pa of 10.72% over the last 31 years! If your a bit adventureous, then AXA Rosenberg Asia pacific ex japan fund, made close to 100% return over the last 5 years.
The retruns are out there, you just have to be prepared to leave your money for a period of time and take a degree of risk.
As mike has done, investing directly in shares of a particular company is a higher risk, but it does pay off. When the markets bottomed out not so long ago, people were making 50-60% easy within a few months.
If your not getting a rate equivalnet to inflation then you may as well not bother, as your money is eroding anyhow through inflation. No matter what people say interst rates are not going back up to 5% over night, its going to tak efew years before its anywhere near!
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My personal take on the 3 PCP deals i have had since 2007....
Between 2001 and 2006 i spent £50,000 cash on buying 4 cars... despite owning them outright i still got bored with them, spent money modding them and watched the capital cash outlay in all of them depreciate before my very eyes, after some thought i decided to try and avoid ever blowing that much cash on a depreciating asset that i'm destined to change after 2-3 years anyway...
So i decided on a PCP and to treat cars as a rental proposition from then on, i never put more than £1500 deposit into any deal and keep the mileage allowance low as it matters not when trading in which i will always do as i simply cant be without a car for any length of time, PCPs allow me to factor out the depreciation cost and also to keep some emotional and financial detachment from the car, means i dont blow a load of cash on huge mods and dont get hung up on its falling value...
I set myself a self imposed limit of £300 a month for my car fund and buy accordingly, usually means i get to drive the car i really want rather than compromising, yeah i could save up for 3 years, live on beans etc but would i really want an ED30 by then?, probably not lol!
I'm open minded enough to realise it's not for everyone and for instance my uncle thinks i'm insane!, he's extremely proud of the fact he owns his car outright 'all paid for etc etc' and i'm sure it gives him great comfort telling everyone down the pub how ace he is for completely owning every single part of his 2000 Passat complete with paddling pool footwells :grin:
Guess i've just never really got the whole kudos thing about paying for a car with cash, really who cares if you do or not? The bank own my house but i'm still classed as a home owner...
:congrats:
Your giving me ideas after our chat last night :signLOL:
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I must say, I've saved for and owned outright every car before the clutter - this is the first loan/PCP I've done, but in this instance it made so much more sense.
I rent the car for buttons, I don't particularly care about it because it's a "rental' car - I just enjoy it and in 18 months time I'll either trade it or sell it depending on what I want next. No way on earth would I hand it back for nothing, the same cars at 2 years old now are fetching £2-3k more than my GFV.
PCPs these days give worst case senario, they used to offer sky high Balloons and people really got stung with negative equity. Now, if the arse falls out of the market you've got the very last option of handing it back, typically there's a few grands equity in every deal because they want you to use that as a deposit on the next car.
All the money I took out of the Golf has gone into the house, an appreciating asset and my savings are doing very well elsewhere. The "play money" in shares I don't really count on, as I could blow it tomorrow - but in general as Frodo pointed out, the high street is a mugs and pensioners game, you want return you have to accept risk.
A PCP for the next car? Who knows, some of them are still a rip off, like the deal TC mentioned on the Tiguan, but you can't dismiss the good ones. You've just got to get it into your head it's just a fixed cost to rent a car for X years and ignore what it's "worth".
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I've had several VWFS PCP's and I tend to treat them as Hire Purchase arrangements but with a lower monthly payment. The price you pay for having the lower monthly payment is that you have to pay interest on the GFV and the balance of the loan. A bit like an interest only mortgage combined with a traditional repayment mortgage. Lower payments means that I have a more comfortable buffer on monthly spending should there be an unforeseen circumstance.
I always set the annual mileage at 10k miles as I rarely see out the term. You aren't restricted to selling the car to a dealer you simply settle the loan as if it were HP.
Interesting to read people's thoughts on levels of deposit with PCP's, I have quite a substantial deposit to put down on the next car but I'm not sure whether that's the right thing to do. The dealer has been able to manipulate the figures to offer varying monthly payments vs varying GFV's.
When I decide on what I'm spending/paying I always look at the total amount to pay over the term. If that looks affordable then I'm happy.
Some PCP's also carry additional offers, in the case of Audi A4 there was a £3000 deposit contribution offer which is a significant chunk of the interest. A3 is currently £650, £2500/£3175 on A5, £4000 on Q7 etc, etc.
Also interesting reading about investments. I have some money that I'd like to do more with but don't really know where to start with investments. :notworthy:
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My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Thought u were in IT....quite good in playing the markets too I see. That is a stonking return I have to say. :happy2:
To be fair my profits were quite modest and I ringfenced the grand and started to play, was steady until the arse fell out of Barclays and gambled a chunk around 60p.
any investment tips mate ?
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My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Thought u were in IT....quite good in playing the markets too I see. That is a stonking return I have to say. :happy2:
To be fair my profits were quite modest and I ringfenced the grand and started to play, was steady until the arse fell out of Barclays and gambled a chunk around 60p.
any investment tips mate ?
Give your money to Tony :signLOL:
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My stockmarket investment of £1000 4 years ago is now worth £24,940 at close of play Friday. Risky, but you can't just make a blanket statement that anything above high street savings rates is impossible.
Thought u were in IT....quite good in playing the markets too I see. That is a stonking return I have to say. :happy2:
To be fair my profits were quite modest and I ringfenced the grand and started to play, was steady until the arse fell out of Barclays and gambled a chunk around 60p.
any investment tips mate ?
Give your money to Tony :signLOL:
i would if he got me £24.000 back off £1000
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Yeah, never take advice off people on the Internet!!
It's a lot easier with online trading, as you set auto markers for buy and sell prices, so it manages itself on your day to day investments. These are modest gains though, taking risks for big requires research.
I wouldn't say it's simple, but long gone are the days of shouting "buy pork bellies and sell frozen orange juice" down a phone.
Only invest what you're prepared to lose, because you can lose it all very easily, although auto sell/buy can limit this.
Oh, and remember trading costs, so factor that into it too.
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Kind of ironic that in a thread talking about buying cars we are also talking about making money (I guess it offsets the loss that we all encounter when buying a vehicle), much the same way a bookie will cover their losses by hedging bets :rolleye:
.....So with every car you buy there should be an equivalent investment to cover the dealer and the finance company ripping you off.
Great theory.
back on the PCP deal though, if I pay £400 per month for 42 months, thats £16,800 and with £8k for my trade in thats £24,800....sounds ok when you think id be getting a nearly new gtd with 3k on the clock....then you factor in the fact that I'd still owe them £8700. I have gone full circle now lol....
I am thinking I will just keep the gti for now (again), I have 2 parking sensors to fit, may off my milly quads now and put on an oem zorst/ milly twin with an ed30 rear valance and just be greatful for what I have got.
This will no doubt change shortly :stupid:
...oh...that 135i I drove was sschhhweeet :evilgrin:
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back on the PCP deal though, if I pay £400 per month for 42 months, thats £16,800 and with £8k for my trade in thats £24,800....sounds ok when you think id be getting a nearly new gtd with 3k on the clock....then you factor in the fact that I'd still owe them £8700. I have gone full circle now lol....
What was the purchase price of the GTD?
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£21998, but it was a july 2009 with only 3k on the clock.
A new GTD DSG 5 door would come in at over £26k (not sure exactly). Anyway I am not going there for now.
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Sounds like you are best to avoid
http://www.topgear.com/uk/volkswagen/golf-6/road-test/gtd-3dr (http://www.topgear.com/uk/volkswagen/golf-6/road-test/gtd-3dr)
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£21998, but it was a july 2009 with only 3k on the clock.
A new GTD DSG 5 door would come in at over £26k (not sure exactly). Anyway I am not going there for now.
I'm not saying you're wrong but to me those figures don't stack up mate. Assuming you were going for a 42 month term then it would normally be 41 x the monthly (£400) which is £16400 plus your deposit which I'm guessing is your PX (£8000) so that's £24400 plus the 42nd payment which is the balloon (£8700) plus an option to purchase fee (usually £60) and an acceptance fee with the first payment (usually £125) making a total cost of £33285 for a £22k car. £11k interest???
I think they've over cooked it by the £8k deposit which means you paying back £3k which IMHO is a bit more like it.
As an example I have a quotation here for a PCP on a A4 based on 10k per annum over 48 months -
OTR Cash Price - £38710.00
Deposit £18980.00
1 x £350 (including £125 acceptance fee)
46 x £350
1 x £6765.96 (Including the £60 option to purchase fee)
Total cost including charges £42195.96
So the cost of financing £19730 which is not a million miles from the £22k you're considering is £3485.96. Quite a bit different to the £11k you've been quoted.
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I've was briefly looking at these to fund a Golf R. The monthly payments aren't too bad at a little over £500 a month, but the final lump sum is something like 13 grand. If I were blowing 500 squid a month on payments I'd never be able to save that sort of money to keep the car at the end as well. That means you hand it back or use it as a trade-in against another car, meaning another 3 years payments or no car!
Stupid idea, if you ask me. As stated above, they're just for people with champagne tastes and lemonade pockets who want a car they'd never normally be able to afford as a new purchase.
Golf R - £4000 deposit + 36 payments of £530 + £13000 final payment = £36K (or in all reality - a layout of £23000 and no car at the end of it!)
36 payments on a personal loan of £530 = a £16000 loan. Add that to your 4 grand deposit and suddenly you can only actually afford a £20K motor, but it will be yours to keep from the moment you've got the old debit card out of your pocket.
I am getting my new Octavia vRS on a PCP. Does that mean i have Champagne Taste but Lemonade Pockets :confused: :confused: Or am i just sensible because rather than lose the money in a car i keep it in a savings account or use it to make my house better (well the wife makes me do that :grin:) Thus keeping money readily available for any unforseen circumstance.
Something you need to bear in mind and i'm just using your example.
You don't want to pay out for a Golf R as you would need to use a PCP. Yet you say you can afford a £20k car because you have £4k cash and can get a £16k bank loan. What is to stop you refinancing the £13k remaining on the Golf R over say 30 months? That way after 5.5 years you have paid off the car and own it outright (So have something to show for your £39k). It's only the same as buying the £20k car with the bank loan. You don't own it until you have paid off that Bank loan. The bank owns it. So in reality you can afford a £4k car that you would own the minute you get your debit card out.
Or to put it simpler.
Own a £20k car after 3 years
Own a £40k car after 5.5 years
You can't take your money with you when you die and you get one life................. so live it & enjoy it.
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£21998, but it was a july 2009 with only 3k on the clock.
A new GTD DSG 5 door would come in at over £26k (not sure exactly). Anyway I am not going there for now.
I've just had a quick check on the Nationwide website and the sort of figures you quote seem to indicate straight HP.
Assuming it was £22k less your £8k you need to finance £14k.
NW have £14k over 42 months at £376.63 @ 7.2% APR which is likely much less than VW were initially quoting so it would probably creep up to the £400 you suggest. Cost to borrow on that is £1818.
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LOL, I'm glad you explained that - I looked at the deal earlier and though "Christ! he's either getting shafted or got it very wrong".
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Errr nope. £21500 to be accurate financed over 42 months on pcp at something like £404 per month with a final gfv figure around £8k. Did I explain it incorrectly earlier? I'm on my phone right now in pub watching the footy :drinking:
(cars at home honest oshifur)
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Tells you what though if I was doing it I'd go to nationwide rather than Arnold shark after seeing those figures :ashamed:
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LOL - I was right with the shafted then!!!! Bugger me!!!!!
Get some decent quotes, you'd be looking around 4-5% on the bit you borrow on average - sounds like they've given you QuickQuid.co.uk style scutter rates.
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Errr nope. £21500 to be accurate financed over 42 months on pcp at something like £404 per month with a final gfv figure around £8k. Did I explain it incorrectly earlier? I'm on my phone right now in pub watching the footy :drinking:
(cars at home honest oshifur)
Something still sounds a little off though tbh mate?
You mentioned the GTD was £21998 earlier so i'm assuming you got them down to £21500 you mentioned is to be financed?
If so then 42 x £404 = £16968 plus the GFV of £8000 = a total payable of £24968 so an interest charge of £3468...
So based on that the dealer is either very bad at maths or doesnt want a deposit? :confused:
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I've spent a lot of time looking at PCP's and what some third party finance houses call LP's. I don't profess to understand everything about them and hence my earlier question regarding the size of deposit but as I also said earlier I always base my calculations on what it will cost me over the term and use that as a benchmark for comparison.
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Something still sounds a little off though tbh mate?
You mentioned the GTD was £21998 earlier so i'm assuming you got them down to £21500 you mentioned is to be financed?
If so then 42 x £404 = £16968 plus the GFV of £8000 = a total payable of £24968 so an interest charge of £3468...
So based on that the dealer is either very bad at maths or doesnt want a deposit? :confused:
That's the conclusion I came to, the deposit seems to be about the amount that is questionable. I would also think they've be working on quite high APR's so probably anything from 10 to 14 depending on how desperate they want your business.
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Heres a quick quotation based on the nearest similar value / type car i could find..
£0 deposit, 42 month term @ £414 with GFV of £8300 and APR of 9.9%
http://www.broker4cars.co.uk/PCP-Payment-Calculator/Car.jsp?selectedBudgetPeriod=42&selectedBudgetMileage=10000&selectedPeriod=42&selectedMileage=10000&selectedDepositPercent=0&minMonthly=300.0&maxMonthly=400.0&selectedManufacturer=VOLKSWAGEN&selectedModel=GOLF+DIESEL+HATCHBACK&selectedVariant=2.0+TDi+140+GT+5dr+DSG
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right I think this was the deal, yes they reduced the car to 21500 (slow day lol) , wanted £300 deposit. 42 months at £404 plus an option to buy the car at the end of the period for £8700. Ignore anything I said about a trade in of £8000.
Total costs £25,968. (assuming buy the car in month 42) No doubt there is a set up figure somewhere but ignore that.
=£4,468
I can't see the final balloon figures on nationwidevehiclecontracts to compare from here.
Guess my instincts were right all along that's why I'm sticking with my gti for now.
Ps remember this was for a 2009 GTD dsg 5 door with 3000 miles on the clock. 1 owner.
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I think it is probably a lot of cash for a 2 year old car, regardless of the mileage but I think the aim of the replies was to try and allay some fears and misconceptions about PCP's.
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I think it is probably a lot of cash for a 2 year old car, regardless of the mileage but I think the aim of the replies was to try and allay some fears and misconceptions about PCP's.
+1 :happy2:
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:happy2:
Great guys that's really helped. Thanks to all who contributed. From this thread I realised that pcps are an option and I can get a new car for what this stealer was trying to punt my way.
Hope in some way it helps others understand the benefits and the pitfalls. :congrats:
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Given there is next to no deposit that doesn't sound too bad then? Maybe not the most competitive but OK :confused:
LP as far as I can see is just like PCP except that at the end you don't have the option to hand the keys back at the end and walk away. You have to pay the final baloon one way or another. So its missing that 'safety net'.
I've also noticed that online brokers tend to pitch the final baloon quite high, making the monthly payments lower but I guess leaves less 'equity' at the end. Dealer PCP's seem to make the final baloon a bit lower so the monthly's are a bit higher but there is more chance of having more cash into the next car come trade in time this way. Have i sussed this out right?
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It might not be your thing but I had a quick look and a couple of brand new A3's (Sport/S-Line/Black Edition) with the 170 TDi and S-Tronic could be had for similar money to the GT you mentioned.
http://www.audi.co.uk/new-cars/a3/a3/finance-and-offers.html
A finance example here - http://www.audi.co.uk/new-cars/a3/a3/finance-and-offers/retail-finance-offers.html
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LP as far as I can see is just like PCP except that at the end you don't have the option to hand the keys back at the end and walk away. You have to pay the final baloon one way or another. So its missing that 'safety net'.
I've also noticed that online brokers tend to pitch the final baloon quite high, making the monthly payments lower but I guess leaves less 'equity' at the end. Dealer PCP's seem to make the final baloon a bit lower so the monthly's are a bit higher but there is more chance of having more cash into the next car come trade in time this way. Have i sussed this out right?
That's the impression I get. I spoke to several brokers about LP's but didn't get a warm feeling about them. They were all trying to tell me that manufacturer PCP's are bad but when challenged couldn't give a real world example.
My deal on the new car will give me a £3k deposit contribution plus a favourable interest rate which has the net effect of paying the interest aspect of the deal for me.
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I am getting my new Octavia vRS on a PCP. Does that mean i have Champagne Taste but Lemonade Pockets :confused: :confused: Or am i just sensible because rather than lose the money in a car i keep it in a savings account or use it to make my house better (well the wife makes me do that :grin:) Thus keeping money readily available for any unforseen circumstance.
i think a perfectly sensible approach in the current climate, you may pay a small premium but 'rainy day' funds are handy and accessible
i've bought the 'sh#tty for the city 500' on a pcp as the deal worked out cheaper than going pre reg, in reality fiat gave me £750 off (as good as you get at broadspeed) and an APR rate of 1.3% (which is cheap subsidised money)