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>>Whats car depreciation calculator' has the Audi a3 sportback 150 se 5dr at £8576 after 4 years but the dealer told me the final payment after 49 months would be £11803. Maybe im looking at this wrong but would appreciate any help.
So Audi are saying they will guarantee the car to be worth over £3000 MORE than what car suggests this will be worth?
It is the finance company, not the dealership, that sets the GMFV. In this case they appear to be over allowing the GMFV to get a lower monthly repayment. I suspect the upshot of this will be locking you into their network come replacement - you are certainly unlikely to be able to change the car early since the car will be worth less than what you owe throughout the term of the contract, and your options will be to handback at the end or take the GMFV at the end and have no equity as deposit on a new car.
How much deposit is this assuming you put in at the beginning? By my reading this is going to be written off from the start.
With regard to not giving you a printout - I assume what they are showing you is a version of a 'four square' presenter rather than the full quote. This probably does not show APR etc. and therefore should not be given as an offical quote since this contrivenes financial rules. You should, however, be able to request the official print out from their finance system.
Hope that helps..
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Hi guys, Thanks for the replies and sorry for the essay below:
Milage is 7,000 a year because I don't do too many and the deposit was £2000.
Both volkswagen and Audi have said that I am going to need to put roughly the same deposit down when I come to the end of my term.
The reason I originally asked this was you can get cars from web site like 'drive the deal' and 'orange wheels' which knock of a substantial amount from the dealer price and when I worket this out with the new price with the GMFV I got in the showroom it made the monthly payment substantially less.
Show room
Car price- £25,991.00
My deposit-£2000
Final rental- £11,803.75
Months- 49
Mileage- 7,000
Monthly amount £359.63
Orange wheels
Car price - £21,750
My deposit- £2000
Final rental- 11,803.75
Months-49
Milage- 7000
Apr- 7.4
Monthly amount £ 261.19
This is quite a big saving to me and I would feel far more comfortable purchacsing it.
I wasn't sure when ordering through Orange wheels whether the dealer would give me the same MGFV because the price of the car originally was cheaper.
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Ok, so the orange wheels deal is clearly better (?would dealer match the price though if pushed).
You are still commiting to keeping the car for the full term unless you are happy to buy your way out of the finance before the end. You almost certainly WILL be in negative equity throughout the term.
As long as you are happy with that, and feel secure in your finances etc. for the next 4 years then fine. Personally I would be far happier with a lower final rental amount and a higher monthly to at least keep the option of changing mid term possible. After all the main attraction of a PCP is flexibility....
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You have a very valid point about flexibility to be honest and I've still not fully commited to the idea, I'm just exploring my options.
I didn't realise it was the finance company that set the final value so I was concerned that the final value would be more or less with another dealer.
My other concern is that manafacture warrenty is 3 years and the term is for 4 years, nothing should break in that final year, but stranger things have happened. Volkswagen offered me a simular deal for 3 years on a golf, that might swade me.
Thanks for your help.
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Personally I would be far happier with a lower final rental amount and a higher monthly to at least keep the option of changing mid term possible. After all the main attraction of a PCP is flexibility....
Yes...and no.
A GMFV is an insurance policy in itself, as it caps the depreciation risk. Though is does add to the cost, as the average debt is higher.
I don't think PCP is flexible unless you have cash in reserve anyway - one of the reasons so many cars are PCPed now is presumably that a lot of people find themselves more or less obliged to roll into another one as they can't fund the balloon payment.
Don't really like PCP myself though - if I have the cash, I'd rather pay for it - I then really do have flexibility.
OP - DTD etc source from dealers anyway - who can build any discount into a PCP deal if they want. speak to the broker. The reason there's no discount on your showroom PCP deal, cynically, is that it's easier not to offer a discount when you are selling a monthly payment - if the customer wants a lower payment you can flex the term, the deposit, the mileage, rather than give your profit away. That's why I would always say do the deal first before you discuss how you want to pay (they don't like that, but you're the customer so tough nuts to them).
I've just looked at your deals, and I get the APR for the second one to just under 7.3% - assuming 48 regular payments and then just the GMFV at month 49. Is there a "documentation fee" payable up front? That would make it 7.4%, if it was in the £50-£80 region. The APR on the showroom deal I make about 7.1% excluding any doc fees.
Total cost to you if you hand it back at 49m, with no mileage/rectification charges, would be £19262 (showroom) or £14537, so I think I would be trying to find a way to save that £4700 difference for myself.
Deal 1 cost is 67.4p a mile exc servicing, fuel, insurance. Deal 2 is 50.9p/mile.
Worthwhile difference.
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I ordered a Volkswagen Polo through orangewheels, and took delivery in March. Part of the reason for going via a broker, was my local dealers could not come near on price and were offering straight deals with a standard deposit contribution.
In respect of local dealers, I found them willing to provide a finance quotation but they did "massage" the figures. At the end of the day I was clear in that it was price to change I was interested in. Going via broker I saved an addition £1.5k- £2k over my local dealers and dealt with the dealer direct from point of referral from orangewheels.
The orangewheels dealer would not provide a quote in writing until the order had been placed (this is to prevent you trying to get a local dealer to match). However it all checked out and they actually ran the finance application before they took my deposit, so I had some certainty the finance deal was approved and was as originally stated before I paid my deposit.
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A lesson I learned long ago was 4 years is a long time to be paying to rent a car. As you only do 7,000 a year its not as though you will be spending a long time in it.
£300ish a month for two years plus £2,000 deposit could see you in a decent 1-2year old car. After two years its yours, will probably be worth £5-6000 and you can do what you want with it.
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I know of a business man that is hooked, big style, with Personal Lease cars.
Expensive cars, he gets fed up with 12-15 months, or somebody bashes it etc etc. - the car is then swapped
Currently paying some £850 per month financing the current car and servicing the debt interest he has rolled over in changing cars early for the 7/8 years............he owes some £18,000 on roll over charges alone.
Why he doesn't settle for a 18 mth old Mondeo and pay by HP I do not know - A6/X5/A4 Estates - his mother keeps saying that he has a new car - she'd be dumfounded if she knew debt he was in and that the debt stood no chance of coming down anytime soon
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Some businessman!
Debt is wealth is 2014 USSK.
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Some businessman!
Debt is wealth is 2014 USSK.
Not sure what that means, but I suppose when inflation kicks in the people up to their ears in debt will see it disappearing, and we prudent savers will see our retirement provision evaporating too.
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but I suppose when inflation kicks in the people up to their ears in debt will see it disappearing
They won't be sitting quite so pretty when mortgage rates increase dramatically and they can't afford the roof over their heads, the one they should have been paying off in huge chunks whilst interest rates were at an all time low.
People actually believe the hype that the recession is all over, and we are the envy of all western nations...a perusal of the continually increasing national debt to fast approaching unmanageable levels ought to be a reality check.
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..a perusal of the continually increasing national debt to fast approaching unmanageable levels ought to be a reality check.
You know I agree with you on that GB!
Carney has said that the new normal for interest rates will be 2.5%. I don't pretend to understand his reasoning for that, but it seems unlikely that UK can get its government debt down in real terms unless interest rates stay below inflation for a good while.
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You are so right GB. Went to Sainsburys yesterday and the car park looked like a large German new car showroom, full of Audis, Mercs, BMWs, the usual stuff, all shining in the sun with their 14 reg plates. Such a contrast from the typical French hypermarket full of a mixture of new and old tatty stuff, still fit for purpose of course but the difference is marked. Seeing as more than 70% of UK cars are financed, then logically 70% of folk buying new cars cannot really afford them -or they would not take on the debt to fund them. And like you say, interest rates will rise --- and then we'll have the collective moaning that mortgage repayments are not affordable! We are simply heading for another bust, just like before, nothing has really been fixed!
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I'm not sure if there is a documentation fee but I used www.pcpcal.co.uk/ and type in all the figures I mentioned and it came out with that monthly figure.
To be honest, I'm a little confused on what to do at the moment, I'm starting to wonder if paying such money out for a car is worth it and what else I could do with said money.
At the moment I have a Kia proceed 1.6 on a 59 plate and I own it out right, its probably worth around £4500 but the longer I keep it the more moneyit loses so I was looking at pcp so I don't have to worry about depreciation as you have a set value its worth at the end of it.
Cars are such bad purchases, kinda like throwing my money away but I can't live with out one!
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Well your Kia isn't going to lose as much as a new car, is it? Consider running it for a year or too and putting £300 a month in the bank or weighing it off the mortgage before the rates go up. Of course I don't know your circs, or requirements so just an option.
And presumably you would use the value of the Kia anyway towards a new deal if you did go PCP/loan to reduce the borrowing, and interest.
Don't forget you pay interest on the GMFV for the full term too. People get it into their heads that they only borrow the depreciation on PCP, but it adds a nice whack to the interest, too. Over £3000 in your showroom example, the I the £2000 or so being the interest on the reducing part.
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At the moment I have a Kia proceed 1.6 on a 59 plate and I own it out right, its probably worth around £4500 but the longer I keep it the more moneyit loses so I was looking at pcp so I don't have to worry about depreciation as you have a set value its worth at the end of it.......................
Actually, the longer you keep it the better value you will get from it, as it will lose less percentage wise each year as it ages. PCP on the other hand will lock you into a 3 year cycle if you're not careful of paying maximum depreciation plus interest as Manatee says. To understand the real cost of PCP you have to look over the full term of the deal. Yes, it's a way of driving something you may not have cash for, but it's mighty expensive transport!
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Oh yes, run the Kia into the ground but look after it well to make it last as long as poss, when it dies eventually find a well looked after car for money you have sitting doing nothing in your account.
We've gone completely the other way now, we were never into new cars anyway, but as well as paying no interest we're doing our best to be depreciation free too, most satisfying, as is fettling the old cars to last as long as possible.
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Yea I've been thinking past few days that I'd like a car that I really like and 'connect' with so that it keeps me happy for as long as I own it and then i'll be more likely to keep it for a very long time. I just can't find that car though.
I see some people driving around in old cars that they've owned for 15 years and they've properly looked after them and they enjoy the car as much as they did when they first got it. I want to be that person lol.
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There are more people doing that but they only realise as they get older. I have had car for over four years. The longest by at least one year I have ever had a car. I have no desire or need to change it. Although I suspect that family circumstances will demand a change in due course. If the Kia is running well and it suits your purpose, keep it. Why waste money?
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Spam - do not click on link
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