PCP deal calculation help

PCP deal calculation help

Author
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crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
Please be patient with me as this is my first foray into PCP however I think the figures doesn't really stack up.

Below are the details of the quote I have received:

Car retail value : £35,999
P/X value : £13,000 (to be used as deposit)

PCP 49 months £227.33 per month with an optional final future value of £13798.75p

To me with such a large deposit the monthly payments should be lower?

Also assuming at the end of the 49 month term I return the car I will have to then raise capital for deposit for the next car. Let's say I have £4,000 as deposit does that mean my future PCP monthly payments would be circa £500/month for a car that retails around £36,000?

edit: I have not offered to give any further so I guess the PCP deposit = 0% and £13k is purely to take the retail value down to £22,999?

Not sure about APR but it's Audi Finance to 7-7.1%?


Edited by crazy about cars on Saturday 13th December 14:51


Edited by crazy about cars on Saturday 13th December 14:54

PurpleMoonlight

22,362 posts

156 months

Saturday 13th December 2014
quotequote all
APR?

Roo

11,503 posts

206 months

Saturday 13th December 2014
quotequote all
Figures look about right.

The last thing I'd be doing though is chucking a 30% deposit into a PCP.

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
Roo said:
Figures look about right.

The last thing I'd be doing though is chucking a 30% deposit into a PCP.
I am going for a p/x hence why the full p/x valuation into the PCP deal. Ideally I would like a "refund" from 13k so say put down £5k and dealer refund £8k but that will double my PCP monthly payments which would be the same as going on HP...

To my layman eyes paying £200-ish a month for a brand new S3 does seem tempting but I am sure if that's a wise move financially.

daemon

35,724 posts

196 months

Saturday 13th December 2014
quotequote all
crazy about cars said:
I am going for a p/x hence why the full p/x valuation into the PCP deal. Ideally I would like a "refund" from 13k so say put down £5k and dealer refund £8k but that will double my PCP monthly payments which would be the same as going on HP...

To my layman eyes paying £200-ish a month for a brand new S3 does seem tempting but I am sure if that's a wise move financially.
I dont think thats a good deal at all.

You're putting a lot of equity into the deal, but after 4 years you've still to find around £14,000 to buy the car outright.

If you really want to own this car, then as you say approx £420 ish a month will get you a 5 year loan.

If you dont, then you'd be as well looking at leasing. There were Golf R deals going around at approx £250 a month with £1500 down.


Edited by daemon on Saturday 13th December 15:06

Spooge

150 posts

111 months

Saturday 13th December 2014
quotequote all
You should also consider the discounted price if you havent already. Take a look at drivethedeal or carwow.

DTD can provide you with a pcp quote which might be useful for comparison. Depending on options 8-12% off list is possible.

AGK

1,601 posts

154 months

Saturday 13th December 2014
quotequote all
What's the car details?

3 door/5 door? Manual / Stronic?


crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
3 door manual S3 but with lots of toys.

He came back to me with figure of £348/month but never confirmed GFV. He was saying it's hard to beat this number but I have a website open with a simple PCP calculator so I've asked some questions and in the end he admitted that figure is not really competitive smile

He did say if I go for a brand new car with almost the same spec I'm looking at for £250/month. I asked about dealer contributions on new cars but he said there's none for now but potentially could be. However I sense he wants me to commit now but if it's a new car I'll definitely need more time to think. I wanted a used car which I can have before Christmas.

In the end he said he will try to source a pre-reg car for me and get back to me.

Stupid question but is GFV what the car is estimated to be worth at end of term and also how much I need to pay to own the car?

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
daemon said:
I dont think thats a good deal at all.

You're putting a lot of equity into the deal, but after 4 years you've still to find around £14,000 to buy the car outright.

If you really want to own this car, then as you say approx £420 ish a month will get you a 5 year loan.

If you dont, then you'd be as well looking at leasing. There were Golf R deals going around at approx £250 a month with £1500 down.


Edited by daemon on Saturday 13th December 15:06
Thanks - that's what the missus thinks too regarding the big equity.

Apologies for being numpty but I thought PCP and leasing is the same? £1,500 deposit and £250/month is tempting! I can sell my current car instead of P/X and pocket the cash for next deposit.

timbo999

1,287 posts

254 months

Saturday 13th December 2014
quotequote all
Under £2k interest to borrow £23k for 4 years??? Bite their hand off, that's cheaper than a Tesco loan for the same amount/period (and I can guarantee its nothing like 7%!!)...

AGK

1,601 posts

154 months

Saturday 13th December 2014
quotequote all
If it's not new then the APR will be around 12%.

Always best to buy new with Audi.

Also factor in 10% discount which is easily achievable.

FWIW I got a quote the other day on a brand new Sportback S-tronic and with discount and adding 13k for deposit the payments would be around the £140 a month mark.

CoolHands

18,496 posts

194 months

Saturday 13th December 2014
quotequote all
crazy about cars said:
I wanted a used car which I can have before Christmas.
Sounds like you're rushing into it. Is that wise?

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
As you can tell from my responses I am not really clued up enough about PCPs :P

So, if I have a car I am looking to part exchange (or sell) for another car with the criteria below what will be my best option?

  • Let's say my current car is worth £13,000.
  • I like to change my cars often so say every 3 years I would want a new car.
  • I don't do big miles (if I do I have alternative means of transport provided) and only do around 8-10k miles a year.
  • I won't be modding my car.
  • I would prefer maintenance to be covered for the 3 years but not a deal breaker.
  • I would prefer to have the car as soon as possible so not wait few months for a new build but again if it's a massive saving it's not a deal breaker.

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
CoolHands said:
crazy about cars said:
I wanted a used car which I can have before Christmas.
Sounds like you're rushing into it. Is that wise?
I've been looking for few weeks now but you are right - it would be nice to have an Christmas present but then again it might be worth waiting.
I'm not sure how true is this but someone mentioned December is a good month to negotiate on used car as most dealerships are desperate to sell stock.

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
AGK said:
If it's not new then the APR will be around 12%.

Always best to buy new with Audi.

Also factor in 10% discount which is easily achievable.

FWIW I got a quote the other day on a brand new Sportback S-tronic and with discount and adding 13k for deposit the payments would be around the £140 a month mark.
Did you get the quote on Audi website? With that figure I guess it's PCP? What's the GFV is you don't mind me asking.

Diderot

7,263 posts

191 months

Saturday 13th December 2014
quotequote all
Definitely don't put that sort of equity into a PCP. Get the money out of your car, and put a much smaller deposit in (say 4k) and investigate getting a brand new one (there could well be cars that match your spec unregistered somewhere in the dealer network).

CoolHands

18,496 posts

194 months

Saturday 13th December 2014
quotequote all
I don't think the december thing is true. I reckon the best deal you get will be the one where you take your time to weigh up all options and quotes etc, regardless of the time of year.

I can't talk - I've bought plenty of things when I really, really want them! But usually later wish I'd been a bit more patient! Trying to get wiser as I get older, hence why I'm pointing out you may wish to do the same! But it can be difficult. The thing with PCP though is (I believe) quite difficult to compare easily, hence why the motor trade love it. Eg look at how he told you initially it was a pretty good deal, and in fact it wasn't, it mysteriously got better.

Sheepshanks

32,530 posts

118 months

Saturday 13th December 2014
quotequote all
crazy about cars said:
Stupid question but is GFV what the car is estimated to be worth at end of term and also how much I need to pay to own the car?
It a guarantee of the car's value at the end of the term (important to note that it's only valid at the end - it's fairly unlikely but it could happen that if you want to terminate early the car will be worth less).

At the end of term you can pay the GFV and keep the car.

PCP used to be set such that the car was worth more than the GFV and you could use the difference to fund the deposit on your next car. However that tends not to happen much now, so if you don't pay the GFV to keep the car your only other option is likely to be to hand it back and walk away.

The thing that many people find hard to come to terms with is the £13K in your current car will be gone. But then you'll have had 4yrs of fairly low payments against a £36K car.


More general point: PCP's are designed for shifting new cars - they don't usually work very well on used cars.

Big difference with leasing is you're pretty stuck with a leased car for the term - you usually have to pretty well pay all of the lease cost if you need to terminate. And there's generally no option to purchase a leased car.

Edited by Sheepshanks on Saturday 13th December 15:52

Sheepshanks

32,530 posts

118 months

Saturday 13th December 2014
quotequote all
timbo999 said:
Under £2k interest to borrow £23k for 4 years??? Bite their hand off, that's cheaper than a Tesco loan for the same amount/period (and I can guarantee its nothing like 7%!!)...
It looks like around 2.25% APR - which makes me think there's something missing / incorrect in the OP's information!

crazy about cars

Original Poster:

4,454 posts

168 months

Saturday 13th December 2014
quotequote all
Right, got a call with the following offer on a brand new car. Same spec too.

OTR Price : £35,875
GFV : £15,310
PCP term : 48 months
PCP monthly : £270/month
He never mentioned px value but I guess it's still £13,000

Cost of PCP over 48 months = £12,960
Total cost of car = £12,960 + £15,310 + £13,000 (deposit) = £41,270

Now let's say I borrow on car loan:
Amount to borrow = £35,875 - £13,000 = £22,865
Estimate based on 6% APR over 48 months for £22,900 = £536.24/month.
Total repayment = £25,739.52
Total cost of credit = £2,839.52
Total cost of car = £25,739.52 + £13,000 (deposit) = £38,739.52

So it will be around £2,500 cheaper if I borrow on loan compared to HP plus the car will always be in my name?

Scenario with PCP is that I would need to save up at least 4-5k deposit and am looking to pay £400+/month for a car worth £35k in 48 months' time.
Hmmm... tempted as it's a spanking new car with delivery miles but not sure if this is a good PCP deal?

Put the figures here and something is not right... unless interest is 30%?

http://www.pcp-calculator.com/PCP-loan-calculator....

Edited by crazy about cars on Saturday 13th December 16:31