PCP/ Lease Question

[tony wright]

Young Nephew has just ordered a new VW Sirocco R from a ship in the middle of nowhere (Fleet Auxillary). He sent me the details on costs which I thought were high but have no idea on either of the above finance systems.

I would like to ask opinions on his deal or better still be directed towards a better one for him if this seems high:

Car cost approx 33k
4.5k deposit
£400 a month for 3.5 years
Cost to purchase after the 3.5 years 18k or give it back.

Wouldn't be so bad, but he will only drive it 6 months of the year and should imagine his insurance won't be cheap as he's only 25.

[xRIEx]

Judging by the deals posted in the lease bargains thread, that's fking horrendous. If he's still in the cooling off period I'd be telling him to cancel.

[Snollygoster]

That's horrific.

So you said a £33k car

He's paying:
£4,500
£400 x 42 = £16,800
GFV £ 18,000

Total payable £39,300.

£6,000 worth of interest!

A Golf R would be cheaper to lease, and more powerful, better equipped, cheaper to insure than the Rocco,,

[tony wright]

Thanks, I looked in that thread but as I know so little about it, it was hard to judge the differences with his deal.

[Snollygoster]

tony wright said:

Thanks, I looked in that thread but as I know so little about it, it was hard to judge the differences with his deal.

I find the easiest way is to compare how much it will cost as a total monthly cost including deposits, and actual monthly payments

On that, he's spending £21,300 in 42 months so £507 a month.

Just looking at a lease on a Golf R. There's one I've found in two ticks. It would cost £8,235 over 2 years (might be able to fin it cheaper), so £343 a month.

[Snollygoster]

swerni said:

£6000 over 3 1/2 years, is that a lot ?

So a 33 car.

33 - 4.5, so a balance to finance of £28,500.

On that I guess not, but you have to pay to finance that £18,000 GFV.

Considering he's spending £21,300 over 42 months, and £6,000 of that is interest. I would have said it's a lot yes.

[anonymous-user]

Absolutely. PCP is designed to leave you with some equity in the car at the end of the term and a lease obviously isn't. You've got to take that into account when doing the sums.

Of course there's no guarantee there will be any equity if the used car market tanks, but that's the chance you take.

[-Z-]

That deal is designed to give no equity at the end.

£18k after 3.5yrs is 54% residual, are Sciroccos that good?

He is paying over £500/month, my M5 only costs £150 more, which shows you how poor value the deal is, given the M5 list price is over double that of the 'Rocco!

[Snollygoster]

-Z- said:

That deal is designed to give no equity at the end.

£18k after 3.5yrs is 54% residual, are Sciroccos that good?

He is paying over £500/month, my M5 only costs £150 more, which shows you how poor value the deal is, given the M5 list price is over double that of the 'Rocco!

Agreed. £18k is extremely ambitious with this RV.

Even VW don't value it that high. On their PCP calculator (https://www.volkswagen.co.uk/financeCalculator/chooseModel), a Scirocco R DSG, even at only 5k miles year over 42 months, they give the optional final payment, £16,605.00 which is designed for only about £500 equity if that.