Negative equity - is this normal?

[CarlosFandango11]

Welshbeef said:

Deep Thought said:

Welshbeef said:

He be losing the VAT as soon as driving off the forecourt.

Vat has nothing to do with it.

You drive it off the forecourt and end of the day drive it back to the garage and sell it back to them or sell if private on that same day everyone will knock the 20% vat off

VAT has nothing to do with it.

[Sheepshanks]

CarlosFandango11 said:

Welshbeef said:

Deep Thought said:

Welshbeef said:

He be losing the VAT as soon as driving off the forecourt.

Vat has nothing to do with it.

You drive it off the forecourt and end of the day drive it back to the garage and sell it back to them or sell if private on that same day everyone will knock the 20% vat off

VAT has nothing to do with it.

It's one of those "turn of phrase" things that seems to have become common as a way of justifying the alleged immediate drop in price between a new and used car, often used when people are asking a dealer to buy a car back.

It's nonsense, of course, and particularly odd that Welshbeef, being a Finance Director, would repeat it.

[RoVoFob]

AudiMan9000 said:

I don’t see what quoting my past posts actually establishes? They are literally months apart, spanning the best part of a year. Yes, you could say I’m unwise with money. Arguably anyone who finances a depreciating asset is. There was a time when my job was in doubt, but the economic uncertainty is reflected in the 3 months free promotion. All of those posts resulted in interesting and helpful threads containing advice and debate that added to my and collective wisdom. Would I have done things differently? Yeah, I’d have probably ran my old PCP to August, and switched to a new PCP later this year, probably saving some money. But ultimately I’d be in the same situation and still making similar posts. I’m sorry it seems to annoy some people, so I may not bother any more.

Maybe I’m misunderstanding you, but what you’re saying doesn’t make sense to me...

How does a three-month ‘free’ promotion, which simply increases the amount of interest you have to pay (since you’re delaying starting repayments) and increases the subsequent monthly payments (since the same cost, plus more interest is spread across fewer monthly payments), compensate for the increased likelihood of losing your job?

Had you lost your job, you would still be tied into the same debt, face higher monthly payments and would have the same negative equity issue had you needed to end the contract early. I don’t see how any of that is helpful when your job is in doubt.

Looking to understand the finance options is great, but it seems like you’re believing sales peoples’ spin rather than engaging with the finance options. An expensive new car may be more accessible on PCP than in cash or on Hire Purchase, but that doesn’t make it good value.

[AudiMan9000]

RoVoFob said:

AudiMan9000 said:

I don’t see what quoting my past posts actually establishes? They are literally months apart, spanning the best part of a year. Yes, you could say I’m unwise with money. Arguably anyone who finances a depreciating asset is. There was a time when my job was in doubt, but the economic uncertainty is reflected in the 3 months free promotion. All of those posts resulted in interesting and helpful threads containing advice and debate that added to my and collective wisdom. Would I have done things differently? Yeah, I’d have probably ran my old PCP to August, and switched to a new PCP later this year, probably saving some money. But ultimately I’d be in the same situation and still making similar posts. I’m sorry it seems to annoy some people, so I may not bother any more.

Maybe I’m misunderstanding you, but what you’re saying doesn’t make sense to me...

How does a three-month ‘free’ promotion, which simply increases the amount of interest you have to pay (since you’re delaying starting repayments) and increases the subsequent monthly payments (since the same cost, plus more interest is spread across fewer monthly payments), compensate for the increased likelihood of losing your job?

Had you lost your job, you would still be tied into the same debt, face higher monthly payments and would have the same negative equity issue had you needed to end the contract early. I don’t see how any of that is helpful when your job is in doubt.

Looking to understand the finance options is great, but it seems like you’re believing sales peoples’ spin rather than engaging with the finance options. An expensive new car may be more accessible on PCP than in cash or on Hire Purchase, but that doesn’t make it good value.

The promotion doesn’t remove the risk; it incentivises taking the risk. The first three months free is achieved by a reduction in the list price although yes it does result in some additional interest because you’re not paying the capital down.

[PH_77]

AudiMan9000 said:

The promotion doesn’t remove the risk; it incentivises taking the risk. The first three months free is achieved by a reduction in the list price although yes it does result in some additional interest because you’re not paying the capital down.

Just out of interest, I hope you don't mind me asking, what's the drivetrain on your Audi? 2WD 2.0L diesel? Or is it a Quattro?

[Wills2]

Welshbeef said:

Deep Thought said:

Welshbeef said:

He be losing the VAT as soon as driving off the forecourt.

Vat has nothing to do with it.

You drive it off the forecourt and end of the day drive it back to the garage and sell it back to them or sell if private on that same day everyone will knock the 20% vat off

Just utter bilge once again welshly why do you persist?

[Terminator X]

AudiMan9000 said:

I’m 7 months into a 48 month PCP on a 2020 Audi Q3.

It has about 7.5k miles on the clock.

I paid nil deposit, negligible equity from last deal as trade in, and there was nothing to pay in the first 3 months. Monthlies are £477,

Settlement figure - £31.5k
WBAC valuation - £24k

So I’m £7.5k in negative equity. Is this normal or something to do with Covid or something else?

Not read a single reply yet, surely the PCP "haters" will chew you a new ahole! Don't let me down boys!

TX.

[WonkeyDonkey]

Terminator X said:

Not read a single reply yet, surely the PCP "haters" will chew you a new ahole! Don't let me down boys!

TX.

6 pages in? Aren't you a bit late to the party?

[AudiMan9000]

PH_77 said:

AudiMan9000 said:

The promotion doesn’t remove the risk; it incentivises taking the risk. The first three months free is achieved by a reduction in the list price although yes it does result in some additional interest because you’re not paying the capital down.

Just out of interest, I hope you don't mind me asking, what's the drivetrain on your Audi? 2WD 2.0L diesel? Or is it a Quattro?

Sure. I’ve got the front wheel drive 1.5 litre petrol 150bhp with automatic gearbox.

[Wagonwheel555]

AudiMan9000 said:

Sure. I’ve got the front wheel drive 1.5 litre petrol 150bhp with automatic gearbox.

Hang on, you're paying £477pm for a 1.5 litre 150bhp Q3?

Wow

[Hugo Stiglitz]

Bad credit?

[bennno]

Jellybeans2016 said:

His last thread was, he wasn’t using the Q3 and whether to swap it for a new Q7

Just wait till he sees the negative equity on one of those after 6 months with nill deposit and a 3month payment holiday!

OP - Huge relevance is how much discount you got on the A3 when you bought it?

[nickfrog]

Welshbeef said:

Deep Thought said:

Welshbeef said:

He be losing the VAT as soon as driving off the forecourt.

Vat has nothing to do with it.

You drive it off the forecourt and end of the day drive it back to the garage and sell it back to them or sell if private on that same day everyone will knock the 20% vat off

I can't believe you still come up with this, particularly for a Finance Director. It has absolutely nothing to do with the VAT but with inherent depreciation and dealer spread.

[AudiMan9000]

Wagonwheel555 said:

AudiMan9000 said:

Sure. I’ve got the front wheel drive 1.5 litre petrol 150bhp with automatic gearbox.

Hang on, you're paying £477pm for a 1.5 litre 150bhp Q3?

Wow

I would have loved to get a bigger engine and Quattro, but that would have made the cost astronomical (if it isn’t already).

[maz8062]

AudiMan9000 said:

Wagonwheel555 said:

AudiMan9000 said:

Sure. I’ve got the front wheel drive 1.5 litre petrol 150bhp with automatic gearbox.

Hang on, you're paying £477pm for a 1.5 litre 150bhp Q3?

Wow

I would have loved to get a bigger engine and Quattro, but that would have made the cost astronomical (if it isn’t already).

That is the same engine that is in the Skoda Karoq, Seat Ateca and VW Tiguan. Leasing the Skoda or VW on a 3 x 48, 10k miles, would work out at £280 per month for the DSG, or £200 less than the Q3 for the same car practically, even though the term is longer.

The PCP vs Lease debate always puzzles me given the different costs involved.

[AudiMan9000]

I’ve just been on Ford’s website and got a PCP quote for the cheapest poverty spec Kuga. Nil deposit, 15k miles pa = £493.51 per month x 36.

[Monkeylegend]

AudiMan9000 said:

I’ve just been on Ford’s website and got a PCP quote for the cheapest poverty spec Kuga. Nil deposit, 15k miles pa = £493.51 per month x 36.

You either found that to justify your deal to yourself or you are just not very good at finding better deals

[bennno]

AudiMan9000 said:

I’ve just been on Ford’s website and got a PCP quote for the cheapest poverty spec Kuga. Nil deposit, 15k miles pa = £493.51 per month x 36.

Why pick a badly depreciating car with zero discount and use that example.

Did you pay full list price for the a3? If so then with no deposit, a 3 month payment holiday and just 3-4 payments made I’m surprised that you are surprised you have negative equity.

[AudiMan9000]

Monkeylegend said:

AudiMan9000 said:

I’ve just been on Ford’s website and got a PCP quote for the cheapest poverty spec Kuga. Nil deposit, 15k miles pa = £493.51 per month x 36.

You either found that to justify your deal to yourself or you are just not very good at finding better deals

Well I accept that you’d probably haggle that down somewhat in the dealership, but it does show that ballpark what I’m paying is pretty standard. The only way to substantially reduce it would be to put down a substantial deposit. But even then you’re just shifting the point at which you part with the cash and saving a negligible amount of interest.

I would like to know anyone who has managed to get a Q3 for £200 a month with nil deposit and estimated 15k miles. I suspect no-one has.

[GR_WILL]

nickfrog said:

Welshbeef said:

Deep Thought said:

Welshbeef said:

He be losing the VAT as soon as driving off the forecourt.

Vat has nothing to do with it.

You drive it off the forecourt and end of the day drive it back to the garage and sell it back to them or sell if private on that same day everyone will knock the 20% vat off

I can't believe you still come up with this, particularly for a Finance Director. It has absolutely nothing to do with the VAT but with inherent depreciation and dealer spread.

I’ve seen this on a website, are they incorrect?