VW Golf R - PCP deal

[jxbes]

Morning,
I was just seeking some advice on a PCP deal that I've haggled on a 66 plate Golf-R - should I take it or leave it?

Golf-R list price: 23,250
Yearly mileage: 10K
Contract agreement: 49 months
Partex my Mk5 Golf GTI: 2250 (note that it needs approx a grands work of work doing on it easily and is bksed)
Cash Deposit: 4200

With the above my monthly would be £280, and would get a major and minor service, and roadside assistance for a year.

I would probably upgrade the car after 2/3 years and not purchase the car valued in 4 years at 10K.

Any advice welcomed!

[JS2808]

What's the interest rate on the payments?

Pretty certain you could get a new Golf R for similar money with that deposit

[jxbes]

I think its around 10% - which is obviously high, and is from VW finance.

I think its a deal for those people willling to ensure they're under their monthly budget?

[JS2808]

Just done some calculations, is your interest rate around 12%?

That's what I've come to based on the figures provided

[JS2808]

jxbes said:

I think its around 10% - which is obviously high, and is from VW finance.

I think its a deal for those people willling to ensure they're under their monthly budget?

Just been on DriveTheDeal and they are offering 5k discount on a new Golf R DSG, haven't looked at CarWow etc.

Based on the figures you have provided you will get a better deal on a brand new car, purely because of the interest rate.

I would look at getting a new one if I were you.

[Stu-nph26]

jxbes said:

Morning,
I was just seeking some advice on a PCP deal that I've haggled on a 66 plate Golf-R - should I take it or leave it?

Golf-R list price: 23,250
Yearly mileage: 10K
Contract agreement: 49 months
Partex my Mk5 Golf GTI: 2250 (note that it needs approx a grands work of work doing on it easily and is bksed)
Cash Deposit: 4200

With the above my monthly would be £280, and would get a major and minor service, and roadside assistance for a year.

I would probably upgrade the car after 2/3 years and not purchase the car valued in 4 years at 10K.

Any advice welcomed!

What is the guaranteed future value of the car? So you're putting in £2,250 from your part x and £4,200 cash? Sounds an awful deal mate if I'm honest.

[SWoll]

JS2808 said:

Just done some calculations, is your interest rate around 12%?

That's what I've come to based on the figures provided

Pretty typical APR on a used PCP

With putting £6.5K down on a £23k car you could loan the rest over 4 years for £375 a month and actually own the car at the end. Or if jumping ship after 2/3 years would have a lot more money in hand towards your next car OP.

[jxbes]

Stu-nph26 said:

What is the guaranteed future value of the car? So you're putting in £2,250 from your part x and £4,200 cash? Sounds an awful deal mate if I'm honest.

The GFV of the car would be £9800.

They were originally asking for 320 a month but now theyre down to the 280. In two minds!

[essayer]

£6900 to rent a Leon Cupra Lux for 2 years

https://leasing.com/independent-brokers/jet-vehicl...

jxbes said:

They were originally asking for 320 a month but now theyre down to the 280. In two minds!

It's not £280/month though is it, you're putting down near £7k on top so it's more like £400/month over four years, near £600/month if you only keep it for two

Edited by essayer on Friday 15th February 11:29

[Gregmitchell]

That’s a terrible deal, walk away!

[jxbes]

essayer said:

It's not £280/month though is it, you're putting down near £7k on top so it's more like £400/month over four years, near £600/month if you only keep it for two

Edited by essayer on Friday 15th February 11:29

Yea you're right - but thats no lost cash though is it? As I can trade in for a newer model later on down the line in 2 years using the car as my deposit?

[Patch1875]

Used car PCP is expensive bank loan would be the way to go.

[DuraAce]

jxbes said:

essayer said:

It's not £280/month though is it, you're putting down near £7k on top so it's more like £400/month over four years, near £600/month if you only keep it for two

Edited by essayer on Friday 15th February 11:29

Yea you're right - but thats no lost cash though is it? As I can trade in for a newer model later on down the line in 2 years using the car as my deposit?

I think this is where people really trip up with these "deals".

At 2yrs into this (49 month, 12‰ interest) deal exactly how much cash (ie deposit for your next car) do YOU think you'll be able to walk away with?

[jxbes]

DuraAce said:

I think this is where people really trip up with these "deals".

At 2yrs into this (49 month, 12‰ interest) deal exactly how much cash (ie deposit for your next car) do YOU think you'll be able to walk away with?

I dont know really? I've never had PCP, and always bought my cars outright - was only considering the PCP option because of some of the perks (good valuation for my car, servicing, warrently, breakdown). If its a bad deal, then its a bad deal and I'll walk away....just needed to confirmation from the masses because I am in unfamilir territory here.

[anonymous-user]

As others have already said, that's a terrible deal.

VW are doing 3.6% APR on PCP for new cars. You can get your first two services for £199 and you'll have the new car warranty.

Get a finance quote on a brand new one via a broker for £28,600 and compare the numbers. I'm willing to bet you'll be paying less interest over the term and will have more equity in the car at the end of the PCP. Depending on the future value figure you may even be making smaller payments too.

[essayer]

DuraAce said:

I think this is where people really trip up with these "deals".

At 2yrs into this (49 month, 12‰ interest) deal exactly how much cash (ie deposit for your next car) do YOU think you'll be able to walk away with?

Yep
Golf R's on AT (obviously very rough figures)

2017 - £22k
2016 - £20k
2015 - £17k
2014 - £15k

I would guess after a couple of years the car will be worth roughly what you owe on the finance?

edit: You'll have paid £13220 in total off the total finance of roughly £25k - so you'll owe the finance co £12k - assuming it's worth about what a 2014/5 car is going for now, as a trade in, you'll be lucky to have anything left at all

Edited by essayer on Friday 15th February 12:40

[Haltamer]

Anything above ~5% APR seems obscene given the offerings of most manufacturers on new PCPs.

[tickedon]

It’s a terrible deal.

Putting the same cash and PartEx into a new car, with deposit contribution and lower finance rate available, I reckon your payments would be about same - approx £278/mo.

Go to carwow and get some bids. You’ll get a new car in exact spec you want for pretty much the same money!

[funkyrobot]

Scary to think that some people will take these offers.

[Begall]

So after paying £19,890 over 4 years, you'll still owe £10,000 on a £23,500 car?

You could lease a brand new Golf R over 2 years for the same per year cost:

https://leasing.com/independent-brokers/car-leasin...

During this time it will covered by a warranty, need one service, no MOT's, and potentially no tyres. Road tax is already included in the price, which offsets the cost of the service. Any equity you think you might have at the end by purchasing used (and you might have some IF you ran it for the whole 4 years and didn't try to trade it in half way through) has to be offset against the risk of it breaking down out of warranty - and by the end you'll be driving a 6+ year old car.

Note: I don't actually think this is a good lease deal, but it shows you how easy it is to better what you've found.