911 GTS Finance Question
Discussion
Hi guys, I'm buying a 2018 911 GTS that has massive spec, been offered £48.5k as a GFV or £51.7k not guaranteed. Difference works out about £130 a month so about £6,250 over the 48 months and just wondering if you would go with the GFV or the higher figure? This will be my first Porsche and I would assume even in 4 years it would be worth around the £50k mark at least and even if I subtract £6k from the £51.7 is £45.7 (the £6k I've saved that's extra in my pocket over paying the £130) a month so realistically the car would have to be worth less than £45.7k for me to be 'worse off' taking the £51.7 future value?
The GFV is the finance company underwriting the car at that price for you at the end of the PCP term. This assumes if you couldn't be bothered to or can't sell the car yourself at a higher price to repay the balloon.
The higher balloon offer you have doesn't provide the same guarantee so you take your chances with repaying the balloon by selling the car.
Which option you choose depends on if you see the risk of GTS prices falling below the GFV. The additional monthly amount is not actually a cost if you think about it as you are repaying more principal on the loan. The thing with PCP is it artificially inflates the total interest cost for buyers if GFV/balloon is kept high or if there is a longer repayment period. You are paying smaller monthly amounts but the total cost is higher as you accrue interest on a higher amount or for a longer amount of time (sometimes both).
Assuming the interest rate on both loans are the same and if you can afford the higher monthly payment, I would always go for the one with the lower balloon as the overall interest cost is going to be lower. The GFV is offering a backstop if prices tank at the end of the term - personally I think this is worth paying for except you aren't even really paying extra for it compared to the other loan to be honest. You can always sell the car yourself if the value is higher.
The loan without the GFV still requires you to be able to sell at the higher price to repay the loan but you are accruing interest on this higher amount until you repay the loan. Which one you go for depends on your own circumstances though and I can see why people are attracted to paying lower amounts to get into a nice car.
The higher balloon offer you have doesn't provide the same guarantee so you take your chances with repaying the balloon by selling the car.
Which option you choose depends on if you see the risk of GTS prices falling below the GFV. The additional monthly amount is not actually a cost if you think about it as you are repaying more principal on the loan. The thing with PCP is it artificially inflates the total interest cost for buyers if GFV/balloon is kept high or if there is a longer repayment period. You are paying smaller monthly amounts but the total cost is higher as you accrue interest on a higher amount or for a longer amount of time (sometimes both).
Assuming the interest rate on both loans are the same and if you can afford the higher monthly payment, I would always go for the one with the lower balloon as the overall interest cost is going to be lower. The GFV is offering a backstop if prices tank at the end of the term - personally I think this is worth paying for except you aren't even really paying extra for it compared to the other loan to be honest. You can always sell the car yourself if the value is higher.
The loan without the GFV still requires you to be able to sell at the higher price to repay the loan but you are accruing interest on this higher amount until you repay the loan. Which one you go for depends on your own circumstances though and I can see why people are attracted to paying lower amounts to get into a nice car.
Edited by Prestonese on Wednesday 7th August 07:36
The dealer will be able to tell you total cost including all fees etc for both options. Then you can see what that £126/month gets you overall.
You’ll then be able to see whether the total cost paid over the period compares with the difference in value between the guarantee and what you might actually expect to get.
You’ll then be able to see whether the total cost paid over the period compares with the difference in value between the guarantee and what you might actually expect to get.
rianos said:
Hi guys, I'm buying a 2018 911 GTS that has massive spec, been offered £48.5k as a GFV or £51.7k not guaranteed. Difference works out about £130 a month so about £6,250 over the 48 months and just wondering if you would go with the GFV or the higher figure? This will be my first Porsche and I would assume even in 4 years it would be worth around the £50k mark at least and even if I subtract £6k from the £51.7 is £45.7 (the £6k I've saved that's extra in my pocket over paying the £130) a month so realistically the car would have to be worth less than £45.7k for me to be 'worse off' taking the £51.7 future value?
are you going to keep it 4 years ?Porsche911R said:
are you going to keep it 4 years ?
That is the important question...if you know you are going to keep the car for the term then the GFV is relevant but if you do like to change every 2 / 3 years and you choose to sell / p/ex before the end of the term, the GFV will have no relevance.My own experiences of 911's, their relatively strong residuals and PCP deals mean I would opt for the non GFV.
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