VWFS PCP on a Q7 - keep going 'til the end or VT now?
Discussion
fronty said:
VT has been accepted by VWFS, nothing to owe, inspection and collection by BCA due on 3rd Feb.
Not quite sure why I was able to VT so early on, my PCP was not due to end until 5th December, I did put down a big deposit but that would have just reduced the amount borrowed not necessarily changed when the 50% threshold was crossed.
So it's cost me an absolute fortune to have this car but I came into some cash had an opportunity to do it. But rather than pump more into (only to walk away at the end) it's time to be sensible and pay down the mortgage. Boo!
Fair enough! Not quite sure why I was able to VT so early on, my PCP was not due to end until 5th December, I did put down a big deposit but that would have just reduced the amount borrowed not necessarily changed when the 50% threshold was crossed.
So it's cost me an absolute fortune to have this car but I came into some cash had an opportunity to do it. But rather than pump more into (only to walk away at the end) it's time to be sensible and pay down the mortgage. Boo!
The Cardinal said:
The large upfront payment / "deposit" will have had a positive impact on the VT point.
The total amount owed is the cost of the car plus all interest, before any payments. So, the larger the first payment, the sooner the 50% threshold is reached.
No it isn’t. The total amount repayable is the amount borrowed plus interest and fees. Cost of the car is irrelevant.The total amount owed is the cost of the car plus all interest, before any payments. So, the larger the first payment, the sooner the 50% threshold is reached.
The car could be worth £100k, if you only borrow £50k from the finance company to contribute towards it, then the VT point will only be 50% of the total amount repayable (incl interest). So as a rough guess, about £27.5k in this scenario.
That's interesting.
Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Edited by The Cardinal on Tuesday 28th January 23:21
The Cardinal said:
That's interesting.
Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Your numbers are a bit odd (and in hindsight so were mine) but regardless the answer is; yes it is possible to not be able to VT.Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Edited by The Cardinal on Tuesday 28th January 23:21
To VT you have to pay half or more of the total amount repayable. This is what you BORROW, plus all the interest and fees.
The total amount repayable includes the optional final payment (balloon), which could be large (as per your example).
This means that you may only be able to VT if you’re near the end of the agreement, either that or you’ll never be able to VT without stumping up the difference to get you to 50%.
As always, the devil is in the detail.
Am I right in thinking it's cost you nearly £40k to own a Q7 for 2 and a half years?
Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
ChocolateFrog said:
Am I right in thinking it's cost you nearly £40k to own a Q7 for 2 and a half years?
Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
Why is it so hard to understand? The car’s OTR price was £70k.Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
roadsmash said:
ChocolateFrog said:
Am I right in thinking it's cost you nearly £40k to own a Q7 for 2 and a half years?
Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
Why is it so hard to understand? The car’s OTR price was £70k.Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
So atleast £35k + interest + any fees?
Whatever it is I think we agree on the definition of absolute fortune.
Edited by ChocolateFrog on Wednesday 29th January 00:15
roadsmash said:
The Cardinal said:
That's interesting.
Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Your numbers are a bit odd (and in hindsight so were mine) but regardless the answer is; yes it is possible to not be able to VT.Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Edited by The Cardinal on Tuesday 28th January 23:21
To VT you have to pay half or more of the total amount repayable. This is what you BORROW, plus all the interest and fees.
The total amount repayable includes the optional final payment (balloon), which could be large (as per your example).
This means that you may only be able to VT if you’re near the end of the agreement, either that or you’ll never be able to VT without stumping up the difference to get you to 50%.
As always, the devil is in the detail.
It clearly states in my agreement that the VT point is c.£10.5k - i.e. half the amount owed (£21k) rather than the amount "borrowed" (£13.5k). I'm really comfortable to be corrected, but I'd like to understand what's going on if so...
Going back to your example, I don't think you'd be able to PCP a car with a 50% deposit.
ChocolateFrog said:
roadsmash said:
ChocolateFrog said:
Am I right in thinking it's cost you nearly £40k to own a Q7 for 2 and a half years?
Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
Why is it so hard to understand? The car’s OTR price was £70k.Plus insurance, tax, fuel and maintenance.
Edit, 2 years and 3 months. And I could well be wrong despite not being entirely and idiot I still struggle to get my head around some of these PCP details.
So atleast £35k + interest + any fees?
Whatever it is I think we agree on the definition of absolute fortune.
Edited by ChocolateFrog on Wednesday 29th January 00:15
ChocolateFrog said:
Because I've no idea how much interest you've paid. Do I assume you paid the OTR price?
So atleast £35k + interest + any fees?
Whatever it is I think we agree on the definition of absolute fortune.
I haven’t paid anything, I’m not the OP. So atleast £35k + interest + any fees?
Whatever it is I think we agree on the definition of absolute fortune.
Edited by ChocolateFrog on Wednesday 29th January 00:15
Even if the OP bought cash and sold the car around now he would be losing circa £40k, so really the PCP element of it makes little difference.
No matter which way you cut it, a £70k SUV will always be expensive to buy/lease/finance.
The Cardinal said:
roadsmash said:
The Cardinal said:
That's interesting.
Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Your numbers are a bit odd (and in hindsight so were mine) but regardless the answer is; yes it is possible to not be able to VT.Let's take another example, where a customer puts £6.5k into a PCP on a c.£20k car (4% APR, 36 months, £164pcm, £9.5k final payment, c.£21k payable it total).
Edited to add: crucially, this would mean £13.5k is "borrowed" from the finance company using roadsmash's logic.
Such an agreement would state that the payee can VT once c.£10.5k has been paid. The VT would be at about 24 months into the agreement. The agreement would clearly include the initial payment in the calculation of the total amount owed.
Using the logic from roadsmash's post (i.e. excluding the first payment from the agreement), then the 50% VT point wouldn't be reached until well after the end of the 36 months.
It would help me to know whether I'm wrong!
Edited by The Cardinal on Tuesday 28th January 23:21
To VT you have to pay half or more of the total amount repayable. This is what you BORROW, plus all the interest and fees.
The total amount repayable includes the optional final payment (balloon), which could be large (as per your example).
This means that you may only be able to VT if you’re near the end of the agreement, either that or you’ll never be able to VT without stumping up the difference to get you to 50%.
As always, the devil is in the detail.
It clearly states in my agreement that the VT point is c.£10.5k - i.e. half the amount owed (£21k) rather than the amount "borrowed" (£13.5k). I'm really comfortable to be corrected, but I'd like to understand what's going on if so...
Going back to your example, I don't think you'd be able to PCP a car with a 50% deposit.
Amount borrowed would be just the amount you originally needed, not what is repayable.
Comparing your PCP agreement with another is pointless, the car, the term, the interest, the deposit, the optional final payment, all have a bearing on the VT point.
As I said, in hindsight, my example was a little extreme, but the point remains.
liner33 said:
Cara are expensive - shocker . This has nothing to do with the way the car is financed
No doubt, I'm just a bit out of date. I guess the days of getting 20k off the OTR price of large and expensive cars are gone. In my head £1000-£1500 a month gets you a lot more than a Q7 but obviously not.
ChocolateFrog said:
No doubt, I'm just a bit out of date. I guess the days of getting 20k off the OTR price of large and expensive cars are gone.
In my head £1000-£1500 a month gets you a lot more than a Q7 but obviously not.
Fair.In my head £1000-£1500 a month gets you a lot more than a Q7 but obviously not.
Worth mentioning that the Q7 starts from around 50 grand, so presumably the OP spec’d it up considerably, so it was probably somewhat quite unique/high spec/special (delete as appropriate), which might justify the cost a bit.
Would I spend that sort of money on an SUV? No, but each to their own and all that.
R.Sole said:
Cars are expensive and PCP is making people think they can “afford” them.
The fact that PCP allows people into cars double the price of HP for the same monthlies also exposes them to twice as much depreciation!
A pathetic argument often seen on here. The fact that PCP allows people into cars double the price of HP for the same monthlies also exposes them to twice as much depreciation!
PCP is simply a deferred payment option. It’s not a magical spell or sorcery that allows people to buy cars they “can’t afford.”
It is well known that Premier League footballers on £20k+ a week finance/lease their cars... I suppose they can’t afford them either.
Whether you like it or not, if someone can afford the monthlies (plus maintenance, fuel, insurance tax), then they can afford the car. It’s that simple.
Keep up or be left behind is my advice. Maybe then you wouldn’t have to drive that god awful Lancia.
I’m sure you’ll come back with the usual hyperbole about how I’m wrong blah blah blah, but rest assured I’ve seen it all before on this “motoring forum.”
roadsmash said:
R.Sole said:
Cars are expensive and PCP is making people think they can “afford” them.
The fact that PCP allows people into cars double the price of HP for the same monthlies also exposes them to twice as much depreciation!
A pathetic argument often seen on here. The fact that PCP allows people into cars double the price of HP for the same monthlies also exposes them to twice as much depreciation!
PCP is simply a deferred payment option. It’s not a magical spell or sorcery that allows people to buy cars they “can’t afford.”
It is well known that Premier League footballers on £20k+ a week finance/lease their cars... I suppose they can’t afford them either.
Whether you like it or not, if someone can afford the monthlies (plus maintenance, fuel, insurance tax), then they can afford the car. It’s that simple.
Keep up or be left behind is my advice. Maybe then you wouldn’t have to drive that god awful Lancia.
I’m sure you’ll come back with the usual hyperbole about how I’m wrong blah blah blah, but rest assured I’ve seen it all before on this “motoring forum.”
Does it make you feel superior mentioning my car?
How do you know it’s not on finance?
Edited by R.Sole on Wednesday 29th January 20:24
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