PCP concerns grrr
Discussion
Hey everyone , this is my first post so sorry if i ask any stupid questions 
I am looking to get an Audi A3 on pcp , it seems perfect as I wish to change cad every 3 years and not bothered about owning it. I have read many articles and forums. It's the deposit which confuses me. I have read that a high deposit could be bad but I am confused as to why.
If someone would just explain to me i would be very very grateful
Thanks
I am looking to get an Audi A3 on pcp , it seems perfect as I wish to change cad every 3 years and not bothered about owning it. I have read many articles and forums. It's the deposit which confuses me. I have read that a high deposit could be bad but I am confused as to why.
If someone would just explain to me i would be very very grateful
Thanks
buying a audi on fiance especially PCP will not win you many good replys on this website. its cash is king and audis are hated!
basicly PCP works by you pay a deposit, then you pay monthly payments with intrest included, keep the car for 3 years or how ever long the term is, then at the end, any equaity left in the car ( the value of the car minus any outstanding fiance left ) can be used as a deposit towards another car, or you can walk away, or sell the car pay the finance and keep the diffrence.
big deposits are frowned on because its money that you effectively loose i suppose, if you put in 5k and then pay 5k over 3 years on a 15k car then walk away youve spent 10k on nothing.
i think finance is a good idea, but if your young 3 years is a long time to spend in one car, and you have to make sure your cercomstances dont change, like you change jobs, wanna move out etc
theres nothing wrong with pcping a car, you can always sell it privately whenever you want so long as you pay off the rest, just bare in mind the A3 is a reps car, and if you do want to sell it your be competing against 1000 other examples, espeically if your not going to buy any options.
if you do get a A3 make sure its a desirable one such as S line, with good options like xenons, sat nav, better seats, and a decent engine, a audi is seen as a premuim car and should be speced as such.
persoanlly i wouldnt fiance though a dealer, unless it was 0% and included some free servicing. have a look at lease days they work in the same sort of way except you cant keep the car at the end or sell it but they are generally cheaper.
but as i said 3 years is a long time, where do you want to be in june 2017?
basicly PCP works by you pay a deposit, then you pay monthly payments with intrest included, keep the car for 3 years or how ever long the term is, then at the end, any equaity left in the car ( the value of the car minus any outstanding fiance left ) can be used as a deposit towards another car, or you can walk away, or sell the car pay the finance and keep the diffrence.
big deposits are frowned on because its money that you effectively loose i suppose, if you put in 5k and then pay 5k over 3 years on a 15k car then walk away youve spent 10k on nothing.
i think finance is a good idea, but if your young 3 years is a long time to spend in one car, and you have to make sure your cercomstances dont change, like you change jobs, wanna move out etc
theres nothing wrong with pcping a car, you can always sell it privately whenever you want so long as you pay off the rest, just bare in mind the A3 is a reps car, and if you do want to sell it your be competing against 1000 other examples, espeically if your not going to buy any options.
if you do get a A3 make sure its a desirable one such as S line, with good options like xenons, sat nav, better seats, and a decent engine, a audi is seen as a premuim car and should be speced as such.
persoanlly i wouldnt fiance though a dealer, unless it was 0% and included some free servicing. have a look at lease days they work in the same sort of way except you cant keep the car at the end or sell it but they are generally cheaper.
but as i said 3 years is a long time, where do you want to be in june 2017?
I am only 22 years old and i will be starting my new job in September. A car would definitely be required. Cash is king but only if you got it ! , I am only considering PCP because I would like to change the car every 2-3 years and affordable monthly payments.
What worries me is at the end of the agreement , I do not want to be in negative equity. The offer i was presented with recently was Audi A3 3dr 1.4 FSi , 4K deposit at £265 a month , I think it was a 36 month agreement (maybe 48). A the end of the agreement when i choose to change car , would i then need to make another deposit ? or just hope I get positive equity ?
What worries me is at the end of the agreement , I do not want to be in negative equity. The offer i was presented with recently was Audi A3 3dr 1.4 FSi , 4K deposit at £265 a month , I think it was a 36 month agreement (maybe 48). A the end of the agreement when i choose to change car , would i then need to make another deposit ? or just hope I get positive equity ?
PCP shouldn't land you in negative equity, you just give the car back at the end of the deal.
For example on lings cars the Audi you want will be 3 + 35 @ £344 a month so the deposit is £922.
Realised I'm on about leasing - as you were.
For example on lings cars the Audi you want will be 3 + 35 @ £344 a month so the deposit is £922.
Edited by MajorProblem on Tuesday 27th May 20:57
Realised I'm on about leasing - as you were.
Edited by MajorProblem on Tuesday 27th May 21:00
Regardless of deposit the GFV (guaranteed final value) that Audi offer you will remain the same.
With PCP you are effectively paying payments down to the agreed GFV after the term (say 36 months) Although you pay decreasing interest on a monthly basis on the full amount borrowed.
If you put in a bigger deposit, you will save on some interest charges and have lower monthly payments as you are still just paying down to that same GFV.
If you go heavy on options leasing gets expensive but worth getting a quote before committing to PCP
With PCP you are effectively paying payments down to the agreed GFV after the term (say 36 months) Although you pay decreasing interest on a monthly basis on the full amount borrowed.
If you put in a bigger deposit, you will save on some interest charges and have lower monthly payments as you are still just paying down to that same GFV.
If you go heavy on options leasing gets expensive but worth getting a quote before committing to PCP
Let me explain the best I can do.
A PCP is purchase agreement in which you are agreeing to purchase the vehicle of certain amount of time. The vehicle is given a Guaranteed Future Value. In 3 years time (or however long & mileage it is) you will then have three options.
1) Pay the GFV and keep the car - you said this isn't important so we might as well stike that option off
2) P/X the car. You usually will have maximum £1,000 equity, if that. If you put £4k down this time, you will need to find another £3000 in 3 years time to get to similar monthly payments.
3) Hand the vehicle back. If the car is negative equity, which with an Audi is possible depending on how much discount you get, simply hand the car back to Audi. You will then need to find the £4,000 again to start a new PCP with similar payments.
What I would recommend instead is to contract hire. With this, there's no worry of selling the vehicle, and you won't be in negative equity as that doesn't exist. You're only option is to hand the car back. However, your initial payment will typically be 3 to 6 monthly payments, way less that £4k. Usually, cheaper monthly payments too.
The only drawback to this against PCP in my eyes, is it is a contract and you are tied in for the contract period. If you want to change car after 1 year on PCP, you will be able to as you can simply purchase the car at any time and settle the finance.
For instance, on a A3 1.4 TSI SE from a quick google search, you can get this with £1,500 deposit, £250 a month over 3 years, 10,000 miles a year.
http://www.rivervaleleasing.co.uk/car-leasing/audi...
A PCP is purchase agreement in which you are agreeing to purchase the vehicle of certain amount of time. The vehicle is given a Guaranteed Future Value. In 3 years time (or however long & mileage it is) you will then have three options.
1) Pay the GFV and keep the car - you said this isn't important so we might as well stike that option off
2) P/X the car. You usually will have maximum £1,000 equity, if that. If you put £4k down this time, you will need to find another £3000 in 3 years time to get to similar monthly payments.
3) Hand the vehicle back. If the car is negative equity, which with an Audi is possible depending on how much discount you get, simply hand the car back to Audi. You will then need to find the £4,000 again to start a new PCP with similar payments.
What I would recommend instead is to contract hire. With this, there's no worry of selling the vehicle, and you won't be in negative equity as that doesn't exist. You're only option is to hand the car back. However, your initial payment will typically be 3 to 6 monthly payments, way less that £4k. Usually, cheaper monthly payments too.
The only drawback to this against PCP in my eyes, is it is a contract and you are tied in for the contract period. If you want to change car after 1 year on PCP, you will be able to as you can simply purchase the car at any time and settle the finance.
For instance, on a A3 1.4 TSI SE from a quick google search, you can get this with £1,500 deposit, £250 a month over 3 years, 10,000 miles a year.
http://www.rivervaleleasing.co.uk/car-leasing/audi...
In simple terms the reason a big deposit it not a good idea is it makes your monthly payments artificially low. This means at the end of the term you will not be able to purchase a similar car at the same monthly cost without adding cash to the equity you have in you current car.
Example.
You put £5k down on a £20k A3
After 3 years the final value is £9k and they offer you £11k px meaning you have a £2k deposit. Without an extra £3k to add your payments on the replacement will be more or you need to put away another £80 a month now to put down next time.
All figures are estimates as an example.
Example.
You put £5k down on a £20k A3
After 3 years the final value is £9k and they offer you £11k px meaning you have a £2k deposit. Without an extra £3k to add your payments on the replacement will be more or you need to put away another £80 a month now to put down next time.
All figures are estimates as an example.
t955daytona said:
In simple terms the reason a big deposit it not a good idea is it makes your monthly payments artificially low. This means at the end of the term you will not be able to purchase a similar car at the same monthly cost without adding cash to the equity you have in you current car.
Example.
You put £5k down on a £20k A3
After 3 years the final value is £9k and they offer you £11k px meaning you have a £2k deposit. Without an extra £3k to add your payments on the replacement will be more or you need to put away another £80 a month now to put down next time.
All figures are estimates as an example.
thankyou , this helped a lot. I always thought i would get the A3 on PCP , then 3 years down the line get an A5, now i know this not possible without paying the deposit again just to get comfortable monthly payments.Example.
You put £5k down on a £20k A3
After 3 years the final value is £9k and they offer you £11k px meaning you have a £2k deposit. Without an extra £3k to add your payments on the replacement will be more or you need to put away another £80 a month now to put down next time.
All figures are estimates as an example.
Also I am not comfortable with the fact I never own anything in the end after giving so much money. Thanks everyone for your input.
I been changing my mind every couple hours now, salesman have just totally confused the s
t out of me this week. Im thinking now to find a car on 0% finance. then just sell it my self and repeat anonymous said:
[redacted]
yeah it certainly is. This is also going to be my first car. I passed when I was 18 but then just did not really need a car. Theres just so many options ...sigh
At first i was going to buy a car privately for around 5k ish , but then after getting the new job i thought i could maybe treat my self and get a new better car :/
Brum,
In all seriousness, my personal suggestion would be this all things considering.
If you don't need the Audi badge, I would go for a VW Golf GTD lease.
Supposedly, you can get a 2.0TDI GTD (nice spec car), for £270 a month, fully maintained (no need for tyres or servicing costs), £1,600 down.
Insurance is cheap on these because of the safety camera at the front. I am 20 on the same car. With me as the main driver, and 3 additional drivers, my insurance is £600.
http://www.contracthireandleasing.com/car-leasing-...
In all seriousness, my personal suggestion would be this all things considering.
If you don't need the Audi badge, I would go for a VW Golf GTD lease.
Supposedly, you can get a 2.0TDI GTD (nice spec car), for £270 a month, fully maintained (no need for tyres or servicing costs), £1,600 down.
Insurance is cheap on these because of the safety camera at the front. I am 20 on the same car. With me as the main driver, and 3 additional drivers, my insurance is £600.
http://www.contracthireandleasing.com/car-leasing-...
I wouldn't. What if the job ceases to exist in six months?
Buy and run what you can afford now, if it's a snotter then so be it. When you're a bit more secure and have got a clear perspective on how much of your take-home you can comfortably afford to commit to a car - that is the time to start thinking about how to fund something nicer.
Bitter experience speaking
Buy and run what you can afford now, if it's a snotter then so be it. When you're a bit more secure and have got a clear perspective on how much of your take-home you can comfortably afford to commit to a car - that is the time to start thinking about how to fund something nicer.
Bitter experience speaking
I think it would be a good idea to get settled in your job first honestly then in a year go for it, they could offer a company car or some sort of scheme like a lot of companies do.
I have a friend who finished Uni got a 10 grand loan, bought a Merc clc, sold it bought a cooper s, crashed it, bought a mini convetable, sold it, got another mini, sold it, bought a c30, sold it, bought a rep spec Audi a3. All in the space since last September to now. He's also changed jobs so you will be surpised what can change.
I have a friend who finished Uni got a 10 grand loan, bought a Merc clc, sold it bought a cooper s, crashed it, bought a mini convetable, sold it, got another mini, sold it, bought a c30, sold it, bought a rep spec Audi a3. All in the space since last September to now. He's also changed jobs so you will be surpised what can change.
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