PCP - What Have I Missed??

[SiT]

So was browsing the VW used cars considering a MK6 R when i stumbled across a well specced example in the right colour, options etc. Looked into their 'Solutions' PCP deal which co-incidentally they chuck £500 into deposit for however their interest rate is 10.9% so then Googled PCP finance and it returned a company called Capital.

Capital provide PCP to private individuals on new and used cars providing it meets certain criteria (age, value, mileage etc.) which the R does. So when in put the reg and price details into their calculator they can do a similar PCP deal however their interest rate is only 6.9% - whats the catch??

Seem to have some good testimonials and their process looks quite straightforward, just cautious as not used a 'third party' finance house before?

Any thoughts or experiences?

Si

[rsbmw]

No catch, it's just a finance product with a better rate!

You could probably negotiate VWFS down to 6.9% or possibly lower. With the "deposit contribution" you could work out better off.

[SiT]

Cool that seems to make sense, not bought through a dealer before so didn't know that you could get these rates down, will have a chat and see what they can do.

Si

[Sheepshanks]

SiT said:

So when in put the reg and price details into their calculator they can do a similar PCP deal however their interest rate is only 6.9% - whats the catch??

No catch as such, but you won't get the £500 deposit contribution and the dealer is likely to be much more keen (ie offer further discount and/or a lower interest rate) to get you onto the VW scheme. If you sort your own finance out then effectively you're a cash buyer and dealers don't like that.

I know you're supposed to look at the APR but what I do is just add the up the total amount - deposit, monthly payments, fees etc so that I can think in real pound notes rather than percentages.

[red_slr]

VWFS don't generally negotiate and if they do it will be half a % or something.
You can get much, much better rates going private. Just tell the dealer its a cash purchase before you start to tell them its finance as you might find they try really hard to sell it to someone else on VWFS before they let you have it!!! IYSWIM.

[Far Cough]

The higher rate will return them their £500 + they pretend to stump up at the start. Do the maths on each one to find out TOTAL amount payable at the end.

10.9% is stupidly high in todays climate

[rpm1969]

I buy my used cars using headroom on my offset mortgage. Pick my term, estimate the likely value of the car at the end, and calculate the monthly payment. 2.49% and complete flexibility.

[leemanning]

Have a check for lease deals on these cars. They are pretty notorious to be outrageous and it seems that in the last few days some phenomenal deals on brand new Golf R's have come back online.

Have a look at Silverstone Fleet Management, Freedom contracts and other companies.

You can generally get one for about £2k down and £230 a month on a 2 year lease.

They differ from a PCP by being a fixed term and you are contractually obliged to pay for the full 2 years, so if you want out at any point this will need to be paid. But if you're thinking of this timeline they can't really be beaten and you'll be getting a brand new car for second hand prices.