Is this PCP a good deal?

[Leicesterdave]

I hate finance- and don't understand it much I must confess. I don't know if this screams of a great deal- I don't like being tied to finance for years... Could I get a better car for the money?

Seat Ibiza FR DSG 113bhp with 4 options:

Full LED headlights
Adaptive Cruise
Connecting box
Rear Parking sensors

Trading in a 2016 1.4 TFSI Audi A1 Sline DSG- 30,000 miles by the time I P/X it in March. I had to trade it in as our company is changing its colours. I would not even think of changing if that wasn't the case.

" I have adjusted the PCP quote to 15k miles per year and I have removed the Keyless entry and replaced it with LED Headlights. The new quote comes to £237.90 per month over 49months with just the equity in your car as deposit"

The same car on HP works out at £289.18 per month over 60months.

[kiethton]

If you otherwise like the Audi and it's just the colour why it wrap it?

[Leicesterdave]

Well wrapping it would cost as much as the cost to change briefly!

[Burgerbob]

Leicesterdave said:

I hate finance- and don't understand it much I must confess. I don't know if this screams of a great deal- I don't like being tied to finance for years...

Then don't look at PCP deals - it's a life time commitment. Once you get to the end of the term, you'll end up either carless or being forced to trade in for another car on finance.

Can't comment on if the deal is any good - but I've always looked at the quoted APR %. If it's higher than the APR you could get on a personal loan then you're paying too much.

Leicesterdave said:

I had to trade it in as our company is changing its colours. I would not even think of changing if that wasn't the case.

Not sure I get this, if its a private car then what's your company changing colours got to do with it. If it's your company, do you really need to match the colour of your car?

[Leicesterdave]

It's a franchise basically.

[silentbrown]

Leicesterdave said:

Could I get a better car for the money?

I think it's impossible to tell without knowing what equity (positive or negative) you have in the Audi. If the Audi's on finance and you're bailing out after less than two years you're quite likely in negative equity (it's worth less than you owe) so the amount you're paying for the Seat has to be increased to cover it.

The Audi's worth a bit over 12K at a guess? Check here : https://www.capconnect.co.uk/ConsumerValues/Ford.a...

The Seat (with options) can be bought from a broker for around £15,500 https://www.coast2coastcars.co.uk/car-quote/

[Leicesterdave]

I have £1123 equity in the Audi- and it's not negative! Dealer is putting this towards cost of PCP. I'd just rather pay monthly though and eventually own the car.
I find PCP restrictive!

[ferrariF50lover]

Do you really need rear sensors on an Ibiza? Maybe knock them on the head and save the money for something else?

[Mandat]

Leicesterdave said:

I have £1123 equity in the Audi- and it's not negative! Dealer is putting this towards cost of PCP. I'd just rather pay monthly though and eventually own the car.
I find PCP restrictive!

What do you find restrictive about it?

Essentially, it's just like HP but with a deferred final payment, as well as an option to hand bakc if you prefer.

[Basil Hume]

Assuming that the deposits are the same, the above will cost you:

- £11,657.10 to have use of the car for 4 years (with an option to purchase thereafter) using PCP, and;
- £17,350.80 to buy the car over 5 years (owning it at the end) using hire purchase.

You could buy the car at the end of the PCP term, although this is likely to cost a bit more overall than the HP option if you do. The end value for the PCP is relevant here.

If you want a brand new car and you can be specific about the time you will use the car for, it's relatively easy and worthwhile to compare the total amount paid by all the ways to fund it - e.g. HP, PCP, leasing, bank loan etc.

Whether you can get a "better car for the money" depends on many variables, such as how you will use the car and whether you'd consider used.

Edited by Basil Hume on Tuesday 21st November 22:17

[Leicesterdave]

It's restrictive as you have to stick to the miles, be very mindful of damage and also you are tied to the brand as far as I'm aware?

I was quoted:

£15650 for a white Ibiza FR DSG with 4 options:

Connecting Box
Rear Parking sensors
Adaptive Cruise
Full LED pack
(£1,280 worth of options)

I was quoted £15650 for cash and PCP on carwow so how have is it coming to £11,657 over 4 years. The balloon is likely to make the figure go over the £15,650 quoted?

I'm lost!

[Mandat]

Leicesterdave said:

It's restrictive as you have to stick to the miles, be very mindful of damage and also you are tied to the brand as far as I'm aware?

Only if you intend on handing it back at the end of the term.

If you plan on keeping it or part ex-ing for something else, then you can do pretty much what you want with it, in the same way as with a HP or outright cash purchase.

[cuprabob]

Leicesterdave said:

I was quoted £15650 for cash and PCP on carwow so how have is it coming to £11,657 over 4 years. The balloon is likely to make the figure go over the £15,650 quoted?

I'm lost!

PCP will be more than the cash price of £15,650 as you will have to pay interest.

[Mandat]

cuprabob said:

PCP will be more than the cash price of £15,650 as you will have to pay interest.

Generally yes, unless you get a good deposit contribution as part of the PCP deal, which isn't available with the cash purchase.

[cuprabob]

Mandat said:

Generally yes, unless you get a good deposit contribution as part of the PCP deal, which isn't available with the cash purchase.

Indeed, I should have added a disclaimer

[Jonno02]

Mandat said:

Generally yes, unless you get a good deposit contribution as part of the PCP deal, which isn't available with the cash purchase.

Take the contribution. Next day, pay the finance in full.

[silentbrown]

Leicesterdave said:

I'm lost!

Easiest way to think about PCP is this: You're taking out a loan to buy the car. The amount of the loan is the cost of the car, plus interest/fees, less your deposit.

You pay off some of the loan over the course of the contract. (4 years in your case)
The remainder of the loan (the "balloon/GVF/GMFV") must be paid off at the end of the contract, OR you can hand the car back then and walk away.

If you hand it back, the car must be in the condition specified at the start of the contract (i.e mileage)

[nickfrog]

OP - I make it that if you amortise your equity in the A1, the Ibiza will have cost you £260 per month over 48 months.

To put it in perspective, I just ordered a LEON FR 1.4 125 with paint that will cost £193 per month (also amortised) on a straight lease. This comes as std with cruise, full LED and rear sensors.

OK the mileage is lower but adjusting it to your mileage (15k/year) brings the cost up to £225.

So that's £35 / month less but with little chance of positive equity (unless they agree to sell it to me for less than market value at the end, unlikely).

Other upside is that I am only committing for 24 months whereas your last 12 months would be out of warranty (tricky if you have to spend money in a car that you may only keep for a few months). You could buy a 4th year warranty from SEAT of course, but that's more cost.

I am comparing apples to pears but the idea is to give you a benchmark as to what else there is out there, not very far.

Edited by nickfrog on Wednesday 22 November 09:35

[Yegap]

nickfrog said:

OP - I make it that if you amortise your equity in the A1, the Ibiza will have cost you £260 per month over 48 months.

To put it in perspective, I just ordered a LEON FR 1.4 125 with paint that will cost £193 per month (also amortised) on a straight lease. This comes as std with cruise, full LED and rear sensors.

OK the mileage is lower but adjusting it to your mileage (15k/year) brings the cost up to £225.

Edited by nickfrog on Wednesday 22 November 09:35

Hi Nick, sorry to go off topic but have you got a contact for this deal as it is pretty much exactly what I'm after. Many thanks.

[nickfrog]

Yegap said:

Hi Nick, sorry to go off topic but have you got a contact for this deal as it is pretty much exactly what I'm after. Many thanks.

[e-mail]

Note that 15k mileage lease cost is an extrapolation but the £193 is based on my actual contract at 8k miles including all fees.