PCP negotiation Golf R
Discussion
Evening Folks,
I've never bought on PCP before, but looking at Golf Rs for nearly new and new, be interested to hear others thoughts on what you can negotiate on.
Spec'd a car up with a few basic bits (like dynamic chassis control) but got the price back down to c£33k using CarWow, which is essentially list price.
Looking at 2015 used models from main dealers with under 30k on clock, the average price is about £22k, with a range from £20k to £25k, which is somewhere in the region of 35-40% depreciation from list price (obviously not taking into consideration options). Some lower value cars with more miles and private/independent traders.
They've suggested the value will be £15k (60% depreciation from list and 55% from OTRP) in 3 years and £18k after 2 years. Dealer says this set by manufacturer.
Can you get them to ring up head office and negotiate on this?
Appreciate their risk is the market might go down and they factor in some profit margin for the used car, but that seems to be taking the Michael a bit, that's 30% lower than the average price I have found, the risk seems to be very much skewed against the buyer.
I assume part of this is to tie you in, i.e. a month before the the end of the finance you'll get a call from the dealership, to inform you that the car has deprecated less than expected and you can now use (some of) the difference as a deposit towards a new car. So, if you want to stay with the manufacturer, you're just pre-paying some equity into the next car, and perhaps you'll get a lower monthly premium as a result.
However, if you hand it back, you've paid £5-£8k + interest more than the actual depreciation, which the dealer is now going to make selling the car on the used market, unless you buy it in cash and go through the massive ball ache of selling it yourself or trading it into another manufacturer.
But it also makes the monthly cost much higher and starts to make leasing look much more attractive.
You can lease a bog-standard Golf R for 9/23 (10k miles) £310 PCM (the list price is essentially the same as the above negotiated price). Total cost for 24 months = just under £10k.
To compare apples with apples, VW final value is £18k after 24 months, so with same deposit, monthly cost would be £648 (5.9% APR, 10 miles PA). Total cost £26k.
You can reduce this cost a bit by putting in a larger deposit, so less of the depreciation is incurring interest but you're still looking at double the cost over the same period. And it's not really any better over the 36 months, at £546 PCM.
I'm guessing they've probably got some lower APR rates up their sleeve if you push, but even with 3.9% it doesn't make a big dent when you factor in such low residual value and compare it to lease options.
If you take that budget to the leasing market, you can get some much more exciting cars than a Golf R, the only reason I wouldn't get the leased Golf R is that I want the DCC, it's annoying it isn't standard but I'm not going to pay double the money to get it.
Has anyone ever managed to convince a manufacturer to improve on the final value, if you could get that up and the APR down, with a bigger deposit, it starts to look a bit more sensible.
Thanks in advance,
Best, HBT
PCP Calculator source: https://www.carwow.co.uk/pcp-calculator
I've never bought on PCP before, but looking at Golf Rs for nearly new and new, be interested to hear others thoughts on what you can negotiate on.
Spec'd a car up with a few basic bits (like dynamic chassis control) but got the price back down to c£33k using CarWow, which is essentially list price.
Looking at 2015 used models from main dealers with under 30k on clock, the average price is about £22k, with a range from £20k to £25k, which is somewhere in the region of 35-40% depreciation from list price (obviously not taking into consideration options). Some lower value cars with more miles and private/independent traders.
They've suggested the value will be £15k (60% depreciation from list and 55% from OTRP) in 3 years and £18k after 2 years. Dealer says this set by manufacturer.
Can you get them to ring up head office and negotiate on this?
Appreciate their risk is the market might go down and they factor in some profit margin for the used car, but that seems to be taking the Michael a bit, that's 30% lower than the average price I have found, the risk seems to be very much skewed against the buyer.
I assume part of this is to tie you in, i.e. a month before the the end of the finance you'll get a call from the dealership, to inform you that the car has deprecated less than expected and you can now use (some of) the difference as a deposit towards a new car. So, if you want to stay with the manufacturer, you're just pre-paying some equity into the next car, and perhaps you'll get a lower monthly premium as a result.
However, if you hand it back, you've paid £5-£8k + interest more than the actual depreciation, which the dealer is now going to make selling the car on the used market, unless you buy it in cash and go through the massive ball ache of selling it yourself or trading it into another manufacturer.
But it also makes the monthly cost much higher and starts to make leasing look much more attractive.
You can lease a bog-standard Golf R for 9/23 (10k miles) £310 PCM (the list price is essentially the same as the above negotiated price). Total cost for 24 months = just under £10k.
To compare apples with apples, VW final value is £18k after 24 months, so with same deposit, monthly cost would be £648 (5.9% APR, 10 miles PA). Total cost £26k.
You can reduce this cost a bit by putting in a larger deposit, so less of the depreciation is incurring interest but you're still looking at double the cost over the same period. And it's not really any better over the 36 months, at £546 PCM.
I'm guessing they've probably got some lower APR rates up their sleeve if you push, but even with 3.9% it doesn't make a big dent when you factor in such low residual value and compare it to lease options.
If you take that budget to the leasing market, you can get some much more exciting cars than a Golf R, the only reason I wouldn't get the leased Golf R is that I want the DCC, it's annoying it isn't standard but I'm not going to pay double the money to get it.
Has anyone ever managed to convince a manufacturer to improve on the final value, if you could get that up and the APR down, with a bigger deposit, it starts to look a bit more sensible.
Thanks in advance,
Best, HBT
PCP Calculator source: https://www.carwow.co.uk/pcp-calculator
I also think you will struggle to get a used golf with an apr lower than 10%. I tried numerous main dealers a while ago and non would budge from there notmal used rate which was circa 10%.
Sometimes cheaper to buy new on a PCP with the discounts you can get through c2c, DtD Carwow etc or as you have mentioned keep looking for a good lease deal
Sometimes cheaper to buy new on a PCP with the discounts you can get through c2c, DtD Carwow etc or as you have mentioned keep looking for a good lease deal
Butter Face said:
No. OFP are set by the finance house based on the start mileage, age, mileage allowance etc that is put into the system.
You can normally change an OFP down at will, but there will be no capability to put it up. Finance company set their price and stick to it.
Yep, this. There won’t be any movement in the PCP quote, just the discount you achieve, but it sounds like you’ve probably got as far as you can there. You can normally change an OFP down at will, but there will be no capability to put it up. Finance company set their price and stick to it.
handbraketurn said:
Appreciate their risk is the market might go down and they factor in some profit margin for the used car, but that seems to be taking the Michael a bit, that's 30% lower than the average price I have found, the risk seems to be very much skewed against the buyer.
Think you might be surprised how low dealers p/x value will be.Appreciate where you're coming from, but it's unusual to complain about the final value being too low. It's a common complaint on the MB forums I visit that 'owners' want to buy the car but the GFV is more that it's worth.
If it's worth more you get the money back if you do anything other than hand it back - and PCP is designed to roll you from one deal to another, hence it's sometimes referred to as 'Perpetual Car Prison'. The interest paid doesn't matter as you're paying that anyway on the GFV amount.
andrewparker said:
Butter Face said:
No. OFP are set by the finance house based on the start mileage, age, mileage allowance etc that is put into the system.
You can normally change an OFP down at will, but there will be no capability to put it up. Finance company set their price and stick to it.
Yep, this. There won’t be any movement in the PCP quote, just the discount you achieve, but it sounds like you’ve probably got as far as you can there. You can normally change an OFP down at will, but there will be no capability to put it up. Finance company set their price and stick to it.
markstev0 said:
I also think you will struggle to get a used golf with an apr lower than 10%. I tried numerous main dealers a while ago and non would budge from there notmal used rate which was circa 10%.
Sometimes cheaper to buy new on a PCP with the discounts you can get through c2c, DtD Carwow etc or as you have mentioned keep looking for a good lease deal
To clarify, looking for a new or lease, I was posting the used values to demonstrate the final value from the finance company was 30% or more off what they're being marketed at. And was enquiring if you could negotiate upwards to reduce the amount of 'depreciation' you're paying with interest, but the above response shows, computer says no. Sometimes cheaper to buy new on a PCP with the discounts you can get through c2c, DtD Carwow etc or as you have mentioned keep looking for a good lease deal
However, FYI some dealer will give 5.9/6.9% APR on nearly new cars, if not, try Lombard, they offer PCP at 5.9%. No idea what the final value will be though, but has to be within one year old and purchased from main dealer.
Agreed on the lease, seems like the best option.
MTech535 said:
You can add options like dcc on a leased vehicle, will still probably be cheaper than the pcp cost.
Interesting, didn't realise you could spec leases, always assumed they were standard bulk purchases. Patch1875 said:
I would go used with a cheap bank loan.
Traditionally so would I, however, several friends (and friends of friends) have been very unlucky with used high-performance cars having major component failures outside of warranty one costing £7000 pounds and the other costing £16k. The attraction of PCP and lease is driving around a car under manufacturer warranty which I've never had before.
Thanks all for the responses very helpful!
Sheepshanks said:
handbraketurn said:
Appreciate their risk is the market might go down and they factor in some profit margin for the used car, but that seems to be taking the Michael a bit, that's 30% lower than the average price I have found, the risk seems to be very much skewed against the buyer.
Think you might be surprised how low dealers p/x value will be.Appreciate where you're coming from, but it's unusual to complain about the final value being too low. It's a common complaint on the MB forums I visit that 'owners' want to buy the car but the GFV is more that it's worth.
If it's worth more you get the money back if you do anything other than hand it back - and PCP is designed to roll you from one deal to another, hence it's sometimes referred to as 'Perpetual Car Prison'. The interest paid doesn't matter as you're paying that anyway on the GFV amount.
Until someone mentioned earlier, I was under the impression leases were just on standard cars, I've always bought used cars in the past, so this is all new and I'm researching away to work out the best options.
The main thing I want as mentioned above is to have a car in warranty, i'm not too bothered if I hand it back, so the less I pay the better, so leasing sounds like it's probably the best route.
Thanks for the response.
ghost83 said:
I found it cheaper to buy new
4.9% compared to 10% on used
Got 7k off my car and no was told the gfv wasn’t adjustable
Yeah, def can be, I know audi are offering 3.9% on some models. But I spoke to a lookers dealer about nearly new and we discussed 5.9% and another 6.9%. Some groups have some other rates available if they want to shift something. 4.9% compared to 10% on used
Got 7k off my car and no was told the gfv wasn’t adjustable
As mentioned earlier, you can use Lombard at 5.9% for used cars if under a year old.
If you don't want to keep though, leasing seems like no-brainer.
PCP @ 4.9%
34k new value
2.8k deposit
36 months/10k miles
18k FVP
13.2k to finance.
£469 PCM
Vs.
Lease at £310 PCM 9/23
Or for £30 a month for than the above PCP
https://www.contracthireandleasing.com/independent...
I have decided to VT my Up! as I was offered £350 less than the GFV when part exichanging on an Up GTI. (PCP ends in October). My wife has been in a similar situation on her last 2 Skoda PCP deals, where there has been no equity left in the car to put towards a new one.I think that PCP’s just don’t stack up and so I’ve gone the lease route on my new car. To me it just makes sense considering what seems to be happening with PCP’s. Just my tuppence worth.
Jonesy1972 said:
I have decided to VT my Up! as I was offered £350 less than the GFV when part exichanging on an Up GTI. (PCP ends in October). My wife has been in a similar situation on her last 2 Skoda PCP deals, where there has been no equity left in the car to put towards a new one.I think that PCP’s just don’t stack up and so I’ve gone the lease route on my new car. To me it just makes sense considering what seems to be happening with PCP’s. Just my tuppence worth.
Agreed, I used to think it was a mugs game leasing, but actually, when you do the math and take into consideration the risk of major costs outside of warranty it makes sense. I do approx 500-800 miles a month for business (£225-£360 mileage claim), so as long as a lease is within that window, it's not costing me anything or very little on top of the usual motoring costs.
Check this out:
http://www.car-brokers.co.uk/personal-lease-cars/v...
handbraketurn said:
Until someone mentioned earlier, I was under the impression leases were just on standard cars, I've always bought used cars in the past, so this is all new and I'm researching away to work out the best options.
You can add options, but often (not always though) they lease will bump up by the full cost of the option. To be fair, that tends to happen with cars bought any other way too - you lose the value of options when you sell.handbraketurn said:
The main thing I want as mentioned above is to have a car in warranty, i'm not too bothered if I hand it back, so the less I pay the better, so leasing sounds like it's probably the best route.
You could buy VW's extended warranty - find a 3yr old car to give you an idea of what it would cost: https://insurewithvolkswagen.co.uk/extended-warran...Sheepshanks said:
handbraketurn said:
Until someone mentioned earlier, I was under the impression leases were just on standard cars, I've always bought used cars in the past, so this is all new and I'm researching away to work out the best options.
You can add options, but often (not always though) they lease will bump up by the full cost of the option. To be fair, that tends to happen with cars bought any other way too - you lose the value of options when you sell.handbraketurn said:
The main thing I want as mentioned above is to have a car in warranty, i'm not too bothered if I hand it back, so the less I pay the better, so leasing sounds like it's probably the best route.
You could buy VW's extended warranty - find a 3yr old car to give you an idea of what it would cost: https://insurewithvolkswagen.co.uk/extended-warran...Jonesy1972 said:
Someone with more knowledge and a better memory than me will be along in a minute to say whether that’s a good deal or not. I’m pretty certain it’s quite a bit above the some of the legendary deals of old. Have you considered a Leon Cupra, there’s some good deals on those ATM.
Cheapest I could find but very open to cheaper. 
I like the LC, but I want an AWD because I'm getting old and want something with lots of grip in the wet.
Plus, I really like the looks of the GR.
Edited by handbraketurn on Sunday 11th March 21:47
handbraketurn said:
Jonesy1972 said:
Someone with more knowledge and a better memory than me will be along in a minute to say whether that’s a good deal or not. I’m pretty certain it’s quite a bit above the some of the legendary deals of old. Have you considered a Leon Cupra, there’s some good deals on those ATM.
Cheapest I could find but very open to cheaper. I like the LC, but I want an AWD because I'm getting old and want something with lots of grip in the wet.
Plus, I really like the looks of the GR.
Edited by handbraketurn on Sunday 11th March 21:47
A golf R has no braking advantage in the wet than a Leon Cupra
All the golf gives you is more traction, ie the ability to deliver power when you have grip
I agree double the chances of traction is key. But don’t confuse the principles here
VAGLover said:
handbraketurn said:
Jonesy1972 said:
Someone with more knowledge and a better memory than me will be along in a minute to say whether that’s a good deal or not. I’m pretty certain it’s quite a bit above the some of the legendary deals of old. Have you considered a Leon Cupra, there’s some good deals on those ATM.
Cheapest I could find but very open to cheaper. I like the LC, but I want an AWD because I'm getting old and want something with lots of grip in the wet.
Plus, I really like the looks of the GR.
Edited by handbraketurn on Sunday 11th March 21:47
A golf R has no braking advantage in the wet than a Leon Cupra
All the golf gives you is more traction, ie the ability to deliver power when you have grip
I agree double the chances of traction is key. But don’t confuse the principles here
It's not slow, that's for sure:
https://www.youtube.com/watch?v=8Bbtr1uLmQY
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