PCP options - big excess mileage and early termination
Discussion
Apologies if wrong forum.
Two years ago I’d just started a new job which would mean company car allowance, low mileage and a requirement for a sub 4yo car.
Sold my 8 yo Saab and used that as deposit for a Golf R PCP through a VW dealer with a 10k p/a mileage over four years. Very happy.
5 months later job not going as planned and ended up leaving. Didn’t start work again for 6 months so mortgage, car, nursery etc are into the savings and then some.
The job I took has meant a huge increase in mileage. So I now have a 2yo old car that’s just about to hit the 4yr mileage on the PCP
Short version - I realise this is a situation of my own making.
When I took out the PCP I intended to part ex the car after three years and discussed this with the dealer - who may or may not have nodded and said yes simply in order to get the sale - and this may still be the plan.
So I’m lookin for a bit of advice as to what to do in the next 12 months.
My plan had been to p/x the Golf in for a used RS6 (the dealer group also has an Audi franchise) and I believe this may be the simplest if not the best deal for me financially.
But, given the savings disappeared and my car allowance is paid monthly I’ll be able to suck up monthly payments more easily than say buying the Golf outright and using it to trade in at the end of the deal or walking away and paying the mileage excess (as I’d need a deposit for another car whether it’s in one year or two)
Other info to throw in is I could (stress could) be in line for a decent bonus next July/August depending on performance of my accounts but too early to tell.
So, my question is, do I continue with my plan and have a reduced value Golf to trade in within the group for the RS6. Or look at other options now (eg talk to VW finance and see about a restructure to include the excess mileage) or in 12 months.
I’m not necessarily looking for the full contract law implications of this (although if someone knows them please do tell) more some general opinions as neither my wife or any of my friends are the slightest bit into cars and have no actual views either way.
Two years ago I’d just started a new job which would mean company car allowance, low mileage and a requirement for a sub 4yo car.
Sold my 8 yo Saab and used that as deposit for a Golf R PCP through a VW dealer with a 10k p/a mileage over four years. Very happy.
5 months later job not going as planned and ended up leaving. Didn’t start work again for 6 months so mortgage, car, nursery etc are into the savings and then some.
The job I took has meant a huge increase in mileage. So I now have a 2yo old car that’s just about to hit the 4yr mileage on the PCP
Short version - I realise this is a situation of my own making.
When I took out the PCP I intended to part ex the car after three years and discussed this with the dealer - who may or may not have nodded and said yes simply in order to get the sale - and this may still be the plan.
So I’m lookin for a bit of advice as to what to do in the next 12 months.
My plan had been to p/x the Golf in for a used RS6 (the dealer group also has an Audi franchise) and I believe this may be the simplest if not the best deal for me financially.
But, given the savings disappeared and my car allowance is paid monthly I’ll be able to suck up monthly payments more easily than say buying the Golf outright and using it to trade in at the end of the deal or walking away and paying the mileage excess (as I’d need a deposit for another car whether it’s in one year or two)
Other info to throw in is I could (stress could) be in line for a decent bonus next July/August depending on performance of my accounts but too early to tell.
So, my question is, do I continue with my plan and have a reduced value Golf to trade in within the group for the RS6. Or look at other options now (eg talk to VW finance and see about a restructure to include the excess mileage) or in 12 months.
I’m not necessarily looking for the full contract law implications of this (although if someone knows them please do tell) more some general opinions as neither my wife or any of my friends are the slightest bit into cars and have no actual views either way.
You need to do the maths.
What is the excess mileage charge? How many miles over are you going to be and therefore what is the charge going to be?
Is it bigger than the difference in the value of the car?
Financially, you may be best buying the car at the end of the term, and selling privately. More faff, but definitely will save you money over part exchanging it.
Also, and not very PH'y, but you have just blown all your savings "and then some," your mileage has increased massively, is a used RS6 the best way to go
What is the excess mileage charge? How many miles over are you going to be and therefore what is the charge going to be?
Is it bigger than the difference in the value of the car?
Financially, you may be best buying the car at the end of the term, and selling privately. More faff, but definitely will save you money over part exchanging it.
Also, and not very PH'y, but you have just blown all your savings "and then some," your mileage has increased massively, is a used RS6 the best way to go
I'd be incliined to ring VW finance and ask them for a quote for revised payments for the total anticipated miles on the car and see how that looks.
OR set aside an extra £100 a month in to a savings account to deal with it when its trade in / resale / hand back time.
The only time it will become a significant issue is if you tried to VT or hand the car aback at the end of term.
OR set aside an extra £100 a month in to a savings account to deal with it when its trade in / resale / hand back time.
The only time it will become a significant issue is if you tried to VT or hand the car aback at the end of term.
Excess mileage charges would only come into play if you intend on returning the car at the end of the term.
If you choose to sell or p/x the car before the end of the term, then the valuation will take into account the mileage at that time. The reduced value may or may not be greater than the contracted excess mileage rate.
There is of course the suggestion that the excess mileage charges are unenforceable but I don't know the ins and outs of that argument.
If you choose to sell or p/x the car before the end of the term, then the valuation will take into account the mileage at that time. The reduced value may or may not be greater than the contracted excess mileage rate.
There is of course the suggestion that the excess mileage charges are unenforceable but I don't know the ins and outs of that argument.
Will they do a deal that gets you out of the R, and into something a bit more long-hours-and-miles-friendly, with a higher mileage limit?
Really, they're the only people who can do anything more than a guesstimate. So long as you want to stay within a VW Finance vehicle, they'll be happy to work some numbers - it's only if you want to hand that back and move outside their product range that they might get a bit sniffy.
Really, they're the only people who can do anything more than a guesstimate. So long as you want to stay within a VW Finance vehicle, they'll be happy to work some numbers - it's only if you want to hand that back and move outside their product range that they might get a bit sniffy.
... Or some people might just call The Dash Doctor and have their recorded mileage altered by witchcraft.
Not that I'm suggesting anyone should or indeed ever has clocked a PCP'd or PCH'd car.
I'm also absolutely convinced that all the used cars on dealer forecourts are 100% legit and their mileage is spot on. Just to be clear.
Not that I'm suggesting anyone should or indeed ever has clocked a PCP'd or PCH'd car.
I'm also absolutely convinced that all the used cars on dealer forecourts are 100% legit and their mileage is spot on. Just to be clear.
bad company said:
The BBC’s money box program (I posted a link earlier in the thread) implied that you can early terminate the pcp and there’s nothing they can do about the excess miles.
Listen to it.
I listened and was interesting, worth noting though the lease company put 2 missed payments on the guys credit file because he did not payListen to it.
What happens if this job doesn’t work out? As you said, your savings have already taken a hit. You are worried about xs mileage but looking to change to an RS6?! Keep the Golf. When you’ve got your savings buffer back again and can get out of the Golf without having to write a big cheque, start thinking about another car.
jimmy156 said:
You need to do the maths.
(1) What is the excess mileage charge? How many miles over are you going to be and therefore what is the charge going to be?
(2) Is it bigger than the difference in the value of the car?
(3) Financially, you may be best buying the car at the end of the term, and selling privately. More faff, but definitely will save you money over part exchanging it.
(4) Also, and not very PH'y, but you have just blown all your savings "and then some," your mileage has increased massively, is a used RS6 the best way to go
1. 7.2p per mile, at going rate 30,000 over three years which is £2,160 or £2,880 if I go to the end of the deal.(1) What is the excess mileage charge? How many miles over are you going to be and therefore what is the charge going to be?
(2) Is it bigger than the difference in the value of the car?
(3) Financially, you may be best buying the car at the end of the term, and selling privately. More faff, but definitely will save you money over part exchanging it.
(4) Also, and not very PH'y, but you have just blown all your savings "and then some," your mileage has increased massively, is a used RS6 the best way to go
2. Quick search on PH shows..... errr... not a lot. 2015 cars with 30,000 miles 3 at £19k, 1 at £23k; 2015 cars with 40,000 miles one at £22k (modified) and one at £19,250 with 43,000. Then of the 2014 cars there's 4 with 42-44k miles with prices of £16k, £19k, £21k and £23k. So from that the mileage / age makes bugger all difference really. NB none of those cars are Wagons, like mine. they're all hatches.
3. By the look of it, you could be right because I have a final payment of £14k on a car that could still be worth closer to £20k. However unless I get a bonus I won't have the cash saved to buy the car outright without a loan
4. Boo! Hiss! Call yourself a PHer?
I get what you mean though. In a year's time this job will be more certain, the kids will be a little older and nursery fees will be finished etc, etc.The other option was a Discovery to keep for ever as the family do everything car then save up for a sporty little number such as a Caterham, (another) S2000 etc, etc. But that's an entirely different conversation. RS6 is the dream car and, as I said before, would keep me within the VW Finance system so perhaps make transition easier.
Sheepshanks said:
Have you checked what a used RS6 on VW finance costs? I have a feeling it'll be horrible.
Are you still going to doing 20K miles per year in it?
I know.Are you still going to doing 20K miles per year in it?
Lets ignore the RS6 for now, it's more about the Golf and how to play out the next 1-2 years with that.
I want to avoid a PCP on a Goif GTD (the horror!) which locks me into something else for 3 or 4 years or, having to opt out of everything and pick up a banger to do 20k p/a in.
I still find it rather crazy that this whole subject around excess mileage on PCP's has not been ruled one way or another. The BBC programme suggests over 1 million contracts in force, given the number of VT's happening surely some sort of precedent has been set.
I have been charged for my old Audi and given my strong brand loyalty over the years, they still want to charge me. The question of whether it is enforceable remains.
G
I have been charged for my old Audi and given my strong brand loyalty over the years, they still want to charge me. The question of whether it is enforceable remains.
G
If you are traveling your extra miles for work, are you claiming the 45p/mile for the first 10,000 and 25p/mile for the remainder of the mileage.
If your employer doesn't pay at these rates you can get tax relief at the end of the year to cover the difference.
Set this aside and just swallow the cost at the end because the car will have earned its keep.
If you cant claim mileage because the mileage is not work related this wont help, obviously.
Wonder at the second hand values, last year offered pre registered VW Golf R Estate for £28,000.00 makes £22,000 for a 3 year old 40,000 miles version appear steep.
You also say cant buy your current car out at the end of the PCP without taking a loan, Isn't a PCP a loan, so where is the difference, in fact the loan rates can be higher than the Bank rates!
RS 6 are glorious but! If circa £2,000 for excess mileage is an issue on the Golf the RS6 will cost you that in fuel let alone the PCP rate!
If your employer doesn't pay at these rates you can get tax relief at the end of the year to cover the difference.
Set this aside and just swallow the cost at the end because the car will have earned its keep.
If you cant claim mileage because the mileage is not work related this wont help, obviously.
Wonder at the second hand values, last year offered pre registered VW Golf R Estate for £28,000.00 makes £22,000 for a 3 year old 40,000 miles version appear steep.
You also say cant buy your current car out at the end of the PCP without taking a loan, Isn't a PCP a loan, so where is the difference, in fact the loan rates can be higher than the Bank rates!
RS 6 are glorious but! If circa £2,000 for excess mileage is an issue on the Golf the RS6 will cost you that in fuel let alone the PCP rate!
powerstans said:
You also say cant buy your current car out at the end of the PCP without taking a loan, Isn't a PCP a loan, so where is the difference, in fact the loan rates can be higher than the Bank rates!
RS 6 are glorious but! If circa £2,000 for excess mileage is an issue on the Golf the RS6 will cost you that in fuel let alone the PCP rate!
It's not the same as a bank loan though, as there's a lump sum to pay at the end. Between now and the end of the contract I don't expect I'll be able to save £14k (the balloon payment), so I would have to take out a loan. That means keeping the Golf until the loan is paid off (not a huge problem in the scheme of things) or, sell the car to make a few quid. Unless the car is worth considerably more than £16k I'd only make pennies, I'd have no car, a loan which I may or may not be able to pay off early and no deposit / cash for another car.RS 6 are glorious but! If circa £2,000 for excess mileage is an issue on the Golf the RS6 will cost you that in fuel let alone the PCP rate!
Oh, and £2k excess mileage isn't really the issue, I'm looking at best options. So is it better to pay the £2,000+ excess mileage at the end; have a car worth less than expected at the end or talk to VW and pay, £XX amount per month between now and the end of the contract.
Having had a lease before, it certainly worked out cheaper to have a 10,000 mile contract and pay excess mileage than it did to have a 15,000 contract. Go figure!
Well VW finance could’ve made the decision for me, in quite a bizarre way.
Letter arrived this morning saying based on recent mileage reading from last Service “you have exceeded your contracted mileage of 30,000 and as such, we’ve calculated the excess mileage charge and have enclosed an invoice”
Bizarre in many ways.
- contract mileage is 40,000 (10,000 p/a) and I’m 23 months into a 48 month contract.
- calculating the excess mileage now. When there’s 2 years to go, what do they expect, that I’ll park the car up for two years?
- no indication that I’ll get another letter after the next service or in 12 months or at any other point in the future.
- they’ve charged the rate at 4.8 pence per mile (inc VAT) when my contract says it’s 7.2 pence.
So I’ll be phoning VW Finance in Tuesday - these things always arrive when it’s a long weekend don’t they.
Letter arrived this morning saying based on recent mileage reading from last Service “you have exceeded your contracted mileage of 30,000 and as such, we’ve calculated the excess mileage charge and have enclosed an invoice”
Bizarre in many ways.
- contract mileage is 40,000 (10,000 p/a) and I’m 23 months into a 48 month contract.
- calculating the excess mileage now. When there’s 2 years to go, what do they expect, that I’ll park the car up for two years?
- no indication that I’ll get another letter after the next service or in 12 months or at any other point in the future.
- they’ve charged the rate at 4.8 pence per mile (inc VAT) when my contract says it’s 7.2 pence.
So I’ll be phoning VW Finance in Tuesday - these things always arrive when it’s a long weekend don’t they.
We exceeded the mileage by a fair margin on the OH's juke.
We bought the car from the finance company as the mileage charge Vs the equity it made a lot more sense to buy it and carry on without any further mileage concerns.
I'd suggest at your mileage you do the same and run it until you decide to change. That's if you can get a sensible loan to do so.
We bought the car from the finance company as the mileage charge Vs the equity it made a lot more sense to buy it and carry on without any further mileage concerns.
I'd suggest at your mileage you do the same and run it until you decide to change. That's if you can get a sensible loan to do so.
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