Buying new - timings and PCP
Discussion
Hi all
Bought my first new car with PCP 2yrs ago with a 36 month deal.
Having just bought a new house the wife wants me to look at options to reduce my monthly costs so I got an early settlement figure on my car to see where I was.
As it stands the trade in value currently ranges between 5-7k over the settlement figure (good deal and decent deposit). So I have been looking into this as well as alternative cheaper cars which have thrown up the following queries:
1) Given the current settlement figure and trade In I was pleasantly surprised, however I am worried that over the final year this may change with Brexit worries, the car market etc however I also understand that in theory in a PCP any early settlement is bad on value as the final years are when values somewhat plateau and monthlies stay the same, so the actual 'equity' should in theory increase? is this right?
2) Audi finance - was looking at their cars as they gave me a good trade in price for mine, however it seems with PCP deals Audi do not let options factor into GFV/Optional Final Payment. They state it is always based on the entry price and options would simply increase p/ex value. Quite clever in a way but wondered if this is the norm across Audi or whether the dealer was trying it on?
3) New car buying timings - Audi and MB still have relatively high apr's and not many offers on, is there a time of the year when you start to see these? in the run up to Christmas perhaps? is now too close to Sept and new reg etc and so the market might be better for buyers later in the year?
Thanks
Bought my first new car with PCP 2yrs ago with a 36 month deal.
Having just bought a new house the wife wants me to look at options to reduce my monthly costs so I got an early settlement figure on my car to see where I was.
As it stands the trade in value currently ranges between 5-7k over the settlement figure (good deal and decent deposit). So I have been looking into this as well as alternative cheaper cars which have thrown up the following queries:
1) Given the current settlement figure and trade In I was pleasantly surprised, however I am worried that over the final year this may change with Brexit worries, the car market etc however I also understand that in theory in a PCP any early settlement is bad on value as the final years are when values somewhat plateau and monthlies stay the same, so the actual 'equity' should in theory increase? is this right?
2) Audi finance - was looking at their cars as they gave me a good trade in price for mine, however it seems with PCP deals Audi do not let options factor into GFV/Optional Final Payment. They state it is always based on the entry price and options would simply increase p/ex value. Quite clever in a way but wondered if this is the norm across Audi or whether the dealer was trying it on?
3) New car buying timings - Audi and MB still have relatively high apr's and not many offers on, is there a time of the year when you start to see these? in the run up to Christmas perhaps? is now too close to Sept and new reg etc and so the market might be better for buyers later in the year?
Thanks
If I'm understanding this correct (I don't PCP so not fully clued in), are you saying that you can give over and walk away with £6/7k cash?
If so, isn't the best thing -if the sole aim is to reduce your monthly payments - to then just go and buy a car outright for £6k and then you have no outgoings on car finance rather than set up another lease deal?
If so, isn't the best thing -if the sole aim is to reduce your monthly payments - to then just go and buy a car outright for £6k and then you have no outgoings on car finance rather than set up another lease deal?
pb8g09 said:
If I'm understanding this correct (I don't PCP so not fully clued in), are you saying that you can give over and walk away with £6/7k cash?
If so, isn't the best thing -if the sole aim is to reduce your monthly payments - to then just go and buy a car outright for £6k and then you have no outgoings on car finance rather than set up another lease deal?
Hi no it wouldn't work like that, I can trade car in for that price where then the dealer would pay off repayment and then use any equity as deposit on a new car. Any cash trade-in I would suspect would mean a much lesser offer.If so, isn't the best thing -if the sole aim is to reduce your monthly payments - to then just go and buy a car outright for £6k and then you have no outgoings on car finance rather than set up another lease deal?
Also not really interested in debating the PCP financial aspect, yes i could simply use savings to buy a cheap car outright and have no monthly payments but I set myself a monthly budget and like the PCP option as it works for me. I want to look at options to reduce my monthly payments, not remove them completely.
Whether or not this is a good deal depends on your deposit, you've only stated decent. If you put in 10k, you're losing an additional 3-4k over the monthlies you have paid to settle now. If you put in 2k, then you're 4-5k up and should bite their hand off.
I will add if that's the trade in value, you'll be able to get similar or more from WBAC / private sale and pay off the finance, you don't need to trade it in.
I will add if that's the trade in value, you'll be able to get similar or more from WBAC / private sale and pay off the finance, you don't need to trade it in.
jimmy_wrxsti said:
Hi no it wouldn't work like that, I can trade car in for that price where then the dealer would pay off repayment and then use any equity as deposit on a new car. Any cash trade-in I would suspect would mean a much lesser offer.
Also not really interested in debating the PCP financial aspect, yes i could simply use savings to buy a cheap car outright and have no monthly payments but I set myself a monthly budget and like the PCP option as it works for me. I want to look at options to reduce my monthly payments, not remove them completely.
That's fair enough then, thanks for explaining. Also not really interested in debating the PCP financial aspect, yes i could simply use savings to buy a cheap car outright and have no monthly payments but I set myself a monthly budget and like the PCP option as it works for me. I want to look at options to reduce my monthly payments, not remove them completely.
Depending on your mileage - but going on a typical annual allowance, then yes you'd probably expect the equity gap to increase greater in the 3rd year to your advantage. Could you look at your car on the Audi Approved Used and compare the difference in prices of the two ages/mileage combinations and use that as a base guide?
rsbmw said:
Whether or not this is a good deal depends on your deposit, you've only stated decent. If you put in 10k, you're losing an additional 3-4k over the monthlies you have paid to settle now. If you put in 2k, then you're 4-5k up and should bite their hand off.
I will add if that's the trade in value, you'll be able to get similar or more from WBAC / private sale and pay off the finance, you don't need to trade it in.
Yes deposit was 10k, however would I have not paid the same off in total regardless as the monthlies would have been higher if lower deposit and included interest?I will add if that's the trade in value, you'll be able to get similar or more from WBAC / private sale and pay off the finance, you don't need to trade it in.
Yes private sale would no doubt get more, haven't dismissed this notion but also aware people buying cars with finance still on them is not usually advised and for the value amount private sales are tricky (trade in values £38-£40k so private more). One aspect I am looking at is seeing through the full term and then buying it at the end via loan so own it outright.
pb8g09 said:
That's fair enough then, thanks for explaining.
Depending on your mileage - but going on a typical annual allowance, then yes you'd probably expect the equity gap to increase greater in the 3rd year to your advantage. Could you look at your car on the Audi Approved Used and compare the difference in prices of the two ages/mileage combinations and use that as a base guide?
Thanks - yes that's also what I expected. Although I am worried by the current market but would need crystal ball to know what's going to happen in next 12 months.Depending on your mileage - but going on a typical annual allowance, then yes you'd probably expect the equity gap to increase greater in the 3rd year to your advantage. Could you look at your car on the Audi Approved Used and compare the difference in prices of the two ages/mileage combinations and use that as a base guide?
With regards to Audi, the issue is that the lower GFV and increased cost with options means PCP wise the monthly costs are very high. I also don't like the idea of relying on Audi p/ex values at the end too - I am sure as most do when it comes to p/ex value that they suggest book price which doesn't take into account options! it is a good idea for Audi as covering their bases with such a low GFV but I was surprised as other dealers increase the GFV when the cost price goes up. Their APR is higher than most also, have contacted other Audi dealerships to see if same as only been in contact with 1 so far.
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