£36K best approach for finance

[Carn00b]

So found a very nice used Audi S5 I want for £36,000. I cannot / do not want to pay it all up front.

The best APR they can offer me over 4 years (they have said it is better to have a longer term to spread out the payments and I can change at any time) is about 8.4% and they seemingly won't budge.

I guess there are a few options in mind, but being a bit rubbish around car finance and probably not understanding all the mechanics, thought I would run by you guys for recommendations.

Here is what I am thinking are the options:

1 - Get the finance through Audi, deposit is around £3,000 with monthly payments at around £600 / 4 years
2 - Negotiate a finance deal with Audi + added perks and then settle the PCP within the first month and get a personal loan with low APR
3 - Online finance brokers for PCP - having done a search, this looks like a poor option.

Would really welcome some advice

[Muzzer79]

I was in a similar position recently

Unless the car is new, or you get a better discount, the benefits/perks of taking the finance from Audi are minimal.

I went for a bigger deposit and a low rate personal loan.

[Carn00b]

Muzzer79 said:

I was in a similar position recently

Unless the car is new, or you get a better discount, the benefits/perks of taking the finance from Audi are minimal.

I went for a bigger deposit and a low rate personal loan.

So you bought the car outright?

[anonymous-user]

Personal loan.

The “take a four year PCP to spread the payments out and you can change at any time” is absolute sales drone bks of the highest order. You just end up paying way more interest.

[Carn00b]

charltjr said:

Personal loan.

The “take a four year PCP to spread the payments out and you can change at any time” is absolute sales drone bks of the highest order. You just end up paying way more interest.

Yeah I thought that, even as someone wet behind the ears discussing car finance, it was odd.

I think best bet is see if I can negotiate anything off the price of the car and buy it outright using the loan.

[Driver101]

Carn00b said:

So found a very nice used Audi S5 I want for £36,000. I cannot / do not want to pay it all up front.

The best APR they can offer me over 4 years (they have said it is better to have a longer term to spread out the payments and I can change at any time) is about 8.4% and they seemingly won't budge.

I guess there are a few options in mind, but being a bit rubbish around car finance and probably not understanding all the mechanics, thought I would run by you guys for recommendations.

Here is what I am thinking are the options:

1 - Get the finance through Audi, deposit is around £3,000 with monthly payments at around £600 / 4 years
2 - Negotiate a finance deal with Audi + added perks and then settle the PCP within the first month and get a personal loan with low APR
3 - Online finance brokers for PCP - having done a search, this looks like a poor option.

Would really welcome some advice

Over £31k to PCP a £36k car?

That's mental.

[anonymous-user]

I was curious so quickly did the maths. A four year PCP on those terms will give you a total cost for the car of £43,800.

If your credit rating is good enough and you can put a £6k deposit in then finance the rest on a 30k personal loan at 3.3% APR over four and a half years you have the same monthly payment and stand to save around £5500 in interest.

Put another way, at the end of year four you’d owe £12k on the PCP and around £3500 on the personal loan. This is fairly rough back of a fag packet maths, so do check the numbers, but should be accurate enough for a quick illustration.

Used car PCP sucks ass unless the interest rate is low enough.

[mcg_]

cash, PX and loan gets my vote.

If taking PCP gets a better deal, do that and just pay it off the next day.

[Carn00b]

charltjr said:

I was curious so quickly did the maths. A four year PCP on those terms will give you a total cost for the car of £43,800.

If your credit rating is good enough and you can put a £6k deposit in then finance the rest on a 30k personal loan at 3.3% APR over four and a half years you have the same monthly payment and stand to save around £5500 in interest.

Put another way, at the end of year four you’d owe £12k on the PCP and around £3500 on the personal loan. This is fairly rough back of a fag packet maths, so do check the numbers, but should be accurate enough for a quick illustration.

Used car PCP sucks ass unless the interest rate is low enough.

Thanks mate! Was just doing some online loan calculations and should be able to get £30k at around 3% so yes far better than their finance.

It's a 66 plate which will be worth less in a few months time but it has nearly every option imaginable bar pano roof and only 6,000 miles so will see if they budge on price.

[Carn00b]

mcg_ said:

cash, PX and loan gets my vote.

If taking PCP gets a better deal, do that and just pay it off the next day.

Just trying to understand the premise behind how this works....

So they offer me a 4-year PCP with free servicing, gap insurance, paint protection, etc. etc. let's say at a daft APR %.

I accept, and then within the 14 day cooling off period, I pay the balance off.... say £33k if I put down £3K deposit, whilst retaining the added benefits....

Is that the loophole? Feels like they could/would rescind any benefits if you settled the finance in the cool off period and would there not be a fee to pay back early?

Seems a bit too easy?

[Carn00b]

Just spec'd the car aswell with the Audi configuration... 58K new

[ZX10R NIN]

Carn00b said:

Just trying to understand the premise behind how this works....

So they offer me a 4-year PCP with free servicing, gap insurance, paint protection, etc. etc. let's say at a daft APR %.

I accept, and then within the 14 day cooling off period, I pay the balance off.... say £33k if I put down £3K deposit, whilst retaining the added benefits....

Is that the loophole? Feels like they could/would rescind any benefits if you settled the finance in the cool off period and would there not be a fee to pay back early?

Seems a bit too easy?

Normally in order to keep the free servicing etc you need to keep the finance going for around 3 months then you get a personal loan & pay the lower rate APR.

[anonymous-user]

Carn00b said:

Just spec'd the car aswell with the Audi configuration... 58K new

Have you also calculated the depreciation? a 2 year old S5 is nowhere near the bottom of its depreciation, I would guess the cost of a £600 per month payment plus the depreciation will be another £450 per month?

Seems a lot to have a mildly interesting Audi and not the RS model.

2013 model is around £20k (new shape).

I would just use a loan, put a deposit down, take the finance and get a loan to cover the difference, what I always do.

[Danm1les]

A 4 year term is also fairly lengthy! Your situation might changed for better or for worse in 4 years so spending £600 on a car may not be as important. At least with a loan you can offload/change the car if required without any nasty fees.

[JaredVannett]

charltjr said:

Personal loan.

The “take a four year PCP to spread the payments out and you can change at any time” is absolute sales drone bks of the highest order. You just end up paying way more interest.

Seems OP was switched on, but makes you wonder how many poor suckers fall for that crap.

[33q]

ZX10R NIN said:

Normally in order to keep the free servicing etc you need to keep the finance going for around 3 months then you get a personal loan & pay the lower rate APR.

I've just paid off my Karoq PCP after 4 days....no loss of benefits....interest £13.32

[Muzzer79]

Carn00b said:

Muzzer79 said:

I was in a similar position recently

Unless the car is new, or you get a better discount, the benefits/perks of taking the finance from Audi are minimal.

I went for a bigger deposit and a low rate personal loan.

So you bought the car outright?

No, I laid a deposit and took a low rate personal loan.

[ZX10R NIN]

33q said:

ZX10R NIN said:

Normally in order to keep the free servicing etc you need to keep the finance going for around 3 months then you get a personal loan & pay the lower rate APR.

I've just paid off my Karoq PCP after 4 days....no loss of benefits....interest £13.32

It does depend per Manufacturer but good on you that's the smart way to do it.

[mcg_]

Carn00b said:

Just trying to understand the premise behind how this works....

So they offer me a 4-year PCP with free servicing, gap insurance, paint protection, etc. etc. let's say at a daft APR %.

I accept, and then within the 14 day cooling off period, I pay the balance off.... say £33k if I put down £3K deposit, whilst retaining the added benefits....

Is that the loophole? Feels like they could/would rescind any benefits if you settled the finance in the cool off period and would there not be a fee to pay back early?

Seems a bit too easy?

Hopefully! I bought my golf on pcp as it meant 2 free services. I waited for the service card to come through, then paid off the pcp. This was about a week after and about £20 in interest. Probably could have done it sooner to be fair.

If I don't get the free services, never mind.

I imagine that 95%+ of people who take out pcp just keep on pcp, so they're probably not too bothered?

[Carn00b]

So it’s £35,500 with gap paint protection and key

Or PCP over 4 years, £3000 deposit and payments of £425 a month. No extras.

It’s a 66 plate with 6k miles and loaded with just about every option in the individual grey colour.

Thoughts?