PCP deal, a deal?

[Mk1Macca]

GTI DSG 5Dr
Indium grey
Keyless
Climate screen
90% tinted rear glass

£26,488.21 (inc VW deposit)
£5,000 customer deposit
47 x @289.95
GMFV £10,957
4.9% APR
13K miles pa

How does that look to our forum and finance experts? Is there a better way to do this? Trying to keep the monthlies under £300.

[Briggsy]

The rate is what VW offer so it's not so much about the pcp and more about the price of the car itself which is good.

[Guzzle]

As far as PCP goes, this looks OK as long as there are no hidden admin charges they haven't made clear. I'm guessing that from the interest rate and the price that this is a quote via Drive The Deal from a VW dealer.

Whether this is the best way of financing this car depends very much on your own personal circumstances and what your intentions are at the end of the term. What is right for you might not be right for the next person.

Broadly speaking PCP gives you 3 basic options at the end of the term.
1) Hand the vehicle back and walk away.
2) Trade the vehicle in and any value over and above the GMFV (if there is any) can be used as a deposit on another vehicle.
3) Pay the final payment and keep the vehicle.

There are other ways of doing this, however which is best will depend on your resources, your credit history and your attitude to risk.

Historically buying outright with cash often worked out cheapest overall. This is not necessarily the case any more though, as in the case of this deal you will need to take out a finance agreement to get the £1000 deposit contribution. You can pay off the finance though and keep the deposit contribution, either with cash from your savings or by taking out a loan at a lower interest rate if you can find one. However if you need to keep your monthly payments low then the loan would need to be taken out over a longer period and then paid off early to emulate the effect of the balloon payment at the end of the PCP. You would need to ensure there are no penalties in the loan agreement though for early settlement.

The other option is personal leasing. However the special offers that were on recently have disappeared for the time being, making it difficult to get the payments below your £300 target. I would not advocate leasing over a 4 year term though as you could run into maintenance and repair (outside warranty) issues in the final year, and the savings for doing so compared to a 3 year or even a 2 year term can be minimal.

[davyk31]

I would look at leasing as the deposit will be a lot lower and monthly within budget. You may get some of your 5k PCP deposit back at sale time but it's unlikely I reckon.

[monsta]

Hi Macca 

Mine is coming to the end of a 4 year PCP deal at the beginning of December.  Been paying a princely £385 per month since 2013 and I think I stuck 4k in at the beginning.

Looking around at other cars, trade in for my 4 year old GTI performance pack (dynaudio, adaptive chassis, pan roof) is worth £11,500 trade in.

I put it up on Auto Trader and people are willing to pay £15k for it.

Settlement figure currently stands at £13k so trade in is a joke, might as well hand it back to VW than put the difference on top of a new finance agreement.

At Xmas my settlement is 10k, probably going to finance that via a loan and aim to own it outright in another 2 years.

Dealer advice was to hold onto it until the end of the agreement but he did say the more deposit you stick in the less of a good deal PCP is.

Is this one for Mrs macca or have you got bored of the BMW already?

[Guzzle]

Unless you are set on PCP this is not a bad lease deal. It's not as good as the short lived deals from the beginning of month, but still seems quite reasonable;-

http://uchoosecontracts.co.uk/volkswagen_golf_gti_new_2.0_tsi_230_dsg_5_door_personal#tabQUOTE-tab

You will probably need to add on about £30 or so per month to cover the options, but the deposit will be lower even though the term is shorter.