Purchase options, please advise

[Duc959]

Hi all, new to the forum and I have been reading up on all the mk8 topics in this forum.

So, I am thinking about purchasing an R, however I would like to know how people have funded their cars as I am not sure what to do, in the past I have been leasing and the last car I bought was in 2010.

I have ready some getting a loan and paying it off while others may go down the PCP route. I looked at a loan and the monthly payments are quite high even on a 2.9% loan. A bit lost on why people have opted to get a loan??

DTD are definitely the best for a deal as the local AC garages are not willing to discount.

[evo1986]

Hi all, new to the forum and I have been reading up on all the mk8 topics in this forum.

So, I am thinking about purchasing an R, however I would like to know how people have funded their cars as I am not sure what to do, in the past I have been leasing and the last car I bought was in 2010.

I have ready some getting a loan and paying it off while others may go down the PCP route. I looked at a loan and the monthly payments are quite high even on a 2.9% loan. A bit lost on why people have opted to get a loan??

DTD are definitely the best for a deal as the local AC garages are not willing to discount.

Talking from experience on average 90% of new VW’s are financed using VW Solutions / PCP funding.

What you find is on a forum often people will say they paid cash for it just to act like the big man when in fact like I say 90% of new cars are initially purchased on PCP.

Some then settle the agreement because they have the funds to do it or they think taking a loan out settling gives them more freedom etc and I would say again from experience that equates to possibly 10% of people pay it off within 1 month of taking delivery.

That leaves 80% still on VW PCP.

Nationally now over 40% of people who purchase a car on VW PCP re-purchase another VW from the same supplying retailer. Never mind all the others that choose to buy from another VW retailer so VW retain a vast amount of there customers.

You have to take into account delivery times with prices at the moment. DTD granted are often if not always the cheapest but you eill be waiting I think 10-12 months for a car 

So if you are not in a rush to get a car and price is important then it’s a good option.

[fredgroves]

Bear in mind at the moment unless you find someone with a vehicle in stock, you won't be getting it for maybe almost a year....

If someone has stock you will pay at least RRP, maybe even more...

As for how to do it, largely that's ideological.... if you want the totally cheapest way of driving it for 2 or 3 years, lease it.

If you might want to buy it after 2-4 years, or swap in for another VW PCP it.

The most expensive way each month is to take out a loan on the whole price - because you are making payments against ~40k over say 4 years.

Cash purchase? Might seem good if you have a large amount of capital earning you nothing, but there is oppurtunity cost and cars are a depreciating asset.

[Exonian]

Welcome Mr Ducati 

You’ll probably hear lots of real world R owners opinions over on the R forum but you struck lucky landing here as evo1986 is the man with real figures to hand.
Bearing in mind 99.8% of Golfs sold are R’s there’ll be lots of info on their dedicated forum.

I’m a fairly atypical Golf buyer but have owned lots of them so am familiar with purchasing options.

Cash buying a new car - well I actually managed to achieve that once upon a time. God knows how. Must’ve been my monastic lifestyle. Finances are very different now, bloody kids!
So who pays cash for a car? Quite a few people seem to according to forums. There must be many financially astute people about.
Self employed people on a bit of a roll can be told by their accountant to lose some money into a car purchase for example so they can fiddle the taxes.
People with a relative who has pegged it who owned a house in the Home Counties bought for six shillings a few years ago find they’re suddenly millionaires. Instead of blowing it on a Lamborghini and Croatian hookers they buy a Golf R for cash and still get their books from the library.
Some people are just good at saving money.   

Personal loan. Well, from experience here as someone who used to modify their cars I preferred to own my own car so I could do what I liked to it without potentially upsetting a finance company who had a vested interest in it (read the small print boys and girls). Plus I’m a bit wishy washy with cars so if the wind changes direction I’ll drop a perfectly good one and go get another as I’ve got a different project in my mind. I’m a bit flaky with cars.
Personal loans work out best if you have a sizeable amount of cash in the car. They’re a top up. Say your new Golf R Performance is £40k after discounts. Your fully owned Ducati 959 is worth £15k, your T5 van is worth £20k and you have £5k of finance to pay off on your mid life crisis lifestyle statement van. So you need £10k to bridge the gap.
That’s where personal loans come good as you’ll pay not a massive amount of interest on £10k and technically fully own your shiny R.

PCP’s work best for those who don’t have a huge deposit and can afford £xxx a month. So long as you don’t look at how much interest you’re actually paying it’s fine. Or if you get a company car allowance it’s nirvana so long as you don’t get sacked for soliciting Croatian hookers during working hours.

Or as Fred says, get a lease if you’re happy with basic spec and won’t ever become attached to the hunk of tin.


Something like that anyway. 

[king monkey]

Some great replies here as usual. How you decide to finance your car is so dependent on your personal circumstances. I’ve mostly used PCP but used a personal loan to buy my R. I’ll do the same for the CS45: take the finance and pay it off with a loan. It means I borrow the back over a longer period but the interest is always less so I’m happy. I did quite a bit of research beforehand, looking at used car prices to try to maximise my chances of having equity in the car. Even without the current craziness I would have had equity in the car plus the initial money I put in it. Everyone has their own way of justifying it but only one way matters really: yours. Good luck!!

[Exonian]

How did you find the personal loan stacked against the PCP Michele?

Where’s Monkeyhanger?

[king monkey]

How did you find the personal loan stacked against the PCP Michele?

Where’s Monkeyhanger?

Not got the exact figures (great eh!) but it was all about the interest I saved, which was quite significant over the period of the loan. My R was financed over 6 years but I viewed it like a pcp where if I wanted to keep it, I’d have to get a 3/4 year loan to pay it off so 6 years would actually be shorter. I’m sure that wasn’t very helpful Andy!

[monkeyhanger]

How did you find the personal loan stacked against the PCP Michele?

Where’s Monkeyhanger?

Did someone say Beetlejuice?

I think most people on this forum are money savvy to an extent - even if they need to take out a PCP, they'll have got a deal pretty close to DTD prices and avoided the car salesperson's attempts to get you to buy lifeshine or GAP or wheel insurance. So although maybe 90% of the general public take and maintain a PCP  I'd expect the number to be a lot lower here.

If you have the readies, buying cash rather than earning a pittance on your savings almost always trumps even an exceptional lease deal. Additing a few options usually adds a lot to a lease as you're usually paying 100% of the cost of those options over 2 or 3 years.

A good lease deal usually beats PCP, unless you're adding a lot of options, then the cost of those options really beefs up the lease payments.

I "pay cash*" now, it saves a lot vs PCP - where about a third of your payments are interest. The relatively high residuals of the performance VWs means that you're always paying a lot of interest because you'll always owe a lot of capital throughout the PCP term, and 6% APR or thereabouts isn't  competitive for someone with a half decent credit rating.

*I say pay cash, but if there's a deposit contribution I'll do PCP and withdraw from the finance agreement within 14 days to retain that deposit contribution.

Even if you're not a cash buyer, you can use this approach and then take out a loan at 2.5 - 3% APR.

To best emulate PCP terms where you're only ever financing the depreciation + interest, you're best off taking out a 5 year loan and changing the car at 3 years, where you'll end up owing less than the GFV that the PCP would've had.

I always try to avoid options on a car that's already well equipped, it's usually dead money with the exception of metallic paint or swapping out the standard wheels if they're hideous e.g. Cadiz vs prets on the MK7 R.

That worked out very well for me with my 2015 Golf R which was standard apart from Lapiz paint and Prets. Pret equipped Rs were going g for an easy grand more than red or white lease specials with Cadiz, so I got all my money back on my Prets spend. Going crazy on the options can easily turn a £400pm car into a £600pm car.

Buying at a strong discount and selling to a performance car specialist saw me lose just £10700 over 46 months - a net £233pm in the time I had it - that's cheap motoring!

Buying cash or via personal loan does give you a lot more freedom to offload your car - plenty of places to sell your car to for significantly more than a P/X will get you (Pulmans offered me £15500 for the R, Lookers £14750, the place I sold it to gave me £17300).

Plenty of food for thought there!

[Exonian]

Not got the exact figures (great eh!) but it was all about the interest I saved, which was quite significant over the period of the loan. My R was financed over 6 years but I viewed it like a pcp where if I wanted to keep it, I’d have to get a 3/4 year loan to pay it off so 6 years would actually be shorter. I’m sure that wasn’t very helpful Andy!

We definitely don’t want exact figures, that stuff is very private.
Interested as to how it works out as a rough guide as I’m rubbish at maths! As a newbie to PCP I’m looking at the longer term overall interest costs, plus my son’s PCP is up soon and he needs to sort out whether he’s keeping the car or getting another.


********

Missed a trick there MH to sway us towards ID.3’s!!

[monkeyhanger]

Missed a trick there MH to sway us towards ID.3’s!!

It's a different driving experience to a GTI though. As nimble as a GTD, same performance, pennies to run if you do most of your charging from home. If they stuck sports seats in it, I bet more people would be tempted from here.

I think I was quite fortunate with my timing, there was a bit of stock floating around  (no great wait) and I benefited from the inflated used prices when selling the Polo GTIs, and the Mega bargain Family edition I got was the result of the Government's shock decision to reduce grant threshold to £35k and reduce the actual grant from £3000 to £2500. Overnight following the Government's decision, those cars became £3k dearer until VW reduced Family's RRP to below £35k. By that time there had been a lot of cancelled orders and stock floating around heavily discounted. It was the perfect storm for me as a buyer. The Life spec is now marginally cheaper on DTD than I paid for our first ID3, but doesn't come close to the deal on our Family spec.

I think most people chopping in now will get a great p/x value, but will be paying close to RRP for an in stock car or face an epic wait for a new order.