Finance??

[winrya]

We have a gti and cooper s with one personal loan for both of them.  Its for £10k but the cars combined are worth £21k, the rest was paid for with cash.  I've no problem with loans, but when you get to the point where you have a loan for 20k and a car worth less, its a bad position to be in.  I class mine as manageable debt in that if i couldn't afford to pay for the cars, selling would easily leave me in pocket and not with a car gone and a loan for depreciation.

[ub7rm]

  I class mine as manageable debt in that if i couldn't afford to pay for the cars, selling would easily leave me in pocket and not with a car gone and a loan for depreciation.

And just for anyone who isn't aware, this is one of the major differences between car finance and a personal loan.  The car finance is attached to the car - so negative equity or not you can hand the car back to the finance co and be done with it should the brown stuff hit the fan.  Not so with a personal loan.

That said there is a minimum time you have to have paid the finance back for before you can hand it back.

[DanoGTI]

However, be VERY aware that despite what is lauded about being able to give the car back on finance (usually allowed after 40% of the debt has been paid off, BUT it does vary), whilst it is illegal for the finance companies to affect your credit rating this way, they will make it known that you've given the car back.

You'll probably still get finance (as is allowed), but don't expect competitive rates.

I've looked into this quite deeply and spoken to some "in-the-know" people and therefore (IMHO) think the PCP route is the safest, as you get to give the car back.


FWIW, the type of deal I've been quoted for the PCP is roughly £100 per £10K you borrow (this is from my local dealership - who STILL haven't returned my call after 2.5 weeks - sign of things to come maybe?)

Dan

[ifti]

How can some of your guys pay £4-500 per month??
Are you living with parents etc?
I know for a fact, with a mortgage, bills, and a family to feed, I dont think I would want to commit £500 per month on a car even if I could!

[ub7rm]

In my case I pay about £310 a month for three years, after which the car is mine.  I just went for a plain old HP agreement.

Mines was three years old when I bought it and when I was looking into the financing it didn't escape my notice that for the same monthly outlay (or as near as damnit) I could have a brand new GTI on PCP, plus the baloon payment of course.  And though I discounted it at the time I think an R32 was slightly cheaper (due to better future residuals I presume  ).  The problem was that I just couldn't sit comfortably with the idea of shelling out all that money every month and not actualy having anything to show for it at the end of the three years.

The places that gave you the best monthly rates gave the highest residual value  - so presumably this meant that if you went to trade it in you would have a crap deposit to carry forward?  And vice versa too, places with pricier monthlys gave a lower residual value but I'm guessing with this you have a better chance of getting a decent deposit for the next motor? 

I'd appreciate peoples experience on this good and bad, do the dealers generally swing it so you have enough to get you into the latest model come change time regardless 

This GTI was a bit of an impulse buy and I didn't really do enough research on the realities of PCP, it might be the weapon of choice come Mk6 GTI / R?? time 

[DanoGTI]

I know what you mean about the PCP, but in my eyes, say you're looking at circa £250/month for 3yrs. That's £9000 excluding any deposit regardless of how much the car is. Ideally the balloon payment will be covered by what the car is still worth.

Personally, a car is an expense that I don't think justifies a deposit. After all, after the 3 years, you'd probably be getting shot of it anyway!!LOL!!

Just as food for thought though, say you pocket an additional £50/month for the same duration (£1800), making your total outgoing for the "car" £300.
At the end of your PCP agreement, you give the car back. MAYBE a slight little deposit, but you do have £1800 put to one side should the need arise to augment the deal

Of course, on PCP, the car isn't actually yours. So mods etc must be temporary and removed afterwards. Personally, I'll be changing the ICE and the exhaust - both removable items

Swings and roundabouts.

Dan

[AlanD]

£0 deposit - £322 a month + final balloon payment after 3 years.

I have however paid the car off now and got an early settlement figure. Saved myself 3k on interest

[Anil]

hi anil firstly are you thinking of buying new or used ? and what are you thinking of buying ie normal gti or ltd edition etc???
this is the way i went around buying my 56 plate 3 door silver gti with 30k on clock, 1 owner, full vw service etc and a few extras ie sound upgrade, gti mats etc stunning condition all round
bought car in jan 2009 from dealer in chester for just short of 11k, paid £500 deposit and 40 monthly payments of £225 and then a final payment of around £3500,
Hope this helps matey oh and 1 more thing only a fool buys brand new atleast go 1 year old in my oppinion unless you have cash to burn lol

Cheers guys for all your replies, i appreciate it alot as its giving me an idea of what to expect. Ok basically im considering a used GTI T, Black, around a 55 plate, anything costing around 10-11k, Im considering part exing my car, hopefully i can get around £2k for it, i have saved up £1k already and will try and save up a further £1k over the next 2months, so that leaves me with upto a £4k deposit. I admit i am probably going out of my depths if i take this route as my job isnt always full time and i am sometimes very bad at saving money, however i had very poor credit rating and i have slowly improved back to average. Ive worked out that if i want to take finance i could probably afford around £150-£250 p/m and thats if i behave myself and stay away from bars, pubs, fast food, and no more late night cruising or anything to burn petrol etc etc. I was deciding between a MK2 GTI as a small project for ED38, a MK5 GT TDI because theyre cheaper and as standard are similar to a MK4 gti, but then gradually i kept finidng myself looking at MK5 GTI's, and i love MK5 GTI's, they have a different presence to anything else, and whenever you see one it never looks sh*t from any angle. ALso if any can tell me, which is better for interest rates... taking finance from the actual vw dealership or used car dealer e.g cargiant, average high street dealer?

[matthewsimone]

hi anil interest rates are a bit of a saw point at the moment lol but id say the vw finance is probably the cheaper idea rather than cargiant or similar and with the 1k you have already and the 2k part ex on your current car if you bought a 11k car i rekon it be around £200 a month over 3 years and a final payment of around 1k - 2k, as i said my 2006 gti was just short of 11k and paid £500 deposit plus £220 amonth for 40 months with final payment of 3k ish

[Anil]

hi anil interest rates are a bit of a saw point at the moment lol but id say the vw finance is probably the cheaper idea rather than cargiant or similar and with the 1k you have already and the 2k part ex on your current car if you bought a 11k car i rekon it be around £200 a month over 3 years and a final payment of around 1k - 2k, as i said my 2006 gti was just short of 11k and paid £500 deposit plus £220 amonth for 40 months with final payment of 3k ish

i was guessing interest rates would be slightly higher than usual. however the next doubt i have is if i choose to opt for a 5 year finance option im definitely expecting to pay more back, but im in two minds what to do as im currently looking for a new job in order to fund a mortgage (in near future) for myself and as stated before if the brown stuff hits the fan id rather lose the car than a house, and me being very careless with money at times i dare not risk missing repayments. I could go for something else cheaper like a gt tdi but its not the same and the way i see it is if im commiting 3-5 years of repayments i might aswell go for the car i want as im planning on my next car being the one i stick with for a long time untill im settled and comfortable enough to afford something else.