Anyone gone for 4 Year PCP?

[AAddict]

Wondering if anyone has gone for the option of a 4 year PCP instead of the more usual 3 year? Was the payment higher/lower/same? Same APR etc?

Lets not turn this into a "Other finance is cheaper than VW" or "I only pay cash for my cars" thread 

[monkeyhanger]

Wondering if anyone has gone for the option of a 4 year PCP instead of the more usual 3 year? Was the payment higher/lower/same? Same APR etc?

Lets not turn this into a "Other finance is cheaper than VW" or "I only pay cash for my cars" thread 

The monthly payment will be a little lower, but the APR rate will be the same and therefore you'll be paying more interest (assuming you are staying with VW finance). With VW finance they always make a canny wedge on the interest because the only capital reducing on your repayments is the depreciation. There aren't many loans out there where 3 years into a loan you still owe 55% of what is borrowed (GFV) and are therefore paying interest on over half the initial amount borrowed even at the end of year 3. High residual values on a Golf are a big money maker for VW finance.

[RobS23GTI]

Yeah I went for the 4 year PCP @ 6.2%, monthly repayment was around £50 less, but GFV was only £10k (partly because of the discount I managed to get off list price).
Not an issue though as I haven't kept a car for more than 18 months so I just wanted monthly repayment as low as possible.

[Thornster]

Yeah I went for the 4 year PCP @ 6.2%, monthly repayment was around £50 less, but GFV was only £10k (partly because of the discount I managed to get off list price).
Not an issue though as I haven't kept a car for more than 18 months so I just wanted monthly repayment as low as possible.

GFV is not related to any discount you may have secured (rather a percentage of the cars list price at a point in time, dependant only on mileage), but it will drop for the additional 12 months of depreciation (36 vs 48) and is obviously mileage dependant.

The finance will be less, but don't forget to factor in potential increased running costs (dependant on your mileage profile) such as another set of tyres / rear tyres, another Service, extended warranty, MOT etc... when looking at the total monthly saving.

The monthly saving for me is around £20...but this would pay for the Performance Pack...

[RobS23GTI]

Yes I thought the same as well, but I did various quotes based on the same options & mileage with different dealers and they were all different GFV, so the only variable is discount...

[Bill_the_Bear]

Yes I thought the same as well, but I did various quotes based on the same options & mileage with different dealers and they were all different GFV, so the only variable is discount...

I suppose they might have used the discount price rather than the list price, but this would make no sense logically so very strange if they have done.  This was always for an identical car same spec and everything right?

[KyleB]

I'm tempted to enquire about it over 4 years just to bring the monthly figure down.

[matchboy]

I'm tempted to enquire about it over 4 years just to bring the monthly figure down.

Me too, but then after 3 years I know I'll be certainly ready for a new car so I think I'll stay on 3 years.

[KyleB]

I'm tempted to enquire about it over 4 years just to bring the monthly figure down.

Me too, but then after 3 years I know I'll be certainly ready for a new car so I think I'll stay on 3 years.

Yeah that is definitely a point!

[RobS23GTI]

Yeah options were always the same. I work in finance so am pretty cute with stuff like this.

It does make sense from VW's point of view if you think about it...take 2 scenarios;

1. List price £27000, discount given - nil, GFV - £13000, so the balance to finance is £14000 @ 6.2%
2. List price £27000, discount given - £3000, GFV - £13000, so balance to finance is £11000 @ 6.2%

Effectively they are losing out on 6.2% interest for £3000 because of discount given.

However, if GFV is lowered based on list price less discount given, they can finance a larger amount therefore making more money.