Anyone gone for 4 Year PCP?

[Neil_MK]

Don't forget you're still paying the 6.2% finance on the deferred amount too

[Thornster]

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.

As per Neil_MK post above this wouldn't make any difference, as you will be paying 6.2% on the entire balance, including the GFV sum, so increasing or lowering the GFV doesn't really benifit the dealer in that regard.

Also i thought the GFV was dictated by VW finance (not the specific dealer), so it would be the same irrespective of the dealer used...

Have you got written quotes for the different GFVs (from VW Finance)?

[matchboy]

Also i thought the GFV was dictated by VW finance (not the specific dealer), so it would be the same irrespective of the dealer used...

This is correct, or at least it was when I ordered mine - the GFV was fixed by VW Finance and it couldn't be adjusted by the dealer (I could see his screen).

[monkeyhanger]

I have overpayed before, seeing my GFV figure drop as a result. I'm used to paying out £410 a month for my car and if the finance comes in at £300 a month with £2500 down and £14400 GFV then I overpay by £110 a month and have less to pay at the end (or greater collateral against the next one). The GFV drops not because the car will be worth less but because I will owe less on it. The true non-overpaying GFV quoted is a representation of the actual 3 year old value (albeit a cautious/worst case scenario one). GFV for base GTI is 51%, base GTD is 56%, actual true p/x values at 3 years old (if nothing untoward happens to the used car market in the meantime) is likely to be more, like 55% for a GTI and 60% for a GTD. Of course the GFV as a % will suffer the more toys you add on, seing as they hardly hold any value at all. A base 5 door manual GTD with £14400 GFV (56% retained) or a GTD with £3k of extras with a GFV of £14800 (51% retained).

In either case, GFV should not reduce just because you got a discount, that would mean that any discount you get is meaningless. Make sure your GFV is worked out on the list price and not the price you bought it.

[matchboy]

I have overpayed before, seeing my GFV figure drop as a result. I'm used to paying out £410 a month for my car and if the finance comes in at £300 a month with £2500 down and £14400 GFV then I overpay by £110 a month and have less to pay at the end (or greater collateral against the next one). The GFV drops not because the car will be worth less but because I will owe less on it. The true non-overpaying GFV quoted is a representation of the actual 3 year old value (albeit a cautious/worst case scenario one). GFV for base GTI is 51%, base GTD is 56%, actual true p/x values at 3 years old (if nothing untoward happens to the used car market in the meantime) is likely to be more, like 55% for a GTI and 60% for a GTD. Of course the GFV as a % will suffer the more toys you add on, seing as they hardly hold any value at all. A base 5 door manual GTD with £14400 GFV (56% retained) or a GTD with £3k of extras with a GFV of £14800 (51% retained).

In either case, GFV should not reduce just because you got a discount, that would mean that any discount you get is meaningless. Make sure your GFV is worked out on the list price and not the price you bought it.

Although the options won't see you a return, say, if you return the car to VW to then move onto your next car, its worth considering that a loaded car if you sell it privately to pay off the final balloon payment may return you more and therefore you will have more deposit for your next vehicle.  That's if you can be bothered to sell it privately of course!

Incidentally, I sold my mk 5 GTI privately and it was a good couple of thousand pounds more than the dealer would give me in excess of the GFV, and therefore gave me a bigger deposit for my mk 6.

[monkeyhanger]

Although the options won't see you a return, say, if you return the car to VW to then move onto your next car, its worth considering that a loaded car if you sell it privately to pay off the final balloon payment may return you more and therefore you will have more deposit for your next vehicle.  That's if you can be bothered to sell it privately of course!

Incidentally, I sold my mk 5 GTI privately and it was a good couple of thousand pounds more than the dealer would give me in excess of the GFV, and therefore gave me a bigger deposit for my mk 6.

It is a lot of hassle selling a car privately in excess of £10k. People start to think of that as a lot of money for a car and generally look for the reassurance of a dealership rather than a private sale and access to finance etc.

If you can get a private sale then that's great, but all too often you put a car up for sale that’s maybe worth £15k and every month have to reduce it as it’s depreciating by about £250 a month (ssen it happen a lot on the Scirocco forums when people are changing cars.

Avoiding the hassle of potentially being without a car for months or not getting rid of it before the new one arrives can’t be underestimated either.

I was offered £15500 for my Scirocco as p/x at the end of March, I’d probably struggle to get that privately now and would have no chance of achieving it in a private sale come September.

A comprehensive list of extras does help the private sale go a bit smoother but either way it’s a lot of hassle compared to getting a good p/x

[RobS23GTI]

There's no way I will keep the car for 4 years so the GFV is essentially irrelevant, outside of paying a few pounds per month more maybe either way.

I just found it strange that the GFV varied between dealers, obviously no one else has experienced this and I do have written quotes.

When I sign up for the finance, ill query whether list or list less discount was used.

[RobS23GTI]

I agree 100% on selling cars privately over £10k as well, not many people have cash readily available to that extent.

I will have to sell the Mk6 GTD privately, the dealer offers were between £10250 & £11500 and a good example is still going for around £14-£15k so not willing to lose that much.

[dubber36]

As I see it, taking out a 4 year PCP and therefore reducing the monthly payments will mean that you are not paying the debt off as quickly. If for what ever reason you need to get out of the car after 2 years into a 4 year deal, you may not have paid off enough money to come out with any meaningful equity.

[Thornster]

It's a difficult one.

On one hand I know I'll be looking at other cars (Golf R) in three years, but on the other I remember thinking I'd have happily kept my Mk4 25th Anniversary GTI for another year at the time (if it hadn't done 111,000 miles).

I'm already know I'm going to love the GTI after 7 years of diesels (please don't take offence GTD'ers), and think I'll be seriously looking at the GTI Edition 40 in 2017!
I'm now wondering if I need to factor in the likely summer 2017 release of the GTI Edition 40 into my PCP term (i.e. 42 to 48 months)!