Deal or No Deal - advice please.

[Jonny2021]

Looking for your thoughts on my situation please:

I currently have a Mk7.5 GTi Performance Edition - 69 plate with 22K miles - PCP deal with a current settlement figure of £16K.
I ordered a Mk8 Clubsport in September 2021. Paid a £500 deposit and agreed a fixed part exchange on my car of £29K which has been confirmed as being honoured.
At that time in September 2021 my settlement figure was around £21K... so I've paid off a further £5K in the meantime due to the long wait for the new car and its likely that the physical car won't arrive until mid 2023 .. so on that basis a further £2K will be paid off, making the settlement figure be around £14K.

Question: Should I accept this as part and parcel of the order process or should I expect a reduction to my new monthly payments ?

One thing on my mind; I recall years ago, I part exchanged a Golf R32 for a Golf R's back in 2014 and the dealer had to give me some cash back because they said that the agreed part exchange price of the R32 was over 30% of the new purchase Golf R and their policy or something was that they could only accept up to 30% on a PCP which was something to do with avoiding money laundering in some shape of form - so I wonder if the same would apply and the more time I continue to wait for the Clubsport to arrive and pay off the settlement figure the more VW will have to give me back over and above the 30% !?!

So thinking of the numbers:
New Clubsport value at the time which is being honoured: £39K
Trade in value £29K of the existing PCP Golf GTi
Settlement figure at the time £21K for the existing GTi
Therefore a deposit of £8K (calculated: £29K dealership offer minus the £21K settlement figure)

Maximum 30% deposit on the Clubsport based on the purchase price of £39K would be £11,700

So the £8K deposit at the time would have been well within that.

Now... based on the arrival of the car mid 2023 and a settlement figure being around £14K
That would make the deposit £15K (calculated: £29K dealership offer minus the £14K settlement figure)

So ... would the dealership have to give me back the difference: £15K minus £11,700 = £3,300 !?!

Or would they consider reducing my monthly payments further and not giving a cash back.

I've not asked the dealership this directly as yet.....  but I will once I've had any thoughts from you guys and girls.

Cheers all and sorry for the long winded post.

Wishing you a happy new year in the meantime.

Cheers...... Jon
 

[Carlosfandango]

Your deal is based on the 8K deposit, all that has changed is the amount of residual value in your trade in, you can put down more deposit if you wish, but you’re not obliged to, they would just put the extra trade in cash in your bank account, you could think of it as your extra monthly payments being returned to some extent, if you choose to pay more deposit your monthly payments will be reduced accordingly.

[Exonian]

There is a maximum amount that VW will allow as a deposit on a PCP. The 30% you quote sounds about right. Audi and BMW used to allow a more sizeable deposit (I ran a quotes on various cars some years ago when interest rates were somewhat more palatable than current rates) relative to the overall car price than VW did, this may or may not still be the case.

Basically if you have more equity in your PX than when you signed for the purchase, the dealer can allow you to put in up to the maximum deposit VWFS will permit on the agreed PCP contract out of said equity, and will refund the rest to you in ‘cash’ via bank transfer as Carlosfandangio says.

[evo1986]

Was the part exchange value guaranteed or was the £8000 equity guaranteed???

To guarantee an actual PX price at that value seems madness, I can understand them guaranteeing the equity remains the same as they know your settlement is going to keep on coming down so as every month goes by they get your car a bit cheaper as it’s value normally desends….

[Jonny2021]

Was the part exchange value guaranteed or was the £8000 equity guaranteed???

To guarantee an actual PX price at that value seems madness, I can understand them guaranteeing the equity remains the same as they know your settlement is going to keep on coming down so as every month goes by they get your car a bit cheaper as it’s value normally descends….

They agreed the part exchange price... guaranteeing that it would be £29K.... as at the time WBAC (We Buy Any Car) was offering almost the same...
Obviously the market prices of second hand cars has gone down and back up again since and I was concerned that if the so called guaranteed price wasn't withheld I'd then lose out as I could have just sold the car back then to WBAC and had the cash in the bank, so I emailed my VW sales rep and he confirmed the part exchange price would be honoured.

If what the 2 previous comments suggests is true then I'm in a great position, as almost every penny of my monthly payment will now be returned to me when the transaction goes through.... result !

[Adam T7]

When my order was held up by the WLTP nonsense back in 2018 I got an email from the dealer guaranteeing  the trade in value - balance wasn’t PCP though.
Never queried the mileage either (only put a few hundred on it anyway)

[fredgroves]

My mk8 was a long time coming.

I kept paying the PCP, so the balance reduces (didn't have any choice - either that or settle in full - but the extra payments attracted no interest, so it was all just capital payments)

Garage gave me 20k for my old Golf, which I used to pay off the PCP (in fact the dealer paid the outstanding PCP settlement direct to VWFS) and then sent me the change.

Simples.