Scirocco :: Used Finance or New PCP

Danger781

Hey lads,

Did some car shopping today and went to see 4 VW Sciroccos - 2010, 2011, 2013 and 2016 - So have multiple price ranges I can look at. I'm having some trouble deciding between PCP and Financing a used car as the monthly rate is so similar..

I'll be trading in my 2005 Mini One (170k KM, New NCT, 6 months Tax). The prices I'm listening below are after trading in my car:


2010 Volkswagen SCIROCCO
€12,250 w/ €2500 trade in
91,000 km

€4250 up front
8000 loan from CU:
9.98% over 4 years: €203 / month

- No idea on warranty, not mentioned
- No test drive
- Awful MINI trade-in value

2011 Volkswagen SCIROCCO
€13,500 w/ €3200 Trade-in
74,030 km

€3500 up front
€10000 loan from CU:
9.98% over 4 years: €253 / month

- Few minor paintwork issues
- 6 month warranty only (Originally offered 3 month)

2013 (132) Volkswagen SCIROCCO
€19,000 w/ €3000 trade-in
42,200 KM

€4000 up front
€15,000 via Volkswagen bank:
5.9% over 4 years: €331 / month

+ Volkswagen Bank low interest rate
++ 2 year warranty

2016 (161) Volkswagen SCIROCCO
€27000 RRP
> 25% Desposit inc. €3000 Trade in: €6748.75 (3748.75 up front)
> Final payment €9988

€355 / month over 3 years

Thoughts on PCP:
My concern about the PCP finance option - You can pay a maximum of 30% deposit which is less than €10,000. The old car is meant to act as the deposit - But the 132 model I'm looking at is worth twice that amount. How does the 30% deposit come into play in 3 years time when my car will be worth much more than €10,000? Would it not make much more sense to go off and sell the Scirocco for €20,000, use half for a deposit on a new one, have another few months of the car paid off..

Thoughts in 132 model:
For €20 more per month I can get a new car every 3 years, instead of being stuck with this one..

grogi

Danger781 wrote: »

My concern about the PCP finance option - You can pay a maximum of 30% deposit which is less than €10,000. The old car is meant to act as the deposit - But the 132 model I'm looking at is worth twice that amount. How does the 30% deposit come into play in 3 years time when my car will be worth much more than €10,000? Would it not make much more sense to go off and sell the Scirocco for €20,000, use half for a deposit on a new one, have another few months of the car paid off..

You need to make the final payment and have some value left for the deposit. So if you sold it to the dealer for €20k, you would have 10k for the final payment and 10k left to start next PCP.

Thoughts in 132 model:
For €20 more per month I can get a new car every 3 years, instead of being stuck with this one..

Oh Lord...

Danger781

grogi wrote: »

You need to make the final payment and have some value left for the deposit. So if you sold it to the dealer for €20k, you would have 10k for the final payment and 10k left to start next PCP.

Aaah okay that makes sense now. Answer was right in front of me I just kept overlooking it. Thanks.

grogi wrote: »

Oh Lord...

Maybe that is a little short-sighted or naiive, but it's the way I'm looking at it. If I am going to have the same monthly payments why not opt for the newer model? I realise this option only really makes sense if you plan on changing the car every 3 years, otherwise you're stuck with the 10k balance left to pay.

Danger781

Went in to have a chat again with the dealer offering the 132 and he has knocked off an extra 1000 off the price plus my 3000 trade in brings the price to an even 18k. Means I will only be financing 13 or 14k which drops the monthly payments down to 325. I could probably finance less.

Also spoke to the same dealer about a 161 PCP finance deal. Because I was looking at new he said there was a bit more wiggle room on the trade in so he was able to offer me 3700. If I do a 25% deposit (About 3000 deposit after trade in) the monthly payments will be about 350 with a GFV of 9980 or so in 3 years.

bazz26

With PCP if you want to give the car back in 3 years time and take out another one then you need the car's trade in value to be greater than the GFV to cover the deposit for the next car in order to keep similar monthly payments.

It should also be noted that the current Scirocco has been around since 2009 and is coming to the end of it's production life in the next 12 months so in 3 years time you will be trading an old model which impacts resale value.

grogi

Danger781 wrote: »

Went in to have a chat again with the dealer offering the 132 and he has knocked off an extra 1000 off the price plus my 3000 trade in brings the price to an even 18k. Means I will only be financing 13 or 14k which drops the monthly payments down to 325. I could probably finance less.

Also spoke to the same dealer about a 161 PCP finance deal. Because I was looking at new he said there was a bit more wiggle room on the trade in so he was able to offer me 3700. If I do a 25% deposit (About 3000 deposit after trade in) the monthly payments will be about 350 with a GFV of 9980 or so in 3 years.

I just love the dealer's talk about trade-in... It is hilarious that the trade-in value changes if you're trading against different cars.



IMHO the 132 is too expensive, I'd try to get the new one, purchase extended 5-year warranty and keep it off after the end of the PCP for another two years - until the warranty runs out. During those two years you should be able to pay back the load on the €10k balance and even put some cache aside. You would also avoid any big repair bills (still on warranty) should a disaster strikes.

No pressure situation in 5 years will give you a lot of advantages... You might decide to change or not - and you'd be in better negotiating position than when you simply rolling a PCP over.

Personally I don't like VW, I don't trust that company at all - but if I wanted Scirocco, that's what I would do...

Danger781

grogi wrote: »

IMHO the 132 is too expensive

Seems reasonably priced when there is almost 9k difference in the price vs a new one. Doesn't seem any worse than other advertisements for the same year.

grogi wrote: »

No pressure situation in 5 years will give you a lot of advantages... You might decide to change or not - and you'd be in better negotiating position than when you simply rolling a PCP over

Why would I be in a better position? Surely I wouldn't be when the car is worth less..?

Toyotafanboi

132 seems the most logical.

Similar repayments to the 161 but no 10k baloon at the end. You still get a facelift model, fresh car but someone else has taken the big depreciation hit, if you are getting a main dealer 12 month warranty it'd be ideal.

In 3 years time you will own the 19k car outright and it will have approx €12k equity to do as you please, whereas with the 161 option you have to part with €10k just to keep it; unless you want to commit to even more finance.

grogi

Danger781 wrote: »

Seems reasonably priced when there is almost 9k difference in the price vs a new one. Doesn't seem any worse than other advertisements for the same year.

It is only my personal opinion, you're still entitled to yours.

New costs ~28k OTRP. OP already got €700 discount on it - so it goes down to €27k.
Pre-loved 132 is ~21k. Six grand difference - this makes 22% of discount for 2.5-year-old car.

It is not an adequate discount. Despite being a disguised Golf, it is still a curiosity - and those depreciate more... 2.5-year-old petrol curiosity has approximately 50-55% of the list price, could be sold for 60%, 65% tops to let the dealer make a profit. /Motorcheck gives me similar figures - €22k is what a a 132 Scirocco is worth, but 2.0TDi 140BHP with DSG (132 D 4957). One one like that is €34500 OTR... /

78% is just insane...

grogi

Toyotafanboi wrote: »

132 seems the most logical.

Similar repayments to the 161 but no 10k baloon at the end. You still get a facelift model, fresh car but someone else has taken the big depreciation hit, if you are getting a main dealer 12 month warranty it'd be ideal.

In 3 years time you will own the 19k car outright and it will have approx €12k equity to do as you please, whereas with the 161 option you have to part with €10k just to keep it; unless you want to commit to even more finance.

Don't forget the 132 finance calculations are done for 4 years financing!

I would rather pay the same money (3700 trade in, 4000 deposit, 27750 OTRP, 9988 GFV - gives a PCP paymenet of €329) for approximately year longer (take a 2-year loan to finance the baloon) and at every time have a car three years younger.

Danger781

If I fork an extra deposit up front for the 161 I can get my monthly payments down to 286. My initial deposit will be 8325.79 (30%) instead of the initial plan of 25%. This seems much more manageable than 349.86 per month. He was quoting me 5.9% but online says the new Scirocco gets 3.9%. This starting to look like the better option, but as mentioned above I am concerned how much my car would be worth in 2019 if I decided to re-do the PCP again. Probably would be worth my time to just keep the car.

Here is what I am struggling to understand:
I was quoted 324.24 per month to finance 14000 over 4 years at 5.9%. That doesn't add up at all.
324.24 x 48 = 15563.52 (+11.2%)
14000 + 5.9% = 14826
What am I missing?

grogi

Danger781 wrote: »

If I fork an extra deposit up front for the 161 I can get my monthly payments down to 286. My initial deposit will be 8325.79 (30%) instead of the initial plan of 25%. This seems much more manageable than 349.86 per month. He was quoting me 5.9% but online says the new Scirocco gets 3.9%. This starting to look like the better option, but as mentioned above I am concerned how much my car would be worth in 2019 if I decided to re-do the PCP again. Probably would be worth my time to just keep the car.

PCP is designed to trick you to rolling it over. Beat the system and keep the car for a bit more...

Here is what I am struggling to understand:
I was quoted 324.24 per month to finance 14000 over 4 years at 5.9%. That doesn't add up at all.
324.24 x 48 = 15563.52 (+11.2%)
14000 + 5.9% = 14826
What am I missing?

I am getting 327... The calculations sound ok. APR is what the credit costs each year...

MarkN

Danger781 wrote: »

If I fork an extra deposit up front for the 161 I can get my monthly payments down to 286. My initial deposit will be 8325.79 (30%) instead of the initial plan of 25%. This seems much more manageable than 349.86 per month. He was quoting me 5.9% but online says the new Scirocco gets 3.9%. This starting to look like the better option, but as mentioned above I am concerned how much my car would be worth in 2019 if I decided to re-do the PCP again. Probably would be worth my time to just keep the car.

Here is what I am struggling to understand:
I was quoted 324.24 per month to finance 14000 over 4 years at 5.9%. That doesn't add up at all.
324.24 x 48 = 15563.52 (+11.2%)
14000 + 5.9% = 14826
What am I missing?

Just remember if you put 30% in now you'll need 30% again in three years to keep the repayments the same. If that comes from the GFV, great, if not, you're now also putting more cash deposits into the car.