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First time car finance/PCP



  • Registered Users Posts: 1,053 ✭✭✭ BnB

    Buddy Bubs wrote: »
    I got a pcp quote for an audi a6 before Christmas. Car was 60k euro. Pcp breaks into 3 parts, roughly equal in my case. Deposit could be smaller as mine was max allowed but if you do that the monthlies increase.

    Offered 20k for my own 6 year old a6 which would be deposit.

    550 euro a month or something like that for 36 months which is about 22000

    20000 odd still owing at end of 3 years

    So....I'd have to give my perfectly good fully paid for car as a deposit

    Pay 550 a month

    Still owe 20k

    The headline grabber is the brand new a6 for 550 a month, a bargain some might think

    But if you break it down, an a6 would cost 3 times that to pay back over 36 months in reality
    If I went into that, there's very little chance of me stumping up 20k in 3 years time to buy out a car I had been driving for 3 years and probably a bit bored of at that stage. No, I'd be nearly certainly refinance and get a new one...the cycle continues indefinitely.

    That's how pcp works, adjust your figures accordingly. I'm not saying anything for or against pcp, it does suit a lot of people.

    But just be sure you understand exactly how it goes and make your decision. For some, 550 a month forever (or 200,300,400, whatever) on a new car replaced every 3 years is great, others not so much.

    I think that's a very good summation of it.

    In 3 years time - You will have (just wild guesstimate) €20k Equity. i.e. You will owe VW Bank €20k for a car that's worth €40k....

    So it becomes so so painless, to just....Use that €20k equity as the deposit for your next 3 Year PCP, continue paying the same monthly amount, and get another new car.

    If you are someone who likes to have a new car (like my wife), then it is possibly one of the most efficient ways of doing so. (The madness of buying a new car every 3 years and taking the massive hit on depreciation every time is a separate conversation...!!!!)

    I have to say though, in fairness to VW, the Zero % APR that they do on a lot of deals, does make it pretty good value. You really are just spreading out the cost of 3 years depreciation across 3 years without anything added on. When we bought my wife's first VW on PCP a few years ago, it was a toss up between a Passat and an X-Trail. Both had similar base prices and Nissan were actually giving us a better trade in on her old banger, but VW just blew them out of the water on the monthly cost with the 0% APR Vs Nissan's that was done through AIB. As far as I remember, it was about 120 a month of a difference.