Anyone familiar with Audi PCP?

BensonWedges

I'm looking at buying a new A3 and I've been offered Audi's PCP option which works out like this:

Car value: £24,000
Deposit: £4,000
Part ex: £2,250
Credit: £17,750

In 4 years, they'll buy the car back at £11,000 guaranteed minimum, so really, the credit amount over the term is £6,750.

The repayment terms are 47 months at £327 per month which totals £15,369. Have I calculated something wrong or is this ridiculously expensive?

A friend of mine has a similar arrangement with Volkswagen where his credit over the term is £12,382.95 with 35 months of £357.37. This totals £12,507.95 which just seems right.

How else do you work these things out?

BensonWedges

Just found an Audi PDF file on their website that says I should be paying my deposit + the difference between the amount outstanding and the buy back amount (i.e. the credit over the term) divided into equal monthly payments.

I make that £6,750 / 47 = £143.61. So where do they get £327 from!?

And there's no mention of any interest here which is supposedly 6.1%.

Can anyone shed any light?

anotherbaldrick

check if the PCP has a mileage limit , say 10000 miles per year, If you are not happy you could abide by this be aware that excess miles will severely hit the buy back price.

BensonWedges

They've assumed 8,000 miles per year (I normally do about 6,000) and thats taken into account in the £11k buy back figure.

Never done a PCP arrangement before and really confused.

TradePro

Something isn't right, I think the payments should be around £215 @ 6%.

I personally think £24k for an A3 is mental, though I do dislike VAG products generally.

flashg67

Interest is calculated/payable on the full amount of credit?

motorguy

flashg67 wrote: »

Interest is calculated/payable on the full amount of credit?

^^^^^^^^

This. Interest is on the full amount, not just on the bit you're paying back.

albionrovers

I never understand this PCP lark.

Why pay 4K deposit when you can have a personal lease for 3 payments down and 35 monthly payments of about £280 before handing the car back? Then get another one? I'm deffo missing something here.

victor2

From Audi's "Finance Information" under Personal Contract Purchase:

The manufacturer will forecast the future value of the car you've chosen and this is known as the Guaranteed Future Value or GFV. The GFV is the minimum value you can expect your car to be worth at the end of the PCP agreement, provided it is within the agreed mileage and in good general condition.

The little provision at the end there is what will kill you. There is no guarantee on what they'll pay you, every little stone chip will be a deduction on that stated value.
However, they will probably offer you a reasonable trade in value against another car on PCP at the end, as you'll already be marked as a sucker for their finance.

Ozzy89

You are paying interest as part of the deal, the real cost of the purchase is well in excess of 27k. Avoid buying cars directly from manufactures, try third party dealers for example lingscars.

gilbert_and_sullivan

Agreed, just looked on Lingscars.

A3's depending on model vary from
£750 unrefundable deposit + 35monthly payments of £247 inc vat
to £1500 unrefundable deposit plus 35 monthlys @ £505.

Thats for 3 years @10k miles a year, you have to insure and service the car though.

You'll struggle to beat Lings prices for lease type deal.

Get yer calculator out.