PCP Vs Lease

mrsmortgage

motorguy said:

mrsmortgage said:

Herzlos said:

The VED will be factored into the lease too.

The MSE way would be to take the PCP for the incentives, drive home and then settle the finance with a bank loan for a much lower APR. 

Yes that's what I was thinking might be the most cost effective way to do things . 

What incentives are being offered via the PCP to take it out in the first place?

AFAIK no real incentives. They matched the lease prices and apparently that's good enough as leasing is always "cheaper"?  That was the "incentive" I got. 

mrsmortgage

@Grumpy_chap I really don't know how long I'd keep it. When I had my Volvo S40 I thought I'd keep if for 10+ years but it basically died after 4 years of ownership. 

Realistically in 4 years I won't have the need for a 7 seater anymore, so would be more than likely to size down. 

Grumpy_chap

There certainly are incentives for the Audi Q7 on PCP.  Even the first look on the Audi website shows deposit contribution £3.5k.  That's a reasonable "incentive".

What overall discount are you getting from the list price?  I shared details of one offer that is available as an example.

mrsmortgage

Ok looking into it....they're giving me a £6.5 OTR discount

mrsmortgage

Or 10% in other words. 

motorguy

Grumpy_chap said:

motorguy said:

mrsmortgage said:

Yes, that's right they seemed to imply that for the dealership it was a better deal to get a PCP over a lease. There the protection thingy, but I'd have to have paid 50% of it. With the original  deposit I was planning, it would take 38 months to reach that point 


The interest rate they're offering is 6.7% 

It means you have an exit from 37 months onwards with nothing more to pay, should your circumstances change.  

If really required, PCP offers an exit route from day 2. 

VT is very much a last resort even if early exit is required.

It does yes, because you can simply sell the asset.  But my comment was in relation to consumer rights protection specifically.

VT "should" be a last resort as thats what it was originally designed to be, however its a known exit strategy with little or no consequence.

Grumpy_chap

mrsmortgage said:

Or 10% in other words. 

Where have you shopped around?
Have you tried online brokers?
The offer that was sent to me as marketing was 15% - though a different configuration to your target.  FYI - that was DriveTheDeal.
You can't lose by trying various online brokers to stress-test the offer you have.

mrsmortgage

I've just been to my local Audi. Lovely man! I can't figure out what's the actual amount I'm paying interest on. According to my calculations, it should be around £26k... But I can't seem to get to that number in any way shape or form.  

DrEskimo

mrsmortgage said:

I've just been to my local Audi. Lovely man! I can't figure out what's the actual amount I'm paying interest on. According to my calculations, it should be around £26k... But I can't seem to get to that number in any way shape or form.  

You are borrowing £50,176.63, so you will be accruing interest on that amount. That includes the £31,706.25 final 'balloon payment'. Your payments don't go towards paying down that, but you still accrue interest on it over the full term 48month term.

In total, it's costing you £10,789 in just interest charges. That's what you will save by not using PCP and using cash instead.

It's all very well saying you don't want to sink £60k cash into a car, but borrowing money to buy it at a cost of £10,789 makes even less sense. There's simply no where you can get that sort of guaranteed return on your money.

The 'protection' it offers is utterly worthless in this case, as its value would have to drop below £20k before you actually made any economic gain. Show me a 4yr old Q7 with only 32k miles for <£20k and I'll bite your hand off for it....

 

Ibrahim5

I think when you are paying £72652 for a car it's unreasonable to charge a £10 fee for purchasing it