Quick PCP question

[AJ]

If I remember correctly when I was looking at the different monthly figures for my car, the GFV was pretty much set by the Finance Company depending on the number of miles I said I would do.

Once the GFV was fixed then the only thing that helped reduce or increase my monthly payments was the deposit that I was going to put down.

I used this pcp calculator to help me decide how much deposit I would put down PCP Calculator

 

[steve67]

the few quotes I've had , the dealer seems to add to the gfv to reduce monthly payments,
so say reducing a monthly payment of £257 to £249 by adding around £750 to the gfv , which is great but when i come to px in the future surely there will be less money in the car. this has been done by Audi, VW and Seat
i missing some thing? like i say i'm on a pcp but this is my first one so all this is new.i was lead to believe that i would jump into a new car every 2/3 years and more or less pay the same, that dosn't seem to be the case...

 

[rcopus]

No you're correct Steve, if theres no money left in the car when you want to change in a few years time you'll either a) put no deposit down on your next car, b) pony up some of your own cash to create a deposit.

If there's actually negative equity left in the car when you come to change, i.e. GFV is higher than what they're willing to pay for it in part-ex, I imagine you'd have to pay the difference.

I'm surprised to learn that the dealer can make the GFV up off the top of their heads though, very odd. It would be nice if someone could confirm that dealers genuinely can change the GFV to whatever they want.

If we assume they can change the GFV themselves, then perhaps when you come to change (providing its VWFS) the money the dealer appears to cough up to settle the car is also a load of rubbish and theres a smoke and mirror type thing happening with the retailers and VWFS?

 

[Ckpearce91]

No you're correct Steve, if theres no money left in the car when you want to change in a few years time you'll either a) put no deposit down on your next car, b) pony up some of your own cash to create a deposit.

If there's actually negative equity left in the car when you come to change, i.e. GFV is higher than what they're willing to pay for it in part-ex, I imagine you'd have to pay the difference.

I'm surprised to learn that the dealer can make the GFV up off the top of their heads though, very odd. It would be nice if someone could confirm that dealers genuinely can change the GFV to whatever they want.

If we assume they can change the GFV themselves, then perhaps when you come to change (providing its VWFS) the money the dealer appears to cough up to settle the car is also a load of rubbish and theres a smoke and mirror type thing happening with the retailers and VWFS?

Isn't this what GAP insurance is for? Or am I talking crap? Haha. I'm also on my first PCP


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[rcopus]

Isn't this what GAP insurance is for? Or am I talking crap? Haha. I'm also on my first PCP

That covers you if you're gonna write your car off and not have the dosh to pay them yep.

 

[Ckpearce91]

That covers you if you're gonna write your car off and not have the dosh to pay them yep.

Yeah I knew that side of it, I just thought there was more to it lol.


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[steve67]

No you're correct Steve, if theres no money left in the car when you want to change in a few years time you'll either a) put no deposit down on your next car, b) pony up some of your own cash to create a deposit.

If there's actually negative equity left in the car when you come to change, i.e. GFV is higher than what they're willing to pay for it in part-ex, I imagine you'd have to pay the difference.

I'm surprised to learn that the dealer can make the GFV up off the top of their heads though, very odd. It would be nice if someone could confirm that dealers genuinely can change the GFV to whatever they want.

If we assume they can change the GFV themselves, then perhaps when you come to change (providing its VWFS) the money the dealer appears to cough up to settle the car is also a load of rubbish and theres a smoke and mirror type thing happening with the retailers and VWFS?

Well,
i have a quote in front of me from Audi
for an A3 1.4tsi with a few extras.
first quote was £257pm x48 gfv £8750
then '1st quarter deal' £242 pm x48 gfv £9500
with the starting price the same.

also the gfv after 3yrs and 4yrs hardly change, £1500 difference approx
the sums just don't add up to me.
even when you look at the vw finance calculator the difference between 3 and 4yrs the gfv is only £1200 but your paying £274 pm, so to me the 4th year is expensive .

 

[adzmofo]

the only way you would get billed for the excess mileage would be if you just handed the car back at the end and didn't get another one. might be worth a call though just to cover your back just incase

you can adjust the mileage on your pcp mid term this is something I asked at the outset, they just adjust your payment and the GFV accordingly

I learned this a while ago. Was never actually getting to the end of the term anyway so always put down 6000 miles/year now as it's irrelevant if you don't need the safety net of a GFV at the end.

 

[DeanC]

Well,
i have a quote in front of me from Audi
for an A3 1.4tsi with a few extras.
first quote was £257pm x48 gfv £8750
then '1st quarter deal' £242 pm x48 gfv £9500
with the starting price the same.

also the gfv after 3yrs and 4yrs hardly change, £1500 difference approx
the sums just don't add up to me.
even when you look at the vw finance calculator the difference between 3 and 4yrs the gfv is only £1200 but your paying £274 pm, so to me the 4th year is expensive .

In this example it's not reallt the gfv at work but the finance.

A pcp arrangement is a simple thing. You take a car and based on the mileage agree to pay for the depreciation over your chosen period. You also cover the finance costs. Going from 3 to 4 years increases the term by 33% so your exposure to the finance costs is a third higher.

A 10k personal loan over 3 years would cost about 300pm, increase the term by 1 year (33%) and your payments go down to about 230pm. This is only a 20% drop so has obviously not matched the 33% extra term and you end up paying more. On a pcp it is exagerated as the capital is depreciating during the extra term you are already paying extra for.

You also have an MOT and sometimes no warranty in your 4th year which adds risk.

 

[rcopus]

I learned this a while ago. Was never actually getting to the end of the term anyway so always put down 6000 miles/year now as it's irrelevant if you don't need the safety net of a GFV at the end.

Dealers have always said to me milage doesn't matter if you're going to get a new car at the end of the term too.
I've never trusted them, when you read the contract you're signing its pretty clear you're signing up for a maximum annual mileage. After all, the agreement is between you and VWFS, the dealer isn't going to come running to your rescue if you're in breach of its terms.

I've always thought of it like giving your milage estimation to your insurance company, yes you can lie, and it may be fine, but when it goes tits-up, you may not be so lucky, and you won't have any legal protection.