New A3 - Cash or PCP

h5djr

h5djr

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As some of you may have already noticed on other threads I am looking to buy a new A3 Sportback 2.0TDI SE S-tronic. The overall price of the car from my dealer with a 10% discount is £22871. He has also offered a trade-in value on my existing A3 of £12250, leaving me £10621 to pay.

Now I have two options - pay cash from my savings or purchase it using a PCP contact. For the A3 they are currently offering a PCP at an APR of 5.4%.

What I'm not 100% clear on and perhaps you guys with more experience in this area could help. What are the advantages and disadvantages of purchasing using a PCP. If I was to use a deposit of £7500 from the £12250 trade-in and have the PCP over 36 months the overall cost would be £24654.13. This is of course £1783.13. I doubt that, in the present climate having the £4750 from the trade-in and the £10621 cash not used would earn enough interest to cover the £1783.13 cost of the PCP.

Also at the end of the 36 months I would still have to pay £6746.38 as a final payment to own the car or if I was to hand it back, I would have the difference between the value, say £12000 and this figure, ie £5253 to put towards another car.

Any comments on these figures and the advantages of both methods of purchase would be very much appreciated.
 
You've summed it up yourself - as interest rates are so low, any money earned on savings at the moment is minimal. If you have the cash in the bank, and won't need it for the next 36 months, then far better to spend that.

No point in earning say 2% on your savings, at the same time as paying 5.4% on a finance agreement.

Also it gives you more flexibility if you wish to sell before the car turns 36 months old, as you won't have finance to settle.
 
Personal preference, but I steered away from the pcp scheme. It means you are tied to another Audi when you are ready to change cars. APR's that Audi quote do not correspond to the payment you make either. Just search for FSA loan calculator and pump the figures in as i think you will be paying more than the APR stated when you input the repayments. Lastly with the way investments are going the money you keep through having the pcp will earn sweet F all interest but you will be paying a lot more in interest to Audi. Better in my opinion to pay the lot off if you can afford it and what you would have paid in a loan stick back in the bank....just my pennies worth.
 
V6Pete said:
You've summed it up yourself - as interest rates are so low, any money earned on savings at the moment is minimal. If you have the cash in the bank, and won't need it for the next 36 months, then far better to spend that.

No point in earning say 2% on your savings, at the same time as paying 5.4% on a finance agreement.

Also it gives you more flexibility if you wish to sell before the car turns 36 months old, as you won't have finance to settle.
Click to expand...

BEAT ME TO IT!!!
 
The only advantage of PCP is cash flow, you are 'hiring' the car instead of paying outright and you can hand it back at the end. All depends on your financial circumstances and what you want to do when the PCP is up, even then if you are sure what you will do at the end things could change.

From the way it sounds you change often anyway and sticking with the A3? I'd go PCP if so.
 
I've just a few months ago bought a A3 s line (due mid March) and will be paying from savings. These schemes cost thousands in interest, and to top it off administration fees. Interest OK, they have to make a buck, but fees, well that's just greedy.

I'll be giving myself a loan, and then pay myself back by standing order into a regular savers account and then in 3 or 4 or 5 years time do it all again.

Of cause, saving the money in the first place, that's the tricky bit.
 
Yes I agree and have done the same. I placed on order for a new Sportback last Thursday and will paying the difference between the new one and the trade-in of my existing one in cash from my savings.
 
I'd go PCP, if the car is worth pap at the end of your term, you just throw em the keys and walk away ;)
 
WiZBiT said:
I'd go PCP, if the car is worth pap at the end of your term, you just throw em the keys and walk away ;)
Click to expand...

And if at the end of the contact it's not 'worth pap' you've just thrown away £2000 and ended up with nothing.
 
h5djr said:
And if at the end of the contact it's not 'worth pap' you've just thrown away £2000 and ended up with nothing.
Click to expand...

Not really as if you had bought the car with cash and the car is worth less than the GFV or final payment offered when you purchased, thats your loss and not the finance companies.

BMW are suffering from GFVs from 3 years ago as they were expected to be higher. Hence a lot of people handing the car back instead of paying there final payment of £10k for a car thats worth £8k.

But saying that, at the moment the best thing would be to go with cash if you've got it as all the GFV are a lot lower than they used to be as finance companies try and protect themselves, from my experience anyway!
 
Grl said:
Not really as if you had bought the car with cash and the car is worth less than the GFV or final payment offered when you purchased, thats your loss and not the finance companies.

BMW are suffering from GFVs from 3 years ago as they were expected to be higher. Hence a lot of people handing the car back instead of paying there final payment of £10k for a car thats worth £8k.

But saying that, at the moment the best thing would be to go with cash if you've got it as all the GFV are a lot lower than they used to be as finance companies try and protect themselves, from my experience anyway!
Click to expand...

Certainly the Final Payment on the A3 were in the 7.5-8k mark. Quite a bit lower than they used to be.
 
Has anyone reached the end of their PCP to find that their car is worth less than the guarenteed final value and have they offered the finance company less than this value to buy the car back.

I ask because we bought my wifes Peugeot 207 on a PCP (only £99 a month) and I am expecting that the car is worth less than the GFV. We like the car and there is plenty of life in it yet and I am thinking of writing to the finance company offering to buy the car for what its worth (i.e £1500 less than the GFV) or simply tell them that they can have the car back to add to their stock.

Has anyone had success with this or know of anyone who has.

With regards to my A3, I used my savings in the end to make up the difference. I had no PX as I managed to sell my PAssat on flea bay and got approx 10% discount. (that was 5 months ago though!)
 
i just came to the end of my PCP on my 2.0 A3 SE 140 TDI. It was 4 years old and there was a final payment of £7400 to pay.

Audi Teesside offered my £15,000 for the car as part exchange against a new Monza Silver Black Edition Sportback. They also knocked the sportback price down to £20,000.

needless to say i am now the proud owner of the black edition.
 
colin46 said:
i just came to the end of my PCP on my 2.0 A3 SE 140 TDI. It was 4 years old and there was a final payment of £7400 to pay.

Audi Teesside offered my £15,000 for the car as part exchange against a new Monza Silver Black Edition Sportback. They also knocked the sportback price down to £20,000.

needless to say i am now the proud owner of the black edition.
Click to expand...

So let me get this right, they give you 15k for a car thats worth 10k at best? Where do i sign!!
 
Lee_R said:
So let me get this right, they give you 15k for a car thats worth 10k at best? Where do i sign!!
Click to expand...

yep, VW offered my £10,500 against a golf GT, but audi offered my £15,000 against a 2.0TDi SB Black Edition. I took the deal there and then.
 
They offered you £15k on an A3 SE TDI 140, which was 4 years old AND discounted the new car by almost 20%?? No offence intended but I think you must have the figures wrong. What dealer did this offer???
 
davemk said:
They offered you £15k on an A3 SE TDI 140, which was 4 years old AND discounted the new car by almost 20%?? No offence intended but I think you must have the figures wrong. What dealer did this offer???
Click to expand...

well its your perogative not to believe me and thats fine.

the car was actually 3 and a half years old (sorry for the error) had 18,000 miles on the clock and the following extras:

DSG gearbox
xenon lights
full nappa leather
6 cd changer
parking sensors
18 inch RS6 wheels
interior light pack
light and rain sensor pack

and yes i have the figures in front of me and they are correct.

the dealer was audi Teesside

regards

Colin.
 
colin46 said:
i just came to the end of my PCP on my 2.0 A3 SE 140 TDI. It was 4 years old and there was a final payment of £7400 to pay.

Audi Teesside offered my £15,000 for the car as part exchange against a new Monza Silver Black Edition Sportback. They also knocked the sportback price down to £20,000.

needless to say i am now the proud owner of the black edition.
Click to expand...
........so £7600 in reality came off the £20000 car? As a side note wouldn't you have already been given a GFV when starting the agreement off? Which would have been much lower than £15000?
Sorry to sound cynical..and well done if all is correct mate..one up for us!
JohnyT
 
Johnytuono said:
........so £7600 in reality came off the £20000 car? As a side note wouldn't you have already been given a GFV when starting the agreement off? Which would have been much lower than £15000?
Sorry to sound cynical..and well done if all is correct mate..one up for us!
JohnyT
Click to expand...

yes, £7600 was the Guaranteed Future Value. But that is a figure that is set way low these days after all the early problems of negative equity that plagued this type of finance in the early days when dealers set the figure far too high.
 
colin46 said:
yes, £7600 was the Guaranteed Future Value. But that is a figure that is set way low these days after all the early problems of negative equity that plagued this type of finance in the early days when dealers set the figure far too high.
Click to expand...
Ah I see I get it now...ta for explaining Colin. I was looking in to a PCP but could'nt quite grasp the concept of paying for a car for 3/4 years and then still owing thousands on it. Can just imagine the wife when going into the dealers at the end od a PCP contract and saying ".......and you want £xxxxx off us? WTF you on?" :shrug:
JohnyT
 
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