I get where you're coming from but I can afford the payments for the A3, I've just decided the money can be put to better use. I managed to get £4,000 off the list price of the Peugeot and free GAP insurance chucked in. It's a 48 month contract with payments of £285 a month compared to £367 at the moment so a big saving by the time car insurance comes into it. I won't be shifting this car until at least the half-way point (where you can voluntarily end the agreement) so all is good
In all likelihood, you will be fine and have no issues....
...but...!
...the reality is none of us know what life will throw at us. Whilst we hope for the best, it's generally wise to prepare for the worst. Illness, accident, redundancy, being fired, children...etc etc. Anything can happen that changes our circumstances and needs, particularly over a period as long as 48months. I mean, this is why we put money aside for rainy days and have insurance policies...
That's why many would advocate deposits of at least 20% to ensure they aren't in negative equity at any time during a PCP. That way if they do need to bail out the agreement early, they don't have to worry about finding extra funds like your good self to cover the negative equity. Same applies with a loan for a used car. Not many would say get a loan for the entire amount, but round 50% to ensure the value of the asset outweighs the debt against it over the term of the loan.
Obviously in this case, you are doing the exact opposite....
Of course you do what you feel works best for you. I'm sure if you're being honest, you probably wished you had never signed that dotted line for the A3 9months ago and bought something much cheaper and put those monthly savings towards your house deposit now...? I imagine you would be a fair few thousands better off..! I only assume this because, while I got my S5 after my mortgage, I still regret the amount I spent on it...!
It's why I and many others offer this advice to members on here looking at getting rather lovely Audi's before they have got on the housing ladder.
Anyway, I just hope it works out for you mate, and you dont have similar regrets in 12/24months time with this as well....
Might be worth clarifying the VT thing as well. It's 50% of the total amount owed, including interest incurred. If the GFV is £3,750, then 47*285+3750 = £17,145, meaning you will have to have paid £8,572.5. That would be about 30 payments of £285, so about 2.5years.