I've just looked into lease vs PCP vs bank loan options. I bought my current TT as an Audi used vehicle with a bank loan intending to keep it for a long time. Less than a year later and it's unfortunately no longer suitable for me. If I can sell it privately for around the price I want, it will have cost me £7000 in this time (depreciation, service, MOT, tyres, new windscreen, stone chip repair, alloy refurb). I managed to get a PCP deal through carwow and my local Audi dealer for only £10 a month more than I was paying on my bank loan, and for £60 a month less than I would on a lease so it was a fairly obvious choice for me. Once I get it I won't have to worry about depreciation, the car will be brand new and in warranty. If I were you I'd just carry on leasing or PCP if that works out cheaper which it could unless you want to keep the car for a very long time
You had to get new tyres in less than a year...?
Service, tyres, new windscreen, stone chip repair and alloy refurb are not specific to used cars. You would have had all those costs on a PCP too!
I'm quite surprised by the figure of £7k though. What was the TT?? How old was it? You probably paid about £2/3k mark up from buying it from a dealer, but depreciation on a used car at the 3yr mark should not be in the £5k a year region....(unless it was a diesel...)?
S3 sportback with about £2k options, loan and pcp both over the same duration although obviously the TT would be fully paid off. I think the GFV is around 17k off the top of my head which looking at used S3s seems about right. £330 a month TT vs £340 a month.
A S3 with £2k options is RRP £37,800. 15% discount (highest I've seen) makes it £32,130. Assuming a 3yr/30k PCP, to get payments of £330 would require a deposit of about £4,700. So it's not just £330 a month...it's £330 a month and £4,700, or effectively £460 per month.
The settlement after 1yr on the S3 will be about £25k on the finance, whereas the trade in value is likely to around £23k. So you would have paid £4700 upfront + 12 payments at £330 + £2000 in negative equity = £10,660. The TT would in fact £3,600 cheaper to run over the 1yr period, and that doesnt include the fact that a service would also be required, as would windscreen repairs and alloy refurbs....(and tyres...seriously 1 yr! That's impressive!).
Are you putting £4700 on the TT upfront as well as the personal loan? As Flow says..not enough detail here really to compare.
Having said that, it’s the ‘obviously the TT would be fully paid off’ that’s makes quite a big difference...
The payment on the PCP is only paying for depreciation and interest. The loan on the other hand is paying for a small amount of interest, some depreciation but also capital on owning the car. So when you sell the car at the end of the loan you are effectively getting back that capital you were paying on the loan.
When you calculate the total cost at the end of the lease/PCP with the total cost of a used car paid in full with a loan, the used car will always be cheaper. It has to be. You are paying for a lower depreciating asset using a loan with lower interest charges than a PCP. It's when you add the additional maintenance costs that you start to work out if a used would be similar in costs over the long run, but every time I do the sums the high depreciation of a new car fair outstrips any potential repair costs (which are only theoretical. Depreciation on a new car is guaranteed....).
I'm all for leasing and PCP if that's where you want to spend your money, just don't get sucked in by the dealers and only focus on monthly payments. There are far more other costs going on that you need to account for as well....(and that includes used cars, which will incur more maintenance costs). You are buying a £33k car that will be worth about £19k in 3years time, along with high interest charges for the convenience of paying monthly with a defined sale price at the end. No getting around that pure and basic fact....
