Facelift To lease again or not, that be the question

[wab172uk]

Very true, but we are dealing with fixed rates here rather than variable so peoples monthly car payments aren't going to change until it's time to start a new deal. At which point they should walk away and buy something more affordable.

True, but while the car payments are fixed, and manageable at the time of taking the PCP deal out, interest rates, and economic fluctuations can effect other aspects of your life. Mortgage rate rises, fuel rises, food price rises. All affecting that (once) affordable monthly expense.

Suddenly you have a choice to make. Mortgage and food, or keep the car that should be out of your wage structure anyway. And if you are in negative equity, you suddenly have to find potentially Thousands of pounds to get yourself out of it. And if you can't, then you run the risk of defaulting on your mortgage.

But hey, put the back seats down, and it can be a bed for the night !

 

[AGAG]

True, but while the car payments are fixed, and manageable at the time of taking the PCP deal out, interest rates, and economic fluctuations can effect other aspects of your life. Mortgage rate rises, fuel rises, food price rises. All affecting that (once) affordable monthly expense.

Suddenly you have a choice to make. Mortgage and food, or keep the car that should be out of your wage structure anyway. And if you are in negative equity, you suddenly have to find potentially Thousands of pounds to get yourself out of it. And if you can't, then you run the risk of defaulting on your mortgage.

But hey, put the back seats down, and it can be a bed for the night !

You act like these PCPs are a large portion of the monthly income, as though everyone taking them out is irresponsible and has no disposable income. Personally it's less than 15% for me and the people I know. It's not a Ferrari! Some food bills, mortgage rates or fuel bills going up is but an inconvenience, certainly not going to make me think about my car payments. There's also pay rises and promotions during the time of a PCP, the car payment for me is a smaller amount of my income at the end of the period than the beginning. We're not all paupers because we chose this way of paying thanks very much.

It's getting a bit tiresome to hear these extreme "what if" arguments again and again, when you could say that about anything. Want a house? Don't buy that house on finance (mortgage) in case you lose your job and somehow manage to never get another job!

There's less intelligence being brought to this discussion now and it's smacking more of people not liking that others have the same car as them without having to pay the full cost. If you're so happy with your purchase you wouldn't be clinging to "how are you going to eat when bills rise" when other people choose a way that suits them.

In summary - Finance is a viable way to buy a car, it works for some, it doesn't work for others. Some people are stupid and buy more they can afford, whether it's PCP or cash. That will always be the case with some people. Either way, live and let live .

 

[Thundercliffe81]

You act like these PCPs are a large portion of the monthly income, as though everyone taking them out is irresponsible and has no disposable income. Personally it's less than 15% for me and the people I know. It's not a Ferrari! Some food bills, mortgage rates or fuel bills going up is but an inconvenience, certainly not going to make me think about my car payments. There's also pay rises and promotions during the time of a PCP, the car payment for me is a smaller amount of my income at the end of the period than the beginning. We're not all paupers because we chose this way of paying thanks very much.

It's getting a bit tiresome to hear these extreme "what if" arguments again and again, when you could say that about anything. Want a house? Don't buy that house on finance (mortgage) in case you lose your job and somehow manage to never get another job!

There's less intelligence being brought to this discussion now and it's smacking more of people not liking that others have the same car as them without having to pay the full cost. If you're so happy with your purchase you wouldn't be clinging to "how are you going to eat when bills rise" when other people choose a way that suits them.

In summary - Finance is a viable way to buy a car, it works for some, it doesn't work for others. Some people are stupid and buy more they can afford, whether it's PCP or cash. That will always be the case with some people. Either way, live and let live .

Dude, I was literally about to say this! That's just weird. Mainly the argument of "anything could happen" and by that rationale, you might as well not even go outside or indeed get a mortgage. I'm always earning more at the end of my PCP too. Do I irresponsibly depend on that? Nope. But it's nice. Maybe it's time to let this one go now. I've learned a bit and I'm sure everyone else too.

On the next one I might look at further ways to insure against the worst.




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[4K]

@4K

Even if the APR rates are the same, a personal loan will accrue far less interest than a PCP because of the GFV. Since the GFV never decreases, you are paying interest on a higher amount over the term when compared to a traditional loan, which has no GFV and is based on paying the entire amount off.

E.g.
PCP interest on £30k loan @5.9% over 36m with £20k GFV = ~£4,400

Personal loan of £30k @5.9% over 36m = ~£2,700

As for bargaining power, just agree a deal with PCP and then settle the finance within 14days.

There are GFV's on bank loans now for cars. Those are the lower rated ones.

Higher rates ones don't have a GFV, and are above the current APR rate of the vast majority of PCP's, if not all.

 

[Thundercliffe81]

There are GFV's on bank loans now for cars. Those are the lower rated ones.

Higher rates ones don't have a GFV, and are above the current APR rate of the vast majority of PCP's, if not all.

Looked at this but they're rigid with mileage are they not?


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[Lewbo]

It all depends on your personal sitauation. I’ll tell you where I am at with my car situation, I have always owned my cars out right for the last 10 years.
Never financed or loaned just cash. I currently have an S5 sportback which I own.
I saw an S3 lease deal which was on a very good offer and it was that good I actually ordered the car and now selling my S5.

I have the cash to buy the S3 outright brand new but what would be the point in putting all my eggs into one basket. I only want it for two years and with my deposit and monthly payments on the lease deal its only costing me what I would of lost in depreciation if I bought it out right.
So what’s the point in tying all the cash up what the car would be worth after two years when I can put into something else and make a return on it which could pay the monthly payments.

 

[RGBARGEE]

It all depends on your personal sitauation. I’ll tell you where I am at with my car situation, I have always owned my cars out right for the last 10 years.
Never financed or loaned just cash. I currently have an S5 sportback which I own.
I saw an S3 lease deal which was on a very good offer and it was that good I actually ordered the car and now selling my S5.

I have the cash to buy the S3 outright brand new but what would be the point in putting all my eggs into one basket. I only want it for two years and with my deposit and monthly payments on the lease deal its only costing me what I would of lost in depreciation if I bought it out right.
So what’s the point in tying all the cash up what the car would be worth after two years when I can put into something else and make a return on it which could pay the monthly payments.

You are probably paying 6% plus interest. The GFRV will probably be less than the car will be worth. Sorry, if you have cash, unless interest rates are really low or you are worried about future value I would pay cash. Just my opinion. I am in a situation where I can buy new RS4 for cash - say £60k. Or £30k down and pay £200 a month for 3 years and hand car back or buy at GFRV value of £30k. So pay out £7k in interest to keep £30k in bank which might earn £1k interest. Sorry mate I don't follow your logic.


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[Jassyo06]

It all depends on your personal situation.

End of

 

[Jassyo06]

You are probably paying 6% plus interest. The GFRV will probably be less than the car will be worth. Sorry, if you have cash, unless interest rates are really low or you are worried about future value I would pay cash. Just my opinion. I am in a situation where I can buy new RS4 for cash - say £60k. Or £30k down and pay £200 a month for 3 years and hand car back or buy at GFRV value of £30k. So pay out £7k in interest to keep £30k in bank which might earn £1k interest. Sorry mate I don't follow your logic.


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Rs4 FORUM not that busy eh.....lol Joe Achilles Raves about the old codgers Avant ......

 

[RGBARGEE]

Rs4 FORUM not that busy eh.....lol Joe Achilles Raves about the old codgers Avant ......

B9 RS Forum isn't ever going to be that busy! You know that. My numbers quoted can be modified but the principles are the same. Paying 6% interest when BoE base rate is 0.5% is madness unless your circumstances are particularly special or you are worried about car value in 2/3 years time. There are different options and for sure personal circumstances will be different.


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[Jassyo06]

B9 RS Forum isn't ever going to be that busy! You know that. My numbers quoted can be modified but the principles are the same. Paying 6% interest when BoE base rate is 0.5% is madness unless your circumstances are particularly special or you are worried about car value in 2/3 years time. There are different options and for sure personal circumstances will be different.


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Yup and that's all i am saying on this topic.........but wait for the RS4 PERFORMANCE............

 

[RGBARGEE]

Yup and that's all i am saying on this topic.........but wait for the RS4 PERFORMANCE............

Ordering mine in April

 

[4K]

Looked at this but they're rigid with mileage are they not?


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I'll check later and get back to you. On first glance my bank didn't seem too bad on it. I have to say, I always overestimate on mileage, just in case.

 

[Thundercliffe81]

I'll check later and get back to you. On first glance my bank didn't seem too bad on it. I have to say, I always overestimate on mileage, just in case.

My dealer doesn't care. Haha. But I might bump it up next time and see how bad the GFV is. Gonna look at Audi contract lease too. Similar to PCP without the mileage restrictions.


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[RGBARGEE]

My dealer doesn't care. Haha. But I might bump it up next time and see how bad the GFV is. Gonna look at Audi contract lease too. Similar to PCP without the mileage restrictions.


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I would be amazed if contract lease had no mileage restrictions! The difference in value of a 3 year old. 'Ordinary ish' car with 150,000 miles rather than 30,000 miles will be huge .

 

[Lewbo]

I’ll tell you my logic with numbers to buy a S3 sportback Black Edition s-tronic with lets say 10% discount would cost me £34,000. If I paid cash that’s £34k paid out. In 2 years time the car will be worth about £25k so that’s £9k in depreciation I’ve lost.

With the lease deal I’ve got, in total with my deposit and monthly payments that also totals to around £9k.
So I’ve lost out on the same amount of money over the same term yet I have kept most of my capital back and allowing me to use it else where. What’s the point in tying up that £25k into the car at the start when I will only get back after 2 years when I sell it.

 

[RGBARGEE]

Interest rates! You are paying 6% out on a loan and arguably getting less than 1% back on investments.. unless of course you need the money I would pay cash and potentially save yourself over £100 a month. Just my 2p.