So it is actually cheaper per month to get the 3 year PCP? Why on earth did I go for 4 when I intend to get rid after 3 years?!?
It depends on the trade in valuation you get at 3yrs.
If the trade in is greater than the GFV at 3yrs, you will pay the same whether you took it out on a 3yr or 4yr.
Obviously each month will be cheaper on a 4yr deal, but if you trade in at 3yrs the difference between the settlement and trade in price will be larger, so whatever you saved by taking it on a 48m, rather than 36m, will be recouped by negative equity when you change at the 3yr mark.
In my usual boring manner, I have taken the time to look at the sums to illustrate for you...I know I know...i'm too kind...
E.g.
S3 Saloon 36months 30k miles with £2500 deposit and £800 contribution:
£2500 followed by 35 monthly payments at £529.92. GFV = £19,681.15.
At 3yrs if the trade in is better than GFV at £20k, then the total you will pay will be (2500+(35*529.92) =) £21,577.12, minus the positive equity of (20,000-19681.15=)£318.85
Total Paid = £21,258.27
Same S3 Saloon on 48months on 10k miles PA, but traded in at 36months with 30k miles with £2500 deposit and £800 contribution:
£2500 followed by 35 monthly payments at £461.70. Settlement figure, according to a calculator, will be about £22,500
If at 3yrs the trade in is the same as above at £20k, then the total you will pay will be (2500+(35*461.70) =) £18,695.5, minus the negative equity between the trade in value and settlement figure (obviously it's higher than the GFV of the 3yr deal, as you have paid less off...) (20,000-22,500=)-£2,500
Total paid = £21,159
So as you can see, in the case where the valuation is more than the GFV, it doesn't matter what term you take it over. To be able to pay off the £2500 negative equity if you took the 48month deal and traded in at 3yrs, you would need to save an extra £70 a month over the first 35 months...£461+70 = £530....exactly the same you would pay per month on a 3yr deal....
Now if the valuation is less than the deal, that's where being on the 3yr PCP has an advantage:
Same as above but the valuation is £18k after 3yrs, not £20k. In the 3yr PCP deal you can hand the car back and not pay the negative equity (GFV = £19681.15-18000 = £1681.15) and only end up paying £21,577.12.
In the 4yr PCP, you don't have a choice. You've paid £18,695, and now the difference between the valuation and settlement is £4,500. You dont have a GFV at 3yrs to protect you, so will cost you (£18,695+£4,500 in negative equity=) £23,195. Most people wont both paying £4500 to get out early, so as said, stuck with a car out of warranty for another year until they get to the end of the term and give it to Audi to swallow the negative equity.