I understand what you are saying but in reality a vast number of people buy there for work and get allowances to cover the costs. Also the chance of remaining in the agreement for the full term is neglable.
From memory I think it was 1k down over 4 years, I don’t know the final payment but for a 43k car I thought it was decent as I paid nearer £500 for my black edition a6 a few years back.
I know the new a6 comes out soon so some very good deals to be had
Yea I know why people buy cars based on monthly payments, but that wasn't what I was getting at. You're indicating that your mate got an amazing deal because he pays £360 per month. I could get a RS6 for £300 per month...it is completely meaningless as it doesn't take into account all the other costs associated, i.e. likely a much larger upfront payment!
Likewise, your deal where you paid £500 could have been for a higher price car, with more extras, with bigger mileage and a small deposit, over a shorter term. It may have included debt from another PCP deal previous to that...I mean there is so much that impacts monthly cost.
If he's likely to come out early, he will have to cover the inevitable shortfall between the cars value and the finance owing at whatever point he wants to change (I'm guessing probably around year 3?), so yet another cost.
E.g. Discounts on a no option A6 Avant BE 1.8TFSI S-Tronic is 24%. On a 48m PCP 5k miles and £1k down, I would pay £357.14pm.
By month 36 I would have £18,700 still outstanding on finance. However, predicted trade value of the same A6 after 36m is only £17k. So I would have to pay £1,700 in negative equity.
So we've gone from £360 per month...to £1000 up front as well...to around £2k in negative equity he will also have to pay for if he trades in early at 3yrs....and then depending on mileage, if he exceeds that, the added cost that will have on lower valuation at trade in, or excess mileage charges if keeping till end of agreement. That's why concentration on just the monthly cost is so dangerous...
Why do you think dealers put the initial payment in small writing on adverts for PCP deals (same for lease deals)...? Because it gives an indication that the cost is much lower than what it is in reality!