21MY Kings Red Up! GTI
But then if you finance the car with a loan is that not a rental with a finance company until you pay it off?
I've never had a car on PCP, but Isn't the balloon payment what you have to pay if you want to buy the car outright ?
I see - in which case my last set of sums make the example above a total cost of £16,596 and the car is then an owned 'asset'.
Clearly, a cash buyer could save £3k odd, depending on the actual purchase price of the car on the day (say it was £13K, three years ago?), but not everyone has that cash, so the debate is really about what is the cheapest way to borrow £13K....
Even at 15% APR, the cost of a £13K/3year loan is about £3K - so you could argue that the PCP deal above is about the same as a loan at 15% (and that is way more than you need to pay these days, I reckon). Is there something I've missed?
I'd like to have bought a house without being in debt!dont get into debt as my old and wise Gran used to say.
I can get the actual figures as they were from my memory… the thing is this was with 0%apr, and I am not sure where you can get £3k off a new GTI unless you go basic on the spec, how this equates to 15%apr not quite sure??Starlight, I don't know what a 'balloon' represents - but assuming it's money you get back on your deal when selling the car, the cost over 3 years was £211 x 36 (=£7596), plus the deposit of £3k, and that gave you a new car for £10,596... but then you also got £6000 back on selling the car, so the total cost to you was only £4,596 ? That's an annual ownership cost of £1532 per year, right?
Not really… I am not paying any interest on my pcp as it is 0%apr. Essentially it is a partial loan on the car that I’m 3 years I can choose to finance the outstanding amount - balloon payment - or sell car that would pay outstanding balance off. Essentially saving 3 years worth of interest that is better in my pocket than with a finance company. Just because you may choose to finance a car through a loan may mean you ‘own’ the car but you still owe the finance - and how would you settle that without selling the car or other asset? It is still your name on the V5 in either case.I view PCPs like interest only mortgages… You pay a lot less money every month but you never actually own anything. ….
Still don’t see where the pcp costs £3k more. If I had bought my GTI for cash I would of paid the same amount. I would look at my pcp as a discounted (0%) interest period that is not available elsewhere."I am not sure where you can get £3k off a new GTI unless you go basic on the spec, how this equates to 15%apr not quite sure?? "
I didn't say you can get £3k off the price. I used example figures to illustrate the point, which is that a PCP deal is roughly the cost of a very expensive loan. If you borrow £13k over 3 years at 15%, the cost of that loan is about £3k - and nobody is paying a much as 15% on a normal loan....
Its exactly how we feel. We have walked away having ordered a full spec brand new GTI which is more fun and does not feel like a stepdown in anyway. And we are better off by around 30 to 40 quid per month.Only just bought the GTI, so not made first payment yet! I did check options to buy and this current 0% deal was most cost effective. Cash price was same as pcp price, hence why I am a fan of the pcp option in this particular case at this interest rate, otherwise I would of financed by other means. Cheapest personal loan was about 6%apr and VW hp was 6.5% as I recall.
At end of day I am happy with my deal - you pays your money, you takes your choice as the old saying goes.