Financing Options?

[SciroccoSteve]

Hi everyone,

im looking to get involved in some lovely Scirocco action in early 2010 but am finding it quite hard to decide on the best route to finance it.

Budget wise the monthly repayments would have to be around the £300 mark.

I have been looking into a PCP deal over 5 years with a company in Croydon which said they can do me a manual GT / Diesel 170 for £297pcm with a £2500 deposit.

Which initially sounds ok to me as its within my budget and i was told that after 50% of the car was paid off i could just hand back the keys, this should equate to around year 3-4 which is also fine as i only tend to keep cars for around 3 years. But with the VAT going up in the new year it had got me thinkin that well what if it goes up again, that would push my repayments up and maybe out of monthly budget. Plus i couldnt sell the car as in effect its not really mine :/

So really im looking for some advice from you guys on what could be my options for owning a Scirocco beaut for next spring

Cheers guys, much appreciated!

[SciroccoSteve]

Anyone?

[trix]

Steve

not sure what to suggest, have a look on the net for cheap loans or see what your dealer can offer with regard to a finance deal. pcp etc is lost on me
i personally have been nice to the bank & used savings for the rest

S

[bookie]

I think im probably going to go for PCP - it's not the most competitive deal ie the total cost payable will probably work out at more than paying out right or leasing but it's pretty much the only way I can afford the monthly repayments whilst also saving for a deposit on a house.

What I'd do is get a quote for both PCP and HP and look at the total cost payable and monthly payments and base your decision on that.

The other option is to get a few quotes from leasing companies - leasing is worth looking at it (although the monthly payments are slightly higher) especially if you want to change your car relatively frequently.

[Scirocco Bhoy]

bank loans! Interest rates are so low at the minute.

I got a £10k loan for my car...paying back £1200 over 3 years on top of the £10k i borrowed.

[Andy-GTI]

bank loans! Interest rates are so low at the minute.

Are they hell.

Bank loan rates are actually pretty high currently, compared to rates a few years ago.

8% is far from the bragain of the year. . .

[marriedblonde]

jesus buying a car over 5 years!!!!

[croydonvw]

There are is no VAT on finance payments. it shouldnt make any diference whatsoever apart from the initial purchase price!!

It would only make a difference if you were leasing the vehicle, in which case each VAT increase would increase the repayment payable!!!

[littleyellowspider]

Cash (unless you have a 0% quote) will always be the cheapest way to buy cars!

However, if this is not an option then tesco finance is probably the cheapest. Saying that, I did get a PCP quote (just out of interest) for my 2.0TSi GT. Having knocked them down on price as low as they could agree to go, and knocked them down on their PCP APR as low as they would agree to go, we came up with a PCP plan that included a 30% deposit followed by 35 monthly payments of £234.42 (this included the lifeshine treatment in the final price of the car).

Seemed a pretty good quote, then you do the sums and realise that you're paying for nearly 70% of the original value of the car in the 3 years you own it. Which is a lot for a car being quoted with a GMFV of 52%.

Buying outright gives you far more flexibility with the car too - but then, at 32yo, I'm old school like that and only buy things outright.

Still, I can appreciate people's eagerness to get into a nice car. What I can't appreciate is how people accept a finance quote without bartering just because the monthly payment looks attractive. You simply have to get the best price (and best APR) for the car regardless of how you're financing it.

[SciroccoSteve]

Thanks guys for all your replys!

Im going to have a good look around and see if i can get a good deal on a personal loan

[littleyellowspider]

a PCP deal over 5 years with a company in Croydon which said they can do me a manual GT / Diesel 170 for £297pcm with a £2500 deposit.

What is the quoted GMFV after 3/5 years?

From what you're saying, you can hand the car back after (lets say for arguments sake) 42months, the cost of ownership would have been 42x£297 + £2500 + assorted arrangement fees (lets say £145) = £15119. Which doesn't seem too bad. And that's before you've bartered on the price (but it's also before you've added any options!)

With a £2500 deposit you'll be financing the remaining £19855 (£22355 for a basic 170 GT TDi Manual)

You get a £19855 loan from Tesco over 10 years and repay £239.91pcm for 36 months after which you sell the car at say 50% retained value (£11177.50) and repay what you owe Tesco (plus 2 months of interest (£74.45 per month) on the remaining loan (84 x £165.45833 = £13898.50)) means for 3 years of ownership it will cost you:

£2500 + (36 x 239.91) + (2 x 74.45) + £13898.50 - £11177.50 = £14172.12

Alternatively, you get a £19855 loan from Tesco over 5 years and repay £402.56pcm for 36 months after which you sell the car at say 50% retained value (£11177.50) and repay what you owe Tesco (plus 2 months of interest (£71.64 per month) on the remaining loan (24 x £330.91666 = £7942.00)) means for 3 years of ownership it will cost you:

£2500 + (36 x 402.56) + (2 x 71.64) + £7942.00 - £11177.50 = £13899.94

At these rates, your offer from Croydon again, looks attractive. It means you get to keep the car for another 6 months at the cost of £946.88 (versus the 10 year Tesco loan) or £1219.06 (versus the 5 year Tesco loan) and then hand the keys back with no fuss over repaying the loan provider etc etc.

I think that's right!! A finance expert may be able to correct me if it is wrong.

To do the sums correctly, you need a definitive month for handing back the keys to Croydon, and a GMFV of the vehicle.

[SciroccoSteve]

Thank you that was a really helpfull comment, really appreciated!

Will speak to the guy in the new year and see if i can haggle on price and maybe options, still undecided on what engine and gearbox type :/

Its difficult but id quite like to try a couple of Scirocco's to judge what to get know what i mean?

Thanks again