Paying off PCP Early

[Shinobi675]

Absolutely... Look at the 997.2 turbo with all the options. Actually cost more than the equivalent 997.2 turbo s. Not the s is a 20% premium.

[W8PMC]

Porsche appear to do the same & openly state they want the customer to come back for a seamless transition into their next Porsche with equity in the car coming back. They also, which did surprise me don't increase the GFV if you start adding options. Now granted some toys will have little or no impact on the residuals, but surely the chunkier ones such as Ceramics & Carbon etc. must increase the value of the car, but this doesn't filter into the GFV.

Which is why I don't really understand why you'd take Turbo over Turbo S.

Now i've had some indicative figures, you're right that the Turbo becomes less attractive. I also found out the other day (which surprised me) that for the 991, Porsche sell 2 Turbo S's to every 1 Turbo.

All told though, i've been diverted a little & am paying Tesla & McLaren a visit on Tuesday to check out their offerings as the new P90D & 570S have caught my attention, albeit that may only be a temporary diversion.

[Eddie555]

I had a go in a tesla Paul. It's silly quick but the interior fake carbon and the lack of engine growl leaves you lacking in any emotion.

[doodlebug]

Having said that, looking at Porsche's 3 year residuals, you'd be mad to go Turbo S as there's only 5k in it at 3 years.

[Cheib]

...... I think the GFV seems to be tied into how much interest you are going to pay over the period of the PCP. Which makes sense from Audi's perspective I suppose!

The GFV has nothing to do with the interest you will be paying. It is only affected by the length of the agreement, the model of the car, the agreed mileage and a prediction of the future market.

If you increase the deposit, you will pay less interest, because you are borrowing less.

Audi/BMW... Finance generally want to set the GFV at about or up to 10% less than they (through CAP) think the car will be worth at the end of the term. They want the customer to have equity in the car so that a new purchase is more appealing.

Sorry you're wrong about the GFV it is definitely linked to the payments Just checked with the salesman again.

I have two quotes from the dealer in front of me. Both over 24 months and 8000 miles per annum.

First one has the max deposit of £43k and monthly payments of £518.81 per month. The GFV is £35k. Total amount payable £89,942

Second one. Deposit of £27k with monthly payments of £631.12. The GFV is £49,875. Total amount payable is £91,400.

If you think about it the GFV has to be driven by the amount outstanding as it is driven by how much you need to pay for the car in total. So by overpaying so much during the two year course of the loan you are left with a low GFV.

GFV is actually a slightly misleading term it's primarily driven by how much you have left to pay not be the residual. They sell it as a residual but it's not really it's the third element of the payment for the car. The reason it looks like a GFV is that in most cases they model the transaction so that you get left with a lump sum just below the value of the car so that you have a small amount of equity inducing you to buy a new car.

PCP's are really leases structured to make you a repeat customer. I.e. You're forced into a conversation because of that trapped equity at the back end.

[Ian_C]

You are both right.

Assuming the same deposit, the higher the GFV, the less you need to pay off to get there, and the lower the GFV, the more you need to pay off to get there.

GFV = final balloon payment. You pay the balloon and own the car, you hand the car back and walk away, or the dealer offers you a slightly higher px price..... IF you px it against a new one

entrapment.com

[S4WON]

Cash
Bankloan
Pcp
Lease

Imo

[Cheib]

Cash
Bankloan
Pcp
Lease

Imo

I think it's actually

PCP - and pay off immediately
Cash
Bankloan
PCP
Lease

[S4WON]

Well, for the audi contribution, yes but all things being equal too many ties with pcp.

I looked into this in some detail 6 months back, created a load of spreadsheets, ran the number and guess what

The stealers always win :£

[mat776]

Sorry you're wrong about the GFV it is definitely linked to the payments Just checked with the salesman again.
........

Cheib, I don't mean to criticise you but those figures don't make sense. You need to check with the dealer again.

Why would anyone want to pay more up front to have a lower guaranteed minimum future value ? You want the gfv to be as high as possible. A problem noted on this forum last year as the gfv changed from 1st to 2nd quarter last year.

Have a look on the finance configurator (not always accurate admittedly !)- if you keep the miles and the age the same but change the deposit the monthly payments change but the gfv or the gmfv ( as it's known to bmw )doesn't change.

Prior to March last year it was at 46k on a 36 month RS6 - 2nd quarter it dropped to 41k. Now it's about 37k on the same car - all 10 k miles.

Clearly the final total figure changes depending on the size of the deposit because you are borrowing less. Speak to another dealer and check you are being given accurate information.

I just fail to see how changing the gfv in the way you have been quoted makes any sense at all. It makes no sense that Audi would change it as your dealer describes.

Again (I stress) I don't intend to criticise you, just the advice you have been given. I have had 4 cars from Audi in the last 3 years and various others over the years. All have had Pcp's (which I have paid off within the cooling off period) and I have never seen the gfv change by changing the numbers at the front end.

Is the mystic blue in Amersham btw - it's very nice !

[Cheib]

Sorry you're wrong about the GFV it is definitely linked to the payments Just checked with the salesman again.
........

Cheib, I don't mean to criticise you but those figures don't make sense. You need to check with the dealer again.

Why would anyone want to pay more up front to have a lower guaranteed minimum future value ? You want the gfv to be as high as possible. A problem noted on this forum last year as the gfv changed from 1st to 2nd quarter last year.

Have a look on the finance configurator (not always accurate admittedly !)- if you keep the miles and the age the same but change the deposit the monthly payments change but the gfv or the gmfv ( as it's known to bmw )doesn't change.

Prior to March last year it was at 46k on a 36 month RS6 - 2nd quarter it dropped to 41k. Now it's about 37k on the same car - all 10 k miles.

Clearly the final total figure changes depending on the size of the deposit because you are borrowing less. Speak to another dealer and check you are being given accurate information.

I just fail to see how changing the gfv in the way you have been quoted makes any sense at all. It makes no sense that Audi would change it as your dealer describes.

Again (I stress) I don't intend to criticise you, just the advice you have been given. I have had 4 cars from Audi in the last 3 years and various others over the years. All have had Pcp's (which I have paid off within the cooling off period) and I have never seen the gfv change by changing the numbers at the front end.

Is the mystic blue in Amersham btw - it's very nice !

Oh all taken in good spirit etc...no taking offence at all. It's very hepful sounding these things out!

Yes it is the Mystic Blue in Amersham....it's about to be the Dealer Principal's car apparently. Not surprised they haven't sold it at £97k....be a hard car to sell when you can have a very nice Performance Edition for less!

The dealer that quoted that (not Amersham) is one a lot of people speak of very highly on here. I know it doesn't make sense, why would you ever do it ?!

However I think it does demonstrate a bit how their model works....these things tend to show their true colours when you have extreme examples. I've had a look at the Audi Finance model (which I didn't know about...many thanks) and I think the difference is that you cannot change the monthly payment on there.

I am going to speak to the dealer tomorrow so will report back...I really don't care that much about the deposit or monthly payments the two things that interest me are total cost of owenership and GFV. If there is something which gives me a good GFV whilst not costing a fortune in total payments I will look at it...otherwise I'll be paying off the PCP in the cooling off period.

[mat776]

Actually that is exactly my process too ! But never found a way of making the pcp make sense to me - hence always cancelled in the cooling off period. For me the insurance of having a gfv was never worth the 4K ish interest premium by going with the pcp.

Interestingly the gfv on a 24 month rs6 PE (10k miles) is about 4k more than CAP Monitor think it will be worth 49k vs 45k. Perhaps so because Audi are trying to entice buyers to PE, but it seems quite a risk.

One piece of advice - make sure when you speak to them to cancel (if you do) you tell them you are exercising your right to withdraw within the cooling off period, otherwise they will treat you as though you are paying off the outstanding balance and it will cost you more. They will not explain the difference to you. How much , I am not sure, but it will be more. You will be given 30 days to pay and the will send you a letter explaining that and that if you don't pay they will commence recovery. Once you cancel you cannot change your mind.

Good luck with all anyway.

[mat776]

Wow - 1st gear after a year - maybe I should buy a Vauxhall

[S4WON]

I didnt post much in the first 5 years... Quality not quantity

[W8PMC]

I had a go in a tesla Paul. It's silly quick but the interior fake carbon and the lack of engine growl leaves you lacking in any emotion.

I'm thinking that could end up being the case, however the P90 with the Ludicrous upgrade is not far off being the fastest accelerating car on the market & can outdrag all 3 of the Trinity cars (albeit only up to about 80mph).

Also the sensible parts of me can't ignore the zero running costs & with a range of over 300 miles it's now a totally usable option, however i feel it's only the warp speed & zero running costs that's drawing me to it so a bit of time in one next week may quell my interest.

The 570S however, i'm still dribbling. I don't think i've ever seen car that looks as good in my opinion.