Audi's PCP financing

[tee-bee]

Hi all,

Was wondering if anyone can share their financing agreement with Audi?

Been offered GBP 29,000 for my RS3 trade-in from the dealer. Managed a 10% discount on the RS4 and the dealer is only able to contribute GBP2000.

Is it worth putting in a bulk of the RS3 cash into the deposit? I guess it will reduce the monthly payment but in someway affect the overall optional final payment of the car?

Sounds a bit naive... just that my RS3 was purchased in cash.. and I'm thinking it might not be worth buying a car up front in cash if I intend to upgrade every 3-4 years?

Thanks

[carsarecool]

Sent as PM.

[moonigan]

Cash is king. Bank the cash from your RS3 and put a small deposit down. I put in £1K which became £3K with the deposit contribution. Payments are circa £750PM with a £26K GFV after 4 years.

[doodlebug]

Cash is king. Bank the cash from your RS3 and put a small deposit down. I put in £1K which became £3K with the deposit contribution. Payments are circa £750PM with a £26K GFV after 4 years.

This. Let VWFS have some of the risk. Put enough deposit in to keep monthlies to your liking.

[tee-bee]

With regards to the GBP26K GFV, 3 options are available:

1) Hand over the keys & walk away
2) Pay off the remainder via re-financing or cash
3) Put it into another new Audi, e.g. GBP60K for the new RS4 in 4 years time.

If the case of option 3, don't you still need to pay off the GFV somehow? or can that be used as a trade-in/deposit to the new Audi ?

[doodlebug]

Re 3, correct it's a trade in.

GFV is set conservatively, you'd be unlikely not to have capital in the car.

[tee-bee]

Re 3, correct it's a trade in.

GFV is set conservatively, you'd be unlikely not to have capital in the car.

If you were to trade it in for another new Audi, e.g. new RS4 and if that was to cost GBP 60K. If the GFV was let's say GBP 26K.

Does that mean you just need to finance the remainder, i.e. GBP 34K? for the new Audi?

[doodlebug]

No. There would be 26k outstanding on the car. You would trade in and any difference would be part/all of the deposit against the new car. Think of finance as rental.

[tee-bee]

No. There would be 26k outstanding on the car. You would trade in and any difference would be part/all of the deposit against the new car. Think of finance as rental.

Gotcha..

However, if the GFV has gone up slightly, I.e equity.

That can be used as the deposit contribution for a new car and I can walk away from the outstanding amount of the original purchase?

[davis1888]

If you're taking it out on Audi Finance should you not be getting £2K contribution from Audi UK and £2K from the dealer? Having just typed that you'll likely find the £2K dealer is included in that 10% off, which is pretty decent.

I'm having a little battle with my Audi dealership to be more transparent with both the "less payments / allowances" and "Charges" section of the Audi Finance proposal. You'd be silly not to ask for clarification on some of the numbers they give you.

On another note - Have you tried a broker like OrangeWheels? I got a better deal from them than the dealer, but going to give the dealer the chance to match it.

[tee-bee]

If you're taking it out on Audi Finance should you not be getting £2K contribution from Audi UK and £2K from the dealer? Having just typed that you'll likely find the £2K dealer is included in that 10% off, which is pretty decent.

I'm having a little battle with my Audi dealership to be more transparent with both the "less payments / allowances" and "Charges" section of the Audi Finance proposal. You'd be silly not to ask for clarification on some of the numbers they give you.

On another note - Have you tried a broker like OrangeWheels? I got a better deal from them than the dealer, but going to give the dealer the chance to match it.

Not looked at orange wheels, but drivethedeal.com seems pretty decent.

AM still negotiating with the dealer to see if I can get more for my RS3 as trade-in.

[Graeme4130]

If you're taking it out on Audi Finance should you not be getting £2K contribution from Audi UK and £2K from the dealer? Having just typed that you'll likely find the £2K dealer is included in that 10% off, which is pretty decent.

I'm having a little battle with my Audi dealership to be more transparent with both the "less payments / allowances" and "Charges" section of the Audi Finance proposal. You'd be silly not to ask for clarification on some of the numbers they give you.

On another note - Have you tried a broker like OrangeWheels? I got a better deal from them than the dealer, but going to give the dealer the chance to match it.

Not looked at orange wheels, but drivethedeal.com seems pretty decent.

AM still negotiating with the dealer to see if I can get more for my RS3 as trade-in.

Push quite hard on that as the sales guys bonus will have more weighting to the sale of the new car vs the profitability of the trade in
Almost worth letting them make a little more on the total purchase price and then taking that plus an alpha value on the trade in.
It's worth looking to see what the network is selling similar RS3's for through the approved used scheme, and then figure in roughly what they'd need to do (i.e. new tyres etc) to bring it to a sellable condition if applicable, and then figuring that into your nego with an allowance for their costs of sale (i.e. warranty and OH etc)
For example ; if the car's are selling for £30k and you're being offered £24, then try and hit as near to £26-7k as possible

[adsgreen]

No. There would be 26k outstanding on the car. You would trade in and any difference would be part/all of the deposit against the new car. Think of finance as rental.

Gotcha..

However, if the GFV has gone up slightly, I.e equity.

That can be used as the deposit contribution for a new car and I can walk away from the outstanding amount of the original purchase?

Yes.

Best to summarise.
If the total purchase price is say 50k and you have a 10k deposit and VWFS say the car is worth 26k at the end of 3 years.
Then you really have two loans:
- one loan for the difference (50k -10k -26k) of 14k. This is set so the monthly payments will mean the outstanding balance is zero at the end of three years.
- one loan for the balloon payment. This has no "principle" payments, you simply pay the interest over the 3 year term and this is added to the monthly payments.

So basically it's a bet by VWFS.
IF the car is worth less than 26k (which did happen in the post 2008 financial fallout) then they agree to guarantee this and absorb any shortfall when you come to the end of the term.
IF the car is worth more than the GFV (which is more common) then the difference between the 26k and whatever the market value of the car is (to a dealer) becomes your equity which you can use to a new car.
This is why there are mileage clauses in any PCP plan as the finance house have to protect the investment some way.

The above comment of thinking of PCP as rental is pretty bang on. If you plan to keep the car then it's better to have a traditional HP agreement.


The only other negative part of the PCP plan is regarding missed payments. You are renting the car effectively and if you miss a payment then the car can be recovered quite easily without fuss.
Under HP once you have reached certain milestones (I think 33% and 66% of the HP amount) then your claim to the car is considerably stronger. I believe (but not 100% that once you hit the first tier then the car company need to give written notice and go through some hoops. Once you hit the second tier they can not repossess the car without a court order.

[moonigan]

Also worth pointing out that PCP agreements tend to be front loaded so if you only put down a small deposit as I have done then the chances of getting out of the car in years 1,2 or 3 of a 4 year agreement without taking a bath are pretty slim.

P