Does anyone know for certain when this ends? And more specifically does it end tomorrow? Thanks

That's when it officially ends. Nobody is sure it may be extended next quarter too

But, dont forget, if you ordered tomorow for example on the 0% and you took delivery when a different offer is on, the the dealer should put you onto the better offer, that has happned to me in the past where they have moved me, and I also have it in writing for my current order that should a better offer come in then they will move me upon delivery.

Offer has been extended

Bad move, it should have been replaced by 0% VAT by now.

Bad move, it should have been replaced by 0% VAT by now.

 

Yes, that's exactly what Skoda should be doing now that demand is outstripping supply.

The New Octy is too popular at the moment for a 0% VAT deal. Skoda would just be decreasing their margins whilst increasing the queue's and customer dissatisfaction at longer waiting lists. Older models may well see 0% VAT return after Christmas. The Octy could possibly see it on the less popular non-VRS petrol models.

Bad move, it should have been replaced by 0% VAT by now.

What business model would do that when there are selling so well already?! Skoda have moved away from the 20% offers and don't see a future in that type of campaign.

Bad move, it should have been replaced by 0% VAT by now.

Not really. 0% is a bigger saving unless you are a cash buyer and they are in the minority, and once they have run the VAT free deal it will badly affect residual values for everyone.

The current offer will attract more customers.

Like me lol

It was still going today as my old girl just purchased a citigo using the 0% deal.

0% has been extended to Dec 31st according to skoda website

As my post above

Yes, that's exactly what Skoda should be doing now that demand is outstripping supply.

Demand has been outstripping supply for nearly a decade now. There has not been a moment in recent Skoda history where you could just walk in, order an Octavia and drive it away. The queue oscillates between few months and better part of a year, but it is always there. That's typical VAG sales model. No large incentive bonuses on targets, therefore no preregs, no fields of cars littering shores of Dagenham, no fake fleet orders and massive discounts on last years cars with second owner in V5 and 0 miles on the clock. Short supply, precise production numbers, no surpluses. That never stopped Skoda doing realistic discounts. Not to mention that over the last five years most of 0 VAT offers were coupled with 0 finance as well if you had hefty deposit and wasn't just a penny a month dreamer.

 

The New Octy is too popular at the moment for a 0% VAT deal. Skoda would just be decreasing their margins whilst increasing the queue's and customer dissatisfaction at longer waiting lists.

What business model would do that when there are selling so well already?! Skoda have moved away from the 20% offers and don't see a future in that type of campaign.

Not really. 0% is a bigger saving unless you are a cash buyer and they are in the minority, and once they have run the VAT free deal it will badly affect residual values for everyone. The current offer will attract more customers.

 

They do not "sell". They rent out. All eggs in one finance basket is unsustainable long term business model because it bets all earnings against customers whose only priority is monthly rental/repayment figure. Prioritising PCP customer over long term/high mileage users is what subprime was to housing market. Majority of them have no intention of keeping the car or paying final settlement figures. Now long term keepers/cash buyers - not only did I actually pay for my car in full, but I'm in the dealership three, four times a year even with long servicing schedules. Minor/major rotation plus all liquids at least once a year. Now, the "renter" will pay tiny deposit and after they start their "from £69 a month" free finance with free servicing journey the dealerships will not see a penny from any of them. On one hand large margin negotiated but never received in full, small deposit and petit cash dosed in small drip of monthly payments, very little extras, no cash from maintenance. On the other small margin on large sum, long term maintenance contract, extended warranty. Weird priority, if you ask me.

And while such business model might maintain cash flow from deposits on overinflated, unrealistic OTR prices here and now, two to three years from now it will inevitably lead to courtyards full of junk built to budget, that will have to be priced to the sky to cover the outstanding figures. They will be mostly terrible spec, with basic factory extras like cruise control missing (on what was meant to be hot hatch) and with maintenance records kept to bare minimum by both monthly sum orientated "owner" and corner cutting dealer who had to offer free servicing. And most will probably be in a state reflecting, well, a car you don't own and rented for couple of grands a year.

As a result most of what "sells" now, will most likely barely meet auction or cargiant criteria, and flooding the market in fleet volumes will further destroy resale values creating the all familiar Octavia 1 second hand value implosion. And all of that while dealerships do not see a penny from "rental" customers until they bring their budget bangers back few years later and forfeit the finance under the Consumer Credit Act.

Without bringing values back to realistic levels for cash and long term buyers via "VAT free" (it's not VAT free, it's not like they don't pay VAT, it's simply pricing them according to their "budget brand" value to start with) this "business model" will do for Skoda what last Primera and Almera years were to Nissan. Small jump and then long, long spiral down. Let's pray there won't be couple of years of falling customer satisfaction surveys or another mass technical ef-up like DSG clutches to top it up.

But hey, at the end of the day, WTF do I know? I'm just a guy on the internet who refuses to pay Audi money for his favourite anonymous "mini cab" euro blandbox while watching how Skoda UK goes Jack-The-Ripper on the engine lineup, butcher factory spec, balloon prices and people feed that troll by paying Golf GTI figures for stripped down spec vRS's to do their short range Asda trips just because it can be covered out of their monthly pocket money. Let me be bitter and moany about it for a thread or two. It doesn't mean I don't like you all or that I don't enjoy our rants and banter, quite opposite - I like this forum, it's informative and diverse and most of you guys are sharp like throttle response on 2 litre TSI. I'm bitter because with this level of subprime gazoomping I will not buy another Octy and I've already met my local Seat dealer and they are absolutely terrible. I have a feeling I'm going to hate "Leon circles" with passion and was hoping that at the last minute Skoda UK would come back to their senses and bring back normal prices, if not roll out "all we have" L&K with decent pricetag before Xmas season starts. The current deal is good for you, it's bad for me, it will be terrible for both of us long term (as you will wee away shed load of money over few years and still have no car to show for it and I won't get to buy and run another Octy to the ground with my intergalactic milage).

Edited 2 October, 201312 yr by v0n

Demand has been outstripping supply for nearly a decade now. There has not been a moment in recent Skoda history where you could just walk in, order an Octavia and drive it away. The queue oscillates between few months and better part of a year, but it is always there. That's typical VAG sales model. No large incentive bonuses on targets, therefore no preregs, no fields of cars littering shores of Dagenham, no fake fleet orders and massive discounts on last years cars with second owner in V5 and 0 miles on the clock. Short supply, precise production numbers, no surpluses. That never stopped Skoda doing realistic discounts. Not to mention that over the last five years most of 0 VAT offers were coupled with 0 finance as well if you had hefty deposit and wasn't just a penny a month dreamer.  They do not "sell". They rent out. All eggs in one finance basket is unsustainable long term business model because it bets all earnings against customers whose only priority is monthly rental/repayment figure. Prioritising PCP customer over long term/high mileage users is what subprime was to housing market. Majority of them have no intention of keeping the car or paying final settlement figures. Now long term keepers/cash buyers - not only did I actually pay for my car in full, but I'm in the dealership three, four times a year even with long servicing schedules. Minor/major rotation plus all liquids at least once a year. Now, the "renter" will pay tiny deposit and after they start their "from £69 a month" free finance with free servicing journey the dealerships will not see a penny from any of them. On one hand large margin negotiated but never received in full, small deposit and petit cash dosed in small drip of monthly payments, very little extras, no cash from maintenance. On the other small margin on large sum, long term maintenance contract, extended warranty. Weird priority, if you ask me.And while such business model might maintain cash flow from deposits on overinflated, unrealistic OTR prices here and now, two to three years from now it will inevitably lead to courtyards full of junk built to budget, that will have to be priced to the sky to cover the outstanding figures. They will be mostly terrible spec, with basic factory extras like cruise control missing (on what was meant to be hot hatch) and with maintenance records kept to bare minimum by both monthly sum orientated "owner" and corner cutting dealer who had to offer free servicing. And most will probably be in a state reflecting, well, a car you don't own and rented for couple of grands a year.As a result most of what "sells" now, will most likely barely meet auction or cargiant criteria, and flooding the market in fleet volumes will further destroy resale values creating the all familiar Octavia 1 second hand value implosion. And all of that while dealerships do not see a penny from "rental" customers until they bring their budget bangers back few years later and forfeit the finance under the Consumer Credit Act.Without bringing values back to realistic levels for cash and long term buyers via "VAT free" (it's not VAT free, it's not like they don't pay VAT, it's simply pricing them according to their "budget brand" value to start with) this "business model" will do for Skoda what last Primera and Almera years were to Nissan. Small jump and then long, long spiral down. Let's pray there won't be couple of years of falling customer satisfaction surveys or another mass technical ef-up like DSG clutches to top it up.But hey, at the end of the day, WTF do I know? I'm just a guy on the internet who refuses to pay Audi money for his favourite anonymous "mini cab" euro blandbox while watching how Skoda UK goes Jack-The-Ripper on the engine lineup, butcher factory spec, balloon prices and people feed that troll by paying Golf GTI figures for stripped down spec vRS's to do their short range Asda trips just because it can be covered out of their monthly pocket money. Let me be bitter and moany about it for a thread or two. It doesn't mean I don't like you all or that I don't enjoy our rants and banter, quite opposite - I like this forum, it's informative and diverse and most of you guys are sharp like throttle response on 2 litre TSI. I'm bitter because with this level of subprime gazoomping I will not buy another Octy and I've already met my local Seat dealer and they are absolutely terrible. I have a feeling I'm going to hate "Leon circles" with passion and was hoping that at the last minute Skoda UK would come back to their senses and bring back normal prices, if not roll out "all we have" L&K with decent pricetag before Xmas season starts. The current deal is good for you, it's bad for me, it will be terrible for both of us long term (as you will wee away shed load of money over few years and still have no car to show for it and I won't get to buy and run another Octy to the ground with my intergalactic milage).

At last some one else who can see PCP for what it is and how fake this 0 % as it eats up the discounts.

So if u are borrowing money to get a car you are happy to get £2-3k discount then pay interest on the borrowed amount? Good plan

The pcp suits me as Im happy to let the finance company take the loss of the depreciation on the car and Id change my car at 3 years normally anyway. 7.5% for a bank loan at a cost of around £2,500 or 0% finance costing me nothing? That 20% off saving is starting to balance up already..    £600 of free servicing. 5% off the vehicle as the dealer discount margin...   

 

The 0% offer obviously just suits some people. Id rather keep the money in the bank and use the zero cost loan option from Skoda and not have to worry about budgeting for servicing each year.

Probably been posted already, but what is the process for getting a car on a PCP, do you pay the deposit up front and start the monthlies when you pick up the car?

I planned on ordering a VRS Tsi with options but I guess i wouldn't get it till January or February by which time i would be working Monday to Friday in Aberdeen and only getting back home (Redcar) at weekends, this will probably go on till the middle of the year.

Choices to make, do I get my order in now or wait, it's not likely the 0% PCP will stay live that long.

Well Skoda have said the 0% PCP offer will go til the end of the year, so its your choice, order now, or order then, I suspect if you ordered at the end of the year the wait will be less as everyone waiting for a hatch has to wait at least util production is starting which is December for customer cars, so if you ordered now then you will be waiting til circa. February, wait til December, then possibly March, start of April presumably?!?!?

 

As for the PCP itself, minimum deposit at my dealer is £500 for them to order the car, up to 30% of the value of the car, balloon at the end is around 45-50% of the value of the car WITHOUT options, so in simple terms £25K car, balloon at the end £11500-£12K on a 42 month term, so split the difference by the term payments, simple really, as for options if you have £1500 worth of extras, spl;it that by 42 and add that onto the original monthly payment.

 

Options are just that options, they are personal to you and they make little or no difference to the monthly payment, so worth factoring that in to your choice.

 

Overall, the 0% is a good deal, but push your dealer for a few % on that, they should deal with that, if tehy wont then there are others that will!

The PCP deal is certainly very good value and was the reason I bought a new Octy.

 

I just went for a quote on the off chance as I was looking at a second hand car (ideally a mk2 VRS) with a budget of £13,000 to be financed by a £7000 deposit and a £6000 bank loan to be paid off over 3 years.

 

The payments on a Octy III 2.0TDI Elegance with metallic paint, spare wheel and with the same deposit on a 36month PCP with 14k pa mileage worked out less than the repayments on a £6,000 loan.

 

Without this deal I wouldn't have been able to afford a new car, with this deal it became a no brainer decision. The GFV is less than £10,000 too so if I wanted to in three years time, the final balloon payment should also be manageable, looking at the value of mk2's there should be a fair amount of value in the car.

 

Andy

Edited 2 October, 201312 yr by boff180

In case anyone doesnt know, the servicing deal is for fixed intervals only. So the dealer should be setting to 10k/1yr intervals

This has got me worried now about the delivery dates & how long it will be before I get my vRS. OK I've signed the deal, but I'd like to get rid of my car before end of November when the RFL runs out & it's due a service. 

OK.. PCP people, let's do some rough and rushed maths here.

Let's say we are going to buy new vRS estate, without any options. Let's say we are going to use RRP price of £23,970 as base. Let's say free servicing incentive is present across all options (as it normally was with 0 VAT deals for the past couple of years as well)

Mr. P. Ceepy takes advantage of the PCP at 0%. He has one grand in his pocket for deposit, with 10k per annum GFV figure of £12,050, leaving him with £10,920 to settle across 36 months of £303 payments. At the end of the deal Mr. P. Ceepy will leave £11,920 in Skoda UK pocket, and not pay the balloon sum as he still has no 12 grand handy. After soft cushioning VAG finance against inevitable depreciation to the tune of £4k a year the only option left is to embark on another PCP journey at RRP or write off nearly 12 grand and move on to bangernomic sector.

Mr. Savvy waits for 0% VAT deal. It finally arrives in January, discounting the £23,970 car by VAT amount to the sum of £19,975. He settles quarter of it as deposit, leaving him with even £15k to borrow in finance, which Skoda UK is happy to arrange at highest VAG finance rate of 7.9 APR. He's relatively good at googling so he knows the interest will be about £1,900, which means total cost of ownership will be about £22k. At the end of year three he trades the car in with Skoda, gets their own GFV value of £12,050 back and starts the whole journey again. By his calculations the car left him £9,825 out of pocket across 36 months. Or £273 a month.

Mr. Stingy holds fire and waits for the dust to settle. Once his favourite vRS arrive on 0 VAT deal he goes through broker. Broker offers him rather moderate discount of 8% lowering down the price to £18,395 and arrange the same 7.9 APR from the fleet dealer behind the broker. Similar to Mr. P. Ceepy he also has only one grand to his name, so he borrows £17,400 from VAG finance at cost of £2,200 in interest. Total cost of ownership is now roughly £20,600, which after he trades the car back to Skoda for the same £12050 means he forked out approx £8550 or £237 a month for 36 months.

What have we learned?

- With 0% VAT even if Mr.Savvy decided not to get any finance at all and paid the whole sum with credit card at 12% APR he would still be better off than Mr. P. Ceepy

- If Mr. Stingy managed to get a 14% broker discount (current carfile discount) while 0% VAT is preset he could pay the whole sum (£17,195) with the most terrible credit card at 23% APR and still be better off than Mr. P. Ceepy.

Questions or comments?

Good post with some interesting points.

 

Question: when will the VAT back offer come back with £500 contribution and free servicing if you take out the finance

 

Comment: When it does I'll have one thanks (maybe) and pay the finance off, keep the £500 and free servicing..... I could be waiting for a while though

first point - Mr Savvy appears to have an extra £3,975 of deposit compared to the other two, which will skew the figures. If you are going to compare them, compare all with the same deposit.

 

Second point - You are assuming that the PCP option achieves no discount in the Showroom, which has proven not to be the case. Again, this will skew figures slightly.

 

I think a lot of people mistake PCP for what it is as a financing option. Essentially, its an alternative to leasing (especially with the servicing included) but with the ability to build up some equity in the vehicle beyond what is owed at the end of the term.

 

Cash = You own the metal

Big Cash Deposit + Finance = Metal owned, Loan outstanding

PCP = Metal pre-rented for 36/42mths, option to purchase at agreed amount, ability to build equity beyond GMFV

Leasing = Metal rented on monthly basis, servicing at your own cost, no option to purchase, no equity gained.

 

The one you choose depends on the circumstances..... I had a car allowance to use, and wanted a hassle-free work motor with minimal risk. Once my mileage was taken into account, PCP was cheaper than leasing... job done.