I've taken a PCP deal on a new 5 door Citigo SE. It's £0 deposit and 36 x £120.

 

They would have done £0 deposit 42 x £108.

 

I don't really want a car for 42 months and not even 36 months if I can help it so I went for 36 hoping to get out of it early but part of my brain is questioning my logic. On these 0% PCP deals is it always better to go as long as you can?

 

Thanks for any advice.

 

 

I've just ordered a Rapid Sport on a 0% x 36. I didn't want longer either because you can get out of it earlier if you want.

Thanks stormchaser.

I've been used to 24 month leases but don't know if I'd get away with cancelling 12 months early on a pcp so maybe 30 months ish....I'm just wondering if I was silly not to have taken the 42 months...I suppose the future value (before GFMV date) and my needs can be affected by many unforeseen things...it just feels weird to have opted for a higher monthly figure.

like any finance the sooner you get rid of it the more chance of negative equity

 

the interest is based on the whole amount (including the guaranteed value )

 

eg,

car value = £10000,

guaranteed value at end of 36 months = 4000

 

you pay 36 payments to repay the £6000+ interest (the interest on the full £10000 - payments,)

 

if that make sense

 

at the end the equity left in the car for the deposit for your next vehicle is (current trade in value - guaranteed value)

 

the other thing to take into account is the annual mileage you declare, as that affect the guaranteed value and the equity left if you get it wrong

 

if you underestimate your annual mileage to get  cheaper monthly payment / rental, the more you exceed that by the longer you will take to reach the point of positive equity in the car

 

you could also  end up with no equity at the end of the contract (eg if you declared 5000 miles / year and actually did 20000 miles / year so at the end of 3  years you hand back a car with 60,000 miles instead of 15,000 and one worth far less

I have a friend who is a sales manager at vw and in a pcp he says you can usually change your car half way through the lease so after 18 months you are good to change.

As for the mileage, I leased mine on the mileage I do but again he's adamant that you should lease the car for about 60% of what you do and let vw pay the extra when you upgrade. I wasn't sure about this but talking to a work colleague, he has leased vws for a while now and always leases his for 8k pa and does 16k pa and he always has equity in the car when he upgrades.

Thanks both.

I believe I can "vt" half way but I've noticed the payments are such that the half way point is 36/42 months anyway no earlier.

Markyg your comments make me think I should just go for 42 as dealer will prob be able to sell me a new deal earlier anyway. I'd rather save £12 a month in the mean time...as for miles I suppose you'll tend to have equity anyway as these gmfvs seem to be purposely set at a low level.

Mines at 42 months and he still reckons at 18 months I'll be able to change if i want to.

Yeah, pcps are worked out to. Give you a bit of equity in the car as an incentive to get another one without having to pay much or any deposit.

He did also say to keep trying different deers if you can't get the deal you want and to try the same dealer a month later if you cant get the deal you want.

The dealer he works for normally look to see if they can put their pcp customers into a new car half way through a pcp anyway and will ring up offering them a better deal of either the same car for less a month or a better car for the same a monthly payment.

Daft question about a PCP so bear with me,if I wanted to buy a car on a PCP and I have a car worth,say £5000-00 in p/ex and the max' deposit I could put down on the new car is £3000-00 would the dealer take my p/ex in and put the £3K deposit down and give £2K back to me or is the deposit cash only?.Hope that's clear!.

They may not be mega keen on the idea but can't see why they won't. After all they'll still make money on the part ex. And they've still sold a new car.

Daft question about a PCP so bear with me,if I wanted to buy a car on a PCP and I have a car worth,say £5000-00 in p/ex and the max' deposit I could put down on the new car is £3000-00 would the dealer take my p/ex in and put the £3K deposit down and give £2K back to me or is the deposit cash only?.Hope that's clear!.

That's exactly what I did.

 

Fred

I had my previous Fabia on a 4 year PCP. I traded in after 18 months. Skoda gave me a settlement price that matched the outstanding finance (about £10,000) thus sweeping the slate clean, plus I got £250 on top to put as the deposit on the new car. Seemed like a fair deal to me at the time.

 

Charlie