Solutions PCP quote - is it reasonable?

[TheRobinK]

17 hours ago, silver1011 said:

Skoda UK are well known to under inflate their balloon payments, this is deliberate to ensure there is equity in the car at the end of the term, which they can arm themselves with to roll you into another lucrative PCP.

 

That is exactly what a old school friend contact who has worked for VWFS and Skoda Ireland told me (at least, 3 years ago it was).

 

I've just paid the balloon payment on my wifes Up!  That payment was about half the cars current market value. As the guy I dealt with told me last week, most people roll into a new car and keep the "deal going" as they don't want/cant get the balloon money. I'm weird and I had it.

 

I didn't need to PCP the car. I did it because the interest rate was 1.9% - 5% less than the bank at the time - and the dealer gave me extras plus thousands more on the value of the part exchange car.  It was all about getting you into the VAG product with a view to making it attractive to stay/hard to leave at the end of the deal.  Cash was almost dirty and undesirable as I remember it. The dealer kickbacks for signing you up must have been good.

[silver1011]

On 20/08/2018 at 16:03, mrrollout said:

Will hang on a while longer in case @silver1011 or anyone else has a suggestion as to what target Used Car price I should try and get it down to. 

 

It's always difficult to put a price on a used car as there are lots of variables. The shortage of choice due to the WLTP issues, the long production lead-times and the fact that the Kodiaq gets rave reviews is keeping used prices high, for now.

 

The current screen price of £30,995 isn't a mile off, if you take a look on Autotrader there are a couple of diesel DSG Edition's with less than 1,000 miles on them at £29,000 and £29,495. It is likely you'd be able to knock another £500 off if you're lucky.

 

A 150PS @ £29K...

 

 

And a 190PS @ £29.5K...

 

 

I'd therefore be pushing for a chunky discount off the car you're looking at, unless there is more to it that justify's the higher price.

 

If they are prepared to lower the APR (unlikely I reckon) then this might help to offset the price difference somewhat.

 

[mrrollout]

On 19/08/2018 at 15:12, MattEds said:

You can probably do the same pcp withdrawal trick as many on here have done and replace with a personal loan at 2.8%.

 

@MattEds and @silver1011: Just to clarify how this PCP withdrawal trick works... you take out a personal loan, arrange your PCP with the dealer, call up the next day and cancel the PCP deal and pay off the settlement in one sum with the loan.

 

That settlement... Is that Deposit + Charges + Sum of Monthly Repayments over the PCP term only? Or does the settlement include paying off the GMFV too?

 

I know @WiggosSideburns warned you're liable for the full cost of the car, but I just wanted to clarify whether that did indeed mean paying off the GMFV with the loan.

[Yogi-Bear]

1 minute ago, mrrollout said:

I just wanted to clarify whether that did indeed mean paying off the GMFV with the loan.

 

Yes - if you pay off the PCP, you have to pay off the entire loan, including the balloon payment. So if the car is worth less than the GMFV at the end of the period, you have no option as you are still liable to pay the whole bank loan. With PCP, you can (subject to mileage and condition) simply hand the car back and walk away / start a new PCP on a new car.

 

If you have no intention of changing cars at the end and are going to keep it, then a PCP deal won’t be the cheapest way to finance it, and switching to a lower interest bank loan is almost certainly going to cost you less in total.

[MrTrilby]

On 19/08/2018 at 21:11, MattEds said:

Im pretty sure that the GMFV is fixed at the level of depreciation they expect over the time frame. I don’t think it’s negotiable.

 

 

The GMFV is absolutely negotiable. When we bought ours we had the choice of a lower GMFV to minimise the amount of interest we paid over the life of the loan, or a higher GMFV to minimise the monthly payments. 

[silver1011]

11 minutes ago, mrrollout said:

 

@MattEds and @silver1011: Just to clarify how this PCP withdrawal trick works... you take out a personal loan, arrange your PCP with the dealer, call up the next day and cancel the PCP deal and pay off the settlement in one sum with the loan.

 

That settlement... Is that Deposit + Charges + Sum of Monthly Repayments over the PCP term only? Or does the settlement include paying off the GMFV too?

 

I know @WiggosSideburns warned you're liable for the full cost of the car, but I just wanted to clarify whether that did indeed mean paying off the GMFV with the loan.

 

Yes, you need to pay off the whole lot, but as your paying off the finance you don't pay the 'charges' i.e. the interest Skoda would charge you over the term. Your paying all of the monthly payments and the balloon payment.

 

1) Arrange the cheapest loan you can for the same amount as the credit agreement with Skoda Finance is for, here is my example...

 

 

 

Which tallies up with my calculations for my car, "Amount to Finance" (row 17)...

 

 

2) Go collect the car.

 

2) Sign the paperwork. You may have already done this electronically online in the days / weeks before collecting the car.

 

3) Register online and create an account with Skoda Finance to view your documents. If you signed for the car online then you'll have been offered the chance to do this at the time. This is optional, but it's nice to have all your documents stored in one place. All my previous Skoda finance agreements are all in my account, dating back to 2009.

 

https://www.skodafinance.co.uk/en/private_customers.html

 

 

4) As soon as you have your agreement number (if you signed for the car electronically you might already have it by this stage i.e. before you collect the car), and the dealer and Skoda UK have set it all up (can take up to 24 hours), ring Skoda Finance up and ask to exercise your "right of withdrawal".

 

They'll confirm the amount over the phone, the quicker you do it the less interest they add on, it is accrued daily, I paid nothing :-) and they'll send it in writing through the post.

 

Once they tell you the amount it is frozen for 30 days, giving you time to settle.

 

5) Use the bank account number and sort code provided by Skoda (on my email from them above) and balance transfer your pre-arranged personal loan across to Skoda's account.

 

6) A few weeks later you'll receive a letter from Skoda confirming they have no more financial interest in the car, it's all yours.

 

7) Enjoy!

 

 

[Yogi-Bear]

35 minutes ago, MrTrilby said:

The GMFV is absolutely negotiable. When we bought ours we had the choice of a lower GMFV to minimise the amount of interest we paid over the life of the loan, or a higher GMFV to minimise the monthly payments.

 

Surely within certain bounds though... otherwise I'd go for a GMFV of 100% of cost, and pay nothing but interest - then hand back at the end .

[MattEds]

5 hours ago, MrTrilby said:

 

The GMFV is absolutely negotiable. When we bought ours we had the choice of a lower GMFV to minimise the amount of interest we paid over the life of the loan, or a higher GMFV to minimise the monthly payments. 

 

Well every day is a school day! I wish I’d known that before I put down my £500!

[MrTrilby]

1 minute ago, MattEds said:

 

Well every day is a school day! I wish I’d known that before I put down my £500!

 

You change the details of the finance agreement right up to the point you sign it. We changed the GMFV on ours at about 11am, signed the agreement electronically over lunch, and picked up the car at 4pm

[MattEds]

16 minutes ago, MrTrilby said:

 

You change the details of the finance agreement right up to the point you sign it. We changed the GMFV on ours at about 11am, signed the agreement electronically over lunch, and picked up the car at 4pm

 

Again, excellent to know!  Thanks - hopefully picking up Sept 1st so a bit of time to wrangle.

[snowjoe]

Pretty sure the amount of interest you pay is not affected by the GMFV. You take a loan for £x, interest is calculated based on that. It is then split into monthly payments and balloon payments at the end. The higher the GMFV the lower the monthly payments and vice versa. Put the total amount you pay remains the same. 

 

The only way to reduce interest is to increase the deposit which reduces the amount of money you borrow.

[MrTrilby]

27 minutes ago, snowjoe said:

Pretty sure the amount of interest you pay is not affected by the GMFV. You take a loan for £x, interest is calculated based on that. It is then split into monthly payments and balloon payments at the end. The higher the GMFV the lower the monthly payments and vice versa. Put the total amount you pay remains the same. 

 

The only way to reduce interest is to increase the deposit which reduces the amount of money you borrow.

 

That's wrong I'm afraid. You pay interest on the whole amount owed, and it is compound interest. The size of the GMFV does affect the total amount of interest you pay over the life of the loan. Say you borrow £15k over three years:

 

Option 1 with £5k GMFV, means that you're paying interest on £5k for the entire three years, and interest on £10k that is gradually reducing to zero over the 3 years. 

Option 2 with £10k GMFV, means that you're paying interest on £10k for the entire three years, and interest on £5k that gradually reduces to zero.

 

So the bigger the GMFV the more interest you end up paying because you don't pay any of that capital down until the very end of the loan period. The finance person at the dealership ought to be able to provide you with comparable quotes and show you the exact difference for the amounts you're intending to borrow.

 

We went with a higher GMFV simply because of the uncertainty of residuals on diesel cars, and I preferred that VWFS takes the risk rather than us. If things end up looking better, I can always pay it off early. Another option that they don't shout about is that you can over pay during the loan period and reduce the interest that accumulates, provided you don't reduce the monthly payment below £50. So that leaves you with just the £50 a month repayment, and the GMFV to pay at the end.

[snowjoe]

Good to know, thanks. I’m impressed if you were able to change the GMFV by £5k

 

I withdrew from my latest PCP immediately and kept incentives. Having had about 4 of them over the last few years on various cars. They make more sense on small cars with when you do low mileage. The dealers want your car at then end as they are very sellable stock but anything big (and diesel) and high mileage it now seems best to run them to the end of their useable life. 

 

The best way way to avoid the high interest is a bank loan. I saved almost £2k that way but it’s dependent on your ownership plans

[mrrollout]

11 hours ago, MrTrilby said:

 

The GMFV is absolutely negotiable. When we bought ours we had the choice of a lower GMFV to minimise the amount of interest we paid over the life of the loan, or a higher GMFV to minimise the monthly payments. 

 

Morning Mr. Trilby That's really interesting to know. So in theory, does this mean that if I sign up to a higher GMFV with a higher interest charge, then pull off the PCP withdrawal trick the day after... I could actually save on paying all that interest?! Or is that too good to be true?

 

@silver1011: How did you negotiate £2900 off on top of the £2000 dealer contribution? I'll be trying to see if they add the same contribution to me buying a Used.

[shyVRS245]

Never have I read so much waffle from so many people. In simple terms 7.3APR is high because technically this is a used car.The real cost to you in finance over 4 years is difference between total cost including your deposit (£36,866) and GFV figure (£14,107).

Therefore total cost to you is £22,759 or £474 per month, which seems expensive.

[Yogi-Bear]

3 hours ago, shyVRS245 said:

Never have I read so much waffle from so many people.

 

Welcome to the Internet... you must be new here .

[silver1011]

11 hours ago, shyVRS245 said:

Never have I read so much waffle from so many people.

 

If we're being like that, then I've never seen vRS incorrectly represented so many times 

 

[silver1011]

13 hours ago, mrrollout said:

 

@silver1011: How did you negotiate £2900 off on top of the £2000 dealer contribution? I'll be trying to see if they add the same contribution to me buying a Used.

 

The £2,000 is from Skoda UK and is available to anyone financing a brand new car using Skoda Finance.

 

The £2,900 was the dealers discount, which was down to negotiation.

 

It cost me half a day on the phone, playing a number of dealers off each other, using the best carwow quote as a starting point.

 

I deliberately left it until the last few days of March (end of the 1st quarter) knowing the dealers would be more willing to make less profit from me in order to hit their targets and receive their rebates back from Skoda UK.

[shyVRS245]

11 hours ago, silver1011 said:

 

If we're being like that, then I've never seen vRS incorrectly represented so many times 

 

MORE WAFFLE

[silver1011]

Lol, forums aren't for you. Try reading a book 

[shyVRS245]

30 minutes ago, silver1011 said:

Lol, forums aren't for you. Try reading a book 

That's your tenth thread to answer the OP's simple question. Is he being asked to pay too much and most answers seem to be the same i.e. Yes! PS most Vrs245 owners know we have bigger badges than 220/230 owners not through choice just Skoda way of differentiating our higher spec cars from those that went before and to make us feel better about spending the extra £2,500 assuming we didn,t lease.

[silver1011]

What did you just write? All I see is waffle!

[mrrollout]

Hello again,

 

Another question - can this PCP withdrawal trick work on any PCP arrangement, or is it just with Solutions? For example if I wanted a Skoda on sale at a Peugeot dealer, then could I still pull of a PCP withdrawal if I take out the deal with Peugeot's own finance arm (PSA Finance)?

[silver1011]

Yes, a colleague at work just did it with Mini.

 

The 14 day cooling off period, without penalty, is enforced by law via the Consumer Contracts Regulations...

 

http://www.legislation.gov.uk/uksi/2013/3134/made

 

From PSA Finance...

 

Withdrawing from your Finance Agreement
 
Any vehicle ordered online must be financed through a Passport or Passport with Just Add Fuel® finance agreement. You acknowledge that the finance agreement is a credit agreement.
 
You have the right to withdraw from your finance agreement within 14 days from the day after signing the agreement. If you exercise your right to withdraw, you must notify PSAF immediately in writing or by telephone and you understand that you must repay to PSAF the amount of the credit under your finance agreement, plus interest at the rate specified in your finance agreement, within 30 days. Only if you do so will the vehicle become yours. You do not need to tell us why you have decided to withdraw and we will not ask you for your reason.
 
You acknowledge that your right to withdraw from the finance agreement is your only right if you do not wish to proceed with the finance agreement, and that consumer laws relating to off-premise or distance sales do not provide a right of cancellation in respect of credit agreements. This means that you cannot return the vehicle after delivery or collection for a refund if you change your mind. This does not affect your statutory rights as a consumer if the vehicle is faulty, does not meet its specification or otherwise.

 

https://offers.peugeot.co.uk/legal-info

 

Edited 13 September, 2018 by silver1011