So youre saying that it doesnt matter if the deposit is small or large?
Yup. You will actually pay less (slightly) by putting in a bigger deposit because you are borrowing less. But it's only slightly less.
Eg. A standard hatchback S3 S tronic with no options will cost £33,840, will include a £2300 contribution from Audi and on a 24months PCP with 5,000 miles will have a GFV of £21,427.
If I put £5k deposit I would make 23 payments of £349.07. This would mean I pay £8028.61, which plus my £5k deposit would mean I spent a total of £13,028.61.
Now if I put £10k deposit I would make 23 payments of £117.72. This would mean I pay £2,707.56, which plus my £10k deposit would mean I spent a total of £12,707.56.
As you can see, you actually save £300 odd by putting in a higher deposit.
Hope that helps. Oh and before anyone says otherwise, it makes absolutely no difference if you trade the car in early (i.e. 8months in). Both a high and low deposit scenario still will result in a very similar amount paid.
Only things that matter are the price of the car, the GFV and the APR. You can't control the APR or GFV so get that price of the car down!!
Where an argument for a lower deposit can be made is that you can always increase the upfront payment (prefer to call it this rather than a deposit...!). You cant however, take money back. So if you find you can't afford the monthlies, you stick more money in and reduce it. However if you put as low as possible, you can use the money for other things. My argument though, is that any money you hold back, you are effectively borrowing at 6.3% APR, which is double what you could get from a bank...
Also, investment at the moment isn't exactly great so reducing the interest and reducing high interest debt is a good way to save money...
