Facelift PCP advice

[Kenny F Powers]

Hello everybody,

I was wondering whether anyone had traded in an A3 on a PCP deal before, and if so, were they in negative equity? I will be at the end of my 3 year PCP deal in August (A3 sline), and when I went in to Cardiff Audi to sort an new A3 on PCP they said I was in negative equity: car was valued at £14000, and I "owe" £14060!

I was led to believe that I would have a bit of extra money left at the end of my PCP agreement to put towards a new car, but this isnt the case. Is this normal? (PS my A3 is in good condition, with only 14000 miles on the clock after 32 months). I was hoping to have a grand or so to use as my next deposit!

 

[DrEskimo]

try different dealers. I get a range from -£2k to +£2k equity when I ring around on my S5.

Obviously make sure you are getting similar discount on any car you are trading it in against though, as its a common trick to increase the equity of the trade in, but decrease the discount on the new car.

 

[S32B]

We all hope for equity at the end, but you are best off thinking "I'm going to have nothing at the end"! Then if you do it's a bonus, but if you don't you're not upset.

Know your figures on the new car before you walk into the dealership, then get your px price that you're happy with. I always tell them to make the px and new car separate deals, that way I know exactly what I'm paying for the new one and what I'm getting for the old one. Where in the country are you?

PS: What discount % did you get on the A3 you have now?

 

[Psyman79]

When i traded in my PFL S3 saloon i was just shy of 2 years in to a 4 year pcp and pretty much broke even. Pretty sure the car was depreciating at about the same rate as i was paying it off so can't imagine I'd have ever been in positive equity.

Si

 

[lekky]

I was in negative equity too. Mainly due to the whole right side of the car having being keyed, and a less deep scratch the missus put on down the passenger side. It didn't make that much difference for me, the dealer was so desperate to keep me that they ended up putting a whole load of "dealer contribution" to the next PCP deposit.. About 6 or 7 times as much as the deposit i put down..

 

[Mark_86]

Just buy the car off the finance company at the end, sell it on for more money... even those car buying websites will give you more for it. Pay off loan etc used to purchase off finance company... use rest of money as deposit towards new car.

 

[infernox]

I actually needed some advice too. Just got my first ever PCP for a S3 SB facelift. It's an ex-demo car but really good spec and still had 5.9% interest rate. I only plan to keep the car for 1-2 years, the deal the salesmen had for me was £8k deposit and £300 monthly payments for 4 years and a GFV of £15731. I realised that for how long I want to keep the car, its actually not that good of a deal. He said £1k less deposit would mean around £25 extra monthly payment which means it should be better for me to lower my deposit. Is my thinking correct? What difference would lowering the term to 3 years or even 2 years make?

Also what are these car buying websites you mentioned? I'm sure they would give me more than Audi when its time to change.

 

[Mark_86]

I actually needed some advice too. Just got my first ever PCP for a S3 SB facelift. It's an ex-demo car but really good spec and still had 5.9% interest rate. I only plan to keep the car for 1-2 years, the deal the salesmen had for me was £8k deposit and £300 monthly payments for 4 years and a GFV of £15731. I realised that for how long I want to keep the car, its actually not that good of a deal. He said £1k less deposit would mean around £25 extra monthly payment which means it should be better for me to lower my deposit. Is my thinking correct? What difference would lowering the term to 3 years or even 2 years make?

Also what are these car buying websites you mentioned? I'm sure they would give me more than Audi when its time to change.

Like 'webuyanycar.com'...

 

[lekky]

I actually needed some advice too. Just got my first ever PCP for a S3 SB facelift. It's an ex-demo car but really good spec and still had 5.9% interest rate. I only plan to keep the car for 1-2 years, the deal the salesmen had for me was £8k deposit and £300 monthly payments for 4 years and a GFV of £15731. I realised that for how long I want to keep the car, its actually not that good of a deal. He said £1k less deposit would mean around £25 extra monthly payment which means it should be better for me to lower my deposit. Is my thinking correct? What difference would lowering the term to 3 years or even 2 years make?

Also what are these car buying websites you mentioned? I'm sure they would give me more than Audi when its time to change.

I got a brand new A3 Saloon 1.4 TFSI S-Line in Daytona Grey last week. £500 deposit from me and £345 a month for 4 years. I part ex-d the previous 4 year old 1.6 TDI Sportback in black. But didn't have any equity in it.

 

[infernox]

Like 'webuyanycar.com'...

Lol I know that one and evans halshaw. I remember I saw on another thread someone mentioned shaks specialist cars and another one. On autotrader they sell their cars way overpriced so I'm guessing they'll give good money for it.

I've been trying to do some calculations of what would be best for me but I'm missing the GFV for 36, 30, 24 and 18 months.

 

[AudiNutta]

Hello everybody,

I was wondering whether anyone had traded in an A3 on a PCP deal before, and if so, were they in negative equity? I will be at the end of my 3 year PCP deal in August (A3 sline), and when I went in to Cardiff Audi to sort an new A3 on PCP they said I was in negative equity: car was valued at £14000, and I "owe" £14060!

I was led to believe that I would have a bit of extra money left at the end of my PCP agreement to put towards a new car, but this isnt the case. Is this normal? (PS my A3 is in good condition, with only 14000 miles on the clock after 32 months). I was hoping to have a grand or so to use as my next deposit!

Send me a PM, I can put you in touch with the right people at Cardiff Audi to get you the best deal.

 

[David McQueen]

I was in 2500 negative bit this was purely due to trading in 18 month before my term ended bit because i ended up taking a brand new a3 sportback with a few extras the wiped it and started fresh on the new car !


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[AudiNutta]

I was in 2500 negative bit this was purely due to trading in 18 month before my term ended bit because i ended up taking a brand new a3 sportback with a few extras the wiped it and started fresh on the new car !


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Really? You sure they didn't take it out of your deposit or add the negative equity to your new finance?!

I've ended two 4 year lease deals after 10 & 15 months now and I have never been able to get rid of the negative equity. First time Audi were naughty and added the negative equity to the finance agreement. Next time it was taken out of my deposit.

 

[David McQueen]

Really? You sure they didn't take it out of your deposit or add the negative equity to your new finance?!

I've ended two 4 year lease deals after 10 & 15 months now and I have never been able to get rid of the negative equity. First time Audi were naughty and added the negative equity to the finance agreement. Next time it was taken out of my deposit.

Yeah pretty sure but they did give me a decent deposit contribution aswell which a think was what covered the negative equity, the car i got was also a cancelled order but was everything i wanted colour model and extras a hadnt thought of so was deleted with it!


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[David McQueen]

Delighted***


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[AudiNutta]

Yeah pretty sure but they did give me a decent deposit contribution aswell which a think was what covered the negative equity, the car i got was also a cancelled order but was everything i wanted colour model and extras a hadnt thought of so was deleted with it!


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Sounds like that's what covered it. It's all incorporated into the finance deal, on the invoice you will see the deposit and then the negative equity to be paid and it all comes out to the end sum which you loan.

 

[David McQueen]

Sounds like that's what covered it. It's all incorporated into the finance deal, on the invoice you will see the deposit and then the negative equity to be paid and it all comes out to the end sum which you loan.

Yeah told them specifically that i wouldnt take a car with negative equity as the cash price was bang on with extras the car had and deposit contribution, no doubt will be back in before a can trade in again looking for another one lol


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[AudiNutta]

Yeah told them specifically that i wouldnt take a car with negative equity as the cash price was bang on with extras the car had and deposit contribution, no doubt will be back in before a can trade in again looking for another one lol


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Negative equity is going to be a big issue for me. My S3 was new in October, I am looking at the new RS3. I've told the centre as soon as they can get me out of the S3 with no negative equity I will finalise an order, put it back in their laps but otherwise will probably be next year before I take delivery.

 

[lekky]

How do the garages react to ending your PCP/HP early? I just took out a 4 year one. Do you guys usually trade it back in before the full period?

 

[BowkA86]

How do the garages react to ending your PCP/HP early? I just took out a 4 year one. Do you guys usually trade it back in before the full period?

You can trade in at anytime...1 day, 1 week, 1 month...whenever.

As long as the full amount owed on finance is paid off. So technically, you could change every week.

 

[Tom.H]

How do the garages react to ending your PCP/HP early? I just took out a 4 year one. Do you guys usually trade it back in before the full period?

I was told by the dealer and my brother by year 3 they're usually ready to go and the dealer will be offering you something else (that's on a 4 year term)

 

[lekky]

You can trade in at anytime...1 day, 1 week, 1 month...whenever.

As long as the full amount owed on finance is paid off. So technically, you could change every week.

I thought you were able to leave half way through the finance agreement regardless of how much had been paid off without having to pay anything? Question was more around when people tend to do it, i.e. half way through or always get into the 3rd/4th year.. (this is only my second PCP...)

 

[BowkA86]

I thought you were able to leave half way through the finance agreement regardless of how much had been paid off without having to pay anything? Question was more around when people tend to do it, i.e. half way through or always get into the 3rd/4th year.. (this is only my second PCP...)

When you say "halfway through", you are correct. But not half way through the term...its when you have paid half of what you brought the car for (including interest).
Then you can give it back and walk away. Do it too many times and you may find it difficult to get finance for a car, particularly that brand.

 

[lekky]

When you say "halfway through", you are correct. But not half way through the term...its when you have paid half of what you brought the car for (including interest).
Then you can give it back and walk away. Do it too many times and you may find it difficult to get finance for a car, particularly that brand.

Ah thanks, yeah that's clearer.

 

[David McQueen]

How do the garages react to ending your PCP/HP early? I just took out a 4 year one. Do you guys usually trade it back in before the full period?

You may be able to change car at around the 3 year mark when on a 4 year pcp, if you are just shy of the settlement figure they may add this onto the next car which a would advice not to do, or if they want a sale can offer deposit contributions instead to cover the negative. Also you could pay the difference yourself if you really wanted to change car!


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[BigBill]

Putting a higher deposit in up front will make it less likely that you would be in negative equity if trading in early for the simple reason that you are borrowing less so your settlement fee will be lower. If you put in a lower deposit with higher monthly payments then the settlement fee would initially be higher but it would get closer to the high deposit/lower monthly option as you went through the term until it would be the same at the end of the term whether that be 24,36,48 months etc

Couple of things to remember is that if you settle early having made higher deposit you are only saving the interest payments as you have already made a higher payment up front and also that although making a higher deposit makes it less likely you will be in negative equity if settling early, it doesn't guarantee this as there are a few variables to consider eg used car prices at that time. The only time on a pcp that you are guaranteed not to be in negative equity is if you let it run the full term subject to condition and/or any mileage limitations.

 

[infernox]

Couple of things to remember is that if you settle early having made higher deposit you are only saving the interest payments as you have already made a higher payment up front and also that although making a higher deposit makes it less likely you will be in negative equity if settling early, it doesn't guarantee this as there are a few variables to consider eg used car prices at that time. The only time on a pcp that you are guaranteed not to be in negative equity is if you let it run the full term subject to condition and/or any mileage limitations.

I agree with everything you are saying. I do think Audi price their Optional Final Payment/GFV so low that you can pretty much always have positive equity with a big deposit. For example, I just done a deal on a car today and the highest GFV they could give on a 24 month, 6,000 annual mileage PCP was £20,900. This is on a 66 plate S3 facelift S-tronic Sportback with a lot of options. Now if you check autotrader, the cheapest S-tronic S3 Sportback is a 63 plate one with 77k miles for £20k, so I find it insane that in 24 months, a 2 and a half year old S3 with under 17k miles and a lot of options would be worth £20,900. For comparison/estimation sake, the cheapest 2 and a half year old S3 (64 plate) with under 17k miles is selling at £25k and that has barely any options, so I'm fairly sure at that point that I'll have positive equity.

 

[DrEskimo]

I agree with everything you are saying. I do think Audi price their Optional Final Payment/GFV so low that you can pretty much always have positive equity with a big deposit. For example, I just done a deal on a car today and the highest GFV they could give on a 24 month, 6,000 annual mileage PCP was £20,900. This is on a 66 plate S3 facelift S-tronic Sportback with a lot of options. Now if you check autotrader, the cheapest S-tronic S3 Sportback is a 63 plate one with 77k miles for £20k, so I find it insane that in 24 months, a 2 and a half year old S3 with under 17k miles and a lot of options would be worth £20,900. For comparison/estimation sake, the cheapest 2 and a half year old S3 (64 plate) with under 17k miles is selling at £25k and that has barely any options, so I'm fairly sure at that point that I'll have positive equity.

Ah yes...but this assumes your trade in price at 24months will be anything reflective of the amount you can sell it for as a car dealer.

They will only give you the lowest trade price based on a big standard S3, which will be in the order of a good few thousand less than what they have them up for sale at...!

As an example, my S5 GFV is £27k with 20k miles and 2yrs old. I'm now only 11k miles on the clock and 18months in and one dealer had the cheek to offer me £26k as trade in for it.....he thought I was stupid enough to pay £2k to trade my S5 in early and then get an S3 on similar payments...!

More realistic valuations have been around £30k, which is still pretty disappointing...!at least it's a bit of positive equity, but no where near the amount they spin it when trying to get you to sign up.

And remember, any positive 'equity' in reality is just money you've already paid extra, due to the act that the GFV was set too low...!

 

[infernox]

Ah yes...but this assumes your trade in price at 24months will be anything reflective of the amount you can sell it for as a car dealer.

They will only give you the lowest trade price based on a big standard S3, which will be in the order of a good few thousand less than what they have them up for sale at...!

As an example, my S5 GFV is £27k with 20k miles and 2yrs old. I'm now only 11k miles on the clock and 18months in and one dealer had the cheek to offer me £26k as trade in for it.....he thought I was stupid enough to pay £2k to trade my S5 in early and then get an S3 on similar payments...!

More realistic valuations have been around £30k, which is still pretty disappointing...!at least it's a bit of positive equity, but no where near the amount they spin it when trying to get you to sign up.

And remember, any positive 'equity' in reality is just money you've already paid extra, due to the act that the GFV was set too low...!

Well if I put the car I'm talking about on autotrader into the Audi.co.uk part exchange valuation, it comes up with a £23,150 part exchange value. I get your point though, if I had to guess, they probably paid the guy £21-22k for it. I just remember someone here was talking about an agency or another garage buying it off of them when they put their S3 up for sale on autotrader. With the high deposit, you pretty much start off with a positive equity as you say, since the settlement balance at day 1 is less than the cars value. I did some calculations and paying a high deposit does end up being cheaper but it doesn't take into account the time value, i.e. would you rather pay £1000 less deposit now but have to pay £1050 more in 24 months? The value of the car will stay the same regardless of what you pay monthly or how high the deposit is.