Audi S4 Avant PCP Deal - opinions

[richardshoes]

Hi there,

Audi code A32WM7CF

uk.audi.com/A32WM7CF

10k miles per year

The best quote I can get is £5000 down and £494PCM for a 48month deal.

Does this sound like a good deal?

Thanks for opinions.

 

[Daggerit]

Don't know, all I can do is compare to mine:

Audi code A8WX6BV7

I'm putting £2000 down and then £640 a month with same miles and term as you...


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[Keef]

Best to work out what they are actually discounting the car by?
All my pcp deals have been over 3 years, but if I was going for 4 years I would want the extended warranty for the 4th year.

 

[Spaceman_RS3]

Yea that's a nice bad deal with your price maybe 500 init from mine around 15%

 

[DrEskimo]

According to Coast2Coast, you can expect about 16.5%. So with £5k deposit @ 10k miles over 48months, I'm getting monthlies of around £475pm.

Certainly not a million miles away mate

 

[5pot]

If it looks anything like this then yeah it's a good deal.
Gfv is off the Audi finance site
Part exchange value is the discount on top of the dealer contribution

 

[QTNC]

Don't know, all I can do is compare to mine:

Audi code A8WX6BV7

I'm putting £2000 down and then £640 a month with same miles and term as you...


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£3,200 down and £574 a month (see signature for spec)

HOWEVER, they just asked me for an extra £800 for the tax hike, something that was categorically waived by the sales guy (now left) when it was clear the car wasn't going to make the March delivery on the order sheet.

Anyone else had this?

 

[GStatus]

Not sure what the advantages of finance vs. leasing with the deals I'm seeing above. Very pricy and a big balloon at the end...

 

[EddieRS3]

PCP, you own the car. You can modify it, sell it at any time, do what you want etc. If you go over mileage allowance it doesn't matter unless you just want to give the car back etc

 

[Spaceman_RS3]

Plus the lease price rockets soon as y I start adding options fine if you take what you get.

Should have something in a pcp car towards the next deposit and I'm pretty sure no one ever pays the balloon payment .

 

[GStatus]

Mmmm you don't 'own' anything until the full balance is settled but fair play.
Pros/cons!

 

[DrEskimo]

PCP, you own the car. You can modify it, sell it at any time, do what you want etc. If you go over mileage allowance it doesn't matter unless you just want to give the car back etc

Not exactly mate.

You don't own the car, and technically, can't modify it. The terms of the contract are that it is kept under warranty, and modifications will void this warranty. By doing so, you are in breach of this contract agreement.

If something goes wrong due to a modification, not only are you liable for footing the bill due to the warranty being void, but also either paying the full balance or fixing it, returning it to stock and handing it back.

Bang on about selling/trading it in whenever you like, and not being tied so strictly to mileage limits. Of course going over the mileage limit will result in lower trade in.

 

[GStatus]

Well said ^

I ordered S4 saloon
I'm paying 380 a month for 23 months + 2k upfront.
10k miles pa
No road tax

Virtual cockpit
Bang and olufsen
Piano black Inlay
Extended LED
Flat bottom

Either way, each to their own I guess!

 

[Alexander Thomson]

Audi finance (read pcp) deals are structured in a way that means you're likely paying off more than it's depreciating by so they can call you after 2 years and offer a new model / FL for the same money, on the proviso you sign a new 3/4 year contract of course.

I've traded in my focus st vs the S4 - I had £1500 equity in the car because I was paying it off faster than it was depreciating - meant that the £1.7k I put down on the focus was almost recouped in full. If the ST was leased, the lease company would have poketed the £1.7k.

Got to admit, there are some excellent deals for the S4 going around just now; maybe indicates confidence in the predicted residual value of the car?

 

[Daggerit]

Slightly off topic but it might fall in a bit with buying a new car on PCP...

Has anyone taken out a service plan? I was quoted around £26 or £28 a month for the most basic of the three options but I'm sure that someone on here had gotten one for £18? Mine was from Aberdeen Audi and I'm not sure if they're taking the **** or not.

From the miles and type of driving I'll be doing I'd be on the fixed servicing so 9k services but I'm just not sure if it's worth it at almost £340 a year?

 

[Kestrel]

Yes I took one out when I ordered my car.
Its for 3 annual services and I'm paying £28.66 per month for 30 months.

 

[Daggerit]

Yes I took one out when I ordered my car.
Its for 3 annual services and I'm paying £28.66 per month for 30 months.

That's basically the same as I've been quoted for the S4 for 48 months. I'm not sure if it's worth it or not though as I've no idea what the servicing costs actually are (as I've always just taken out the service package!)...

 

[DrEskimo]

My B8.5 S5 first oil service was £250. Reckon the second will be in the region of £350. Different dealers will give you different prices though.

 

[D7Abbott7]

Hi I've noticed you've got the options;

Audi virtual cockpit £250
Extended led interior £100
Matrix headlights £650

These cost £1000
But if you selected them in the light & vision pack (which they're all in) they'd only be £750.

 

[Daggerit]

Hi I've noticed you've got the options;

Audi virtual cockpit £250
Extended led interior £100
Matrix headlights £650

These cost £1000
But if you selected them in the light & vision pack (which they're all in) they'd only be £750.

That referring to my build? I just listed them separately but do have the pack selected in reality.


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[D7Abbott7]

Ah that's cool then wanted to make sure you wasn't paying Anymore than you should

 

[Daggerit]

Cheers for looking out for me.


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[Simonb1975]

Is the light and vision pack on the configurator again?

 

[Daggerit]

Appears to be on the S4 but no other models...


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[SINGHY]

Hi there,

Audi code A32WM7CF

uk.audi.com/A32WM7CF

10k miles per year

The best quote I can get is £5000 down and £494PCM for a 48month deal.

Does this sound like a good deal?

Thanks for opinions.

PCP doesn't appeal to me, in this case you'll have paid £29000 and at the end of 4 years have nothing to show for it? I know many folk do it and when I bought both my last 2 cars the dealers tried convincing me it was the way to go until I showed them my sums.

 

[cuke2u]

That's not strictly correct as most do not pay the final settlement figure. For example, I purchased a A3 Saloon for £27,00 using a deposit of £2000 and the monthly payments were £370 a month. Even if I kept the car for the whole term, which I didn't, I would have paid back £19760. I then gave the car to a dealership and they settled the final amount.
If I had tried to do the same on hire purchase it would have cost me £556 per month. A PCP is just a way to get into a car you otherwise would not be able to afford and they are aimed at low deposits.

 

[Alexander Thomson]

That's not strictly correct as most do not pay the final settlement figure. For example, I purchased a A3 Saloon for £27,00 using a deposit of £2000 and the monthly payments were £370 a month. Even if I kept the car for the whole term, which I didn't, I would have paid back £19760. I then gave the car to a dealership and they settled the final amount.
If I had tried to do the same on hire purchase it would have cost me £556 per month. A PCP is just a way to get into a car you otherwise would not be able to afford and they are aimed at low deposits.

When you say they're aimed at low deposits, what do you mean? Surely the lower the deposit, the more interest you pay, as you're borrowing more? We've gone for a fairly highly deposit (£7k) which brings the monthly payments down to a reasonable number (£388) but also gives us the flexibility of handing the car back mid-term if needed, as we'll likely be in positive equity for the duration of the finance.

To put it into context, if you borrow £10k over 4 years @ 4% APR, the £10k turns into £11.7k after interest, so if you had the money lying aroud, you might as well plug it into the car as a deposit to avoid paying interest on it, and go on holiday with the £1.7k you saved.

Totally agreee that the point of PCP is to get you a car that you ordinarily wouldn't be able to afford. Part of me sees this as a bit irresponsible and definitely smells of the sub-prime mortgage nonsense that tripped everyone up in 2007...but the other part is saying stuff it and look forward to enjoying your £50k car that you otherwise wouldn't have

 

[Daggerit]

When you say they're aimed at low deposits, what do you mean? Surely the lower the deposit, the more interest you pay, as you're borrowing more? We've gone for a fairly highly deposit (£7k) which brings the monthly payments down to a reasonable number (£388) but also gives us the flexibility of handing the car back mid-term if needed, as we'll likely be in positive equity for the duration of the finance.

To put it into context, if you borrow £10k over 4 years @ 4% APR, the £10k turns into £11.7k after interest, so if you had the money lying aroud, you might as well plug it into the car as a deposit to avoid paying interest on it, and go on holiday with the £1.7k you saved.

Totally agreee that the point of PCP is to get you a car that you ordinarily wouldn't be able to afford. Part of me sees this as a bit irresponsible and definitely smells of the sub-prime mortgage nonsense that tripped everyone up in 2007...but the other part is saying stuff it and look forward to enjoying your £50k car that you otherwise wouldn't have

I think what he means is if you can afford the higher monthlies it allows for a comparatively low deposit to be put down.

For mine I could've put down an additional few thousand deposit but doing the math with the reduced monthly payments I actually lose money over the payment term doing that. So the lower deposit worked out better over 48 months outright.


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[Alexander Thomson]

I think what he means is if you can afford the higher monthlies it allows for a comparatively low deposit to be put down.

For mine I could've put down an additional few thousand deposit but doing the math with the reduced monthly payments I actually lose money over the payment term doing that. So the lower deposit worked out better over 48 months outright.


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Makes sense, thanks for explaining.

Struggling to see how putting a larger deposit in actually increases the overall money paid for you? if you added say £3k to the deposit, would that not be £3k that you weren't paying interest on for the 48 months?

With PCP, everything is linked:

GFV (guaranteed future value, basically Audi's predicted value of your car at the end of the 36/48 months) is fixed by Audi Finance (although can be lowered if you want to pay more off)

Monthly Payments = (sale price of car - (your deposit + dealer\manufacturer contributions)*interest) - GFV / number of months

That formula looks horrendous but it's essentially the cost of the car, minus deposits, plus interest, minus predicted value, divided by number of months. If any of those factors change, it will change the outcome of the monthly payments. Variables could be:

Deposit(s) go up, monthly goes down or vice versa.

Interest goes up, monthly goes up, or vice versa

GFV goes up, monthly goes down, or vice versa

Number of months goes up, monthly goes down (but not in a linear way due to interest calculations)

Of course, sale price up/down will affect it too.

Hope i'm not preaching on here; I really blitzed my knowledge of the product before going for my last car, makes discussions with the dealer far more balanced when they realise that you know at least a bit about what you're signing for.

In your case Daggerit, what part of the setup changed to make it cost more? Take the (purely theoretical) £3k example, if you put an extra £3k down, you're actually making the total amount paid less, due to it being £3k * 4% APR * 4 years = roughly £3,500, so you'd save £500 by doing so. So unless you can leverage your £3k and get more than 4% in an interest account and avoid paying tax on the interest, i'd suggest it's better plugging as much as you can into the car.

Final caveat emptor - I work in investment banking, hence the interest in the figures bit, but am not linked to the car trade so there may be something i've missed - more than happy to learn more here

 

[DrEskimo]

Makes sense, thanks for explaining.

Struggling to see how putting a larger deposit in actually increases the overall money paid for you? if you added say £3k to the deposit, would that not be £3k that you weren't paying interest on for the 48 months?

With PCP, everything is linked:

GFV (guaranteed future value, basically Audi's predicted value of your car at the end of the 36/48 months) is fixed by Audi Finance (although can be lowered if you want to pay more off)

Monthly Payments = (sale price of car - (your deposit + dealer\manufacturer contributions)*interest) - GFV / number of months

That formula looks horrendous but it's essentially the cost of the car, minus deposits, plus interest, minus predicted value, divided by number of months. If any of those factors change, it will change the outcome of the monthly payments. Variables could be:

Deposit(s) go up, monthly goes down or vice versa.

Interest goes up, monthly goes up, or vice versa

GFV goes up, monthly goes down, or vice versa

Number of months goes up, monthly goes down (but not in a linear way due to interest calculations)

Of course, sale price up/down will affect it too.

Hope i'm not preaching on here; I really blitzed my knowledge of the product before going for my last car, makes discussions with the dealer far more balanced when they realise that you know at least a bit about what you're signing for.

In your case Daggerit, what part of the setup changed to make it cost more? Take the (purely theoretical) £3k example, if you put an extra £3k down, you're actually making the total amount paid less, due to it being £3k * 4% APR * 4 years = roughly £3,500, so you'd save £500 by doing so. So unless you can leverage your £3k and get more than 4% in an interest account and avoid paying tax on the interest, i'd suggest it's better plugging as much as you can into the car.

Final caveat emptor - I work in investment banking, hence the interest in the figures bit, but am not linked to the car trade so there may be something i've missed - more than happy to learn more here

This...

I've lost count of the times I've had to correct people who say "don't put in a larger deposit, it's money lost".

As you say, if you have no other use for the money, other than sitting in a pitiful savings account at 0.5%, it's far far far better to put it into the car and save a little bit on interest.

It's not a huge saving though, so not something to lose sleep over IMO.

Best thing to do, as ever, is get the discount on the car higher. That does well to lower the monthlies

 

[Daggerit]

Of course now I go to the finance calculator and put in my figures and find I'd pay £400 more over the whole term with a £2k vs £6k deposit... Haha.

Yeah, your theory is definitely sound and I can't remember the exact figures I was using when I calculated it out to be honest but I remember basing the figures on the monthlies and being slightly better off with the lower deposit. Don't ask me how, as like you say, I'd be expecting to pay more in interest.

Could be that the figures were a bit different as I notice some of the APR and deposit contribution details have changed online.


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[Alexander Thomson]

Of course now I go to the finance calculator and put in my figures and find I'd pay £400 more over the whole term with a £2k vs £6k deposit... Haha.

Yeah, your theory is definitely sound and I can't remember the exact figures I was using when I calculated it out to be honest but I remember basing the figures on the monthlies and being slightly better off with the lower deposit. Don't ask me how, as like you say, I'd be expecting to pay more in interest.

Could be that the figures were a bit different as I notice some of the APR and deposit contribution details have changed online.


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Haha sod's law! When I was looking at my Focus ST, the 24 month PCP was cheaper per month than the 36 month deal; I get the impression that the finance companies are a law unto themselves.

I had a 25 min discussion with the chap at Glasgow Audi about whether or not it was more sensible to put a larger deposit in - many scribbled graphs later, he conceded that it was, and that my £1.7k in interest was better in my pocket than his...and to his point, he had to take exams to sell these financial products, so no wonder we can't get it at the first pass

 

[GStatus]

I went with a lease through a broker. The base price was £290 for an S4 and then any options was on top of that, there was no interest involved on the monthly amount.
So reducing or increasing the deposit didn't effect the overall price for me, just the monthly figure I paid against the total sum.

With my options, I'm going to pay £10880 over the two year deal. Which is a significant amount cheaper than the deals I'm seeing on this thread.

At the end of the term, I fully expect Audi to offer me the car on PCP or HP, though they are not 'obligated' to.

From a cost perspective, I just don't see the advantage of PCP through the dealer, IF, you don't intend to buy the car at the end, as the money saved from a cheaper lease deal outweighs the 'equity' from overpaying. I also don't get the term 'equity' as if you hand the car back, do they give you money back?

I'm happy to be educated, new to this style of purchasing, I usually buy outright.

 

[cuke2u]

Most do not keep their cars to the end of PCP deal, thus why put in more of your own equity when you very likely never get it back? Beside you pay interest on the total price of the car, not just the amount of money you’re borrowing

 

[DrEskimo]

Most do not keep their cars to the end of PCP deal, thus why put in more of your own equity when you very likely never get it back? Beside you pay interest on the total price of the car, not just the amount of money you’re borrowing

If you don't put it in at the front, you are just paying for it over the term with higher monthlies, and consequently higher amount of interest.

The car doesn't suddenly become £2k cheaper just because you put in £1k as apposed to £3k up front. If you put in just £1k you are paying that £2k over X months + the extra interest on it. By the end of the term, whether you buy the car or not, you would of paid more money if you put the smaller deposit in.

 

[Alexander Thomson]

I went with a lease through a broker. The base price was £290 for an S4 and then any options was on top of that, there was no interest involved on the monthly amount.
So reducing or increasing the deposit didn't effect the overall price for me, just the monthly figure I paid against the total sum.

With my options, I'm going to pay £10880 over the two year deal. Which is a significant amount cheaper than the deals I'm seeing on this thread.

At the end of the term, I fully expect Audi to offer me the car on PCP or HP, though they are not 'obligated' to.

From a cost perspective, I just don't see the advantage of PCP through the dealer, IF, you don't intend to buy the car at the end, as the money saved from a cheaper lease deal outweighs the 'equity' from overpaying. I also don't get the term 'equity' as if you hand the car back, do they give you money back?

I'm happy to be educated, new to this style of purchasing, I usually buy outright.

That looks like a great deal. An easier way to view it might be to say you're paying £453 p/m (£10,880 / 24). You're absolutely right to view the deposit\monthly combo as irrelevant, as long as the combo equals £10,880 over 24 months.

Assuming the lease company is making a profit, you're paying your £453 p/m which is covering the cost of the lease company's fees and the depreciation of the car. When you hand it back, the lease company will presumably sell it and pocket the difference. Strangely, Audi are offering a guaranteed value after 24 months on a base S4 of £26,650 vs a list of £45,200 when taken on PCP - not sure about anyone else, but i can't see an S4 losing £18,550 in 2 years.

But then you realise that if you take PCP, Audi will give you £3,150 towards the deal, which brings your fees down to £15,400; let's assume you pay this list price (you'd be crazy to, but let's assume) and sign up to pay £15,400 over 24 months, and the car depreciates by £15,400, you've broken even and lost out vs your lease deal, which would have saved you £5k (only would have been £10,880). On the flip side, say the car depreciates by £8k and holds it's value well, you still pay £15,400, but you are in positive equity to the tune of £7.4k. With the lease deal, you still pay £10,880 regardless, and the lease firm takes your £2,880 as profit.

The advantage of PCP through a dealer is also that their bonuses and incentives are structured around finance, not just selling the car. This then enables them to discount and you to negotiate, which is the key to reducing the PCP down to more lease-like total numbers. The finance companies also set their guaranteed values fairly low to make you pay into the car faster than it depreciates - this allows them to call you after a couple of years (during which you've been paying, say £400 p/m and the car's been depreciating at £375 p/m) and offer you a new car for the same money, as you've amassed 'positive equity' in the car.

The opposite can happen, and often does in cars that don't hold their value well such as bargain basement superminis and luxo-barges from less well known brands (think Skoda superb, big Hyundai's etc), where they depreciate faster than you pay it off - if this happens, you hand the car back in negative equity and walk away, albeit deposit-less. The dealer absorbs the cost and you start again with a fresh deposit.

It's worth noting that if you realise you're in positive equity at some point during a PCP contract, you're absolutely free to trade the car in or sell it, provided you settle the finance promptly. I've just done this vs the S4 with my Focus ST - bought in September 2015, £1.7k down, £325 p/m and traded it in vs the S4 and received >£1k back in cash, as i'd paid off more than it had depreciated by, so I had essentially rented the car for 18 months. I chose to take the money back in cash but the option was there to put it down vs the S4. With a lease, this isn't possible as you'd have to pay the remaining months of the lease and penalty payments for terminating the contract early. And of course, there's no chance of equity being recouped if the market shifts.

Hope this essay helps!

 

[DrEskimo]

Problem with the 'equity' thing is that they make bold promises at the start, then when you come to trade in offer you **** poor part ex. Just going through this with my S5. Was told I would easily have +£3k in equity, but they are now only offering to clear the finance, so £0.

In fairness, I had around £1500 back in November before the new S5 was released, so probably should of done it then.

Very helpful members here told me about sale or return, so I'm going to do that with a local garage and hopefully get a good £2k extra for it.

 

[GStatus]

Very insightful guys, cheers!!

 

[cuke2u]

If you don't put it in at the front, you are just paying for it over the term with higher monthlies, and consequently higher amount of interest.

The car doesn't suddenly become £2k cheaper just because you put in £1k as apposed to £3k up front. If you put in just £1k you are paying that £2k over X months + the extra interest on it. By the end of the term, whether you buy the car or not, you would of paid more money if you put the smaller deposit in.

How can the interest be higher when it is calculated on the total cost of the vehicle, not on what you borrow? It makes no difference at all, yes you pay higher monthly but you still are paying the same interest. At the end of the term even if you pay less deposit you end up paying the exact same as you would with a higher deposit. I would much rather pay a lower deposit and spread the rest over the monthly payments incurring no extra costs...

 

[DrEskimo]

How can the interest be higher when it is calculated on the total cost of the vehicle, not on what you borrow? It makes no difference at all, yes you pay higher monthly but you still are paying the same interest. At the end of the term even if you pay less deposit you end up paying the exact same as you would with a higher deposit. I would much rather pay a lower deposit and spread the rest over the monthly payments incurring no extra costs...

Have a read of Alexanders excellent post #29.

You don't pay interest on the deposit you put down do you...!

The amount you borrow to finance the car is RRP - discount - deposit. So if you increase either the discount of the deposit, you are financing a smaller amount, therefore paying less interest.