[JNW1]

Originally Posted by teaston

The main problem with a large deposit is when you VT at 3 years into a 4 year PCP you are effectively throwing away a quarter of your deposit!

If you VT aren't you in effect kissing goodbye to all of your deposit?

Would have thought that if (say) you're going to VT at 36 months into a 48 month agreement you need to compare the total cost of a larger deposit and 36 smaller monthlies with the total cost of a lower deposit and 36 higher monthlies; whichever is lower in cash terms is best unless a) you want to use what would be the extra deposit for other things or b) don't have the extra deposit in the first place!

[MashinBenzin]

Originally Posted by teaston

The main problem with a large deposit is when you VT at 3 years into a 4 year PCP you are effectively throwing away a quarter of your deposit!

Academic for me as I would never intend to VT.

[teaston]

Originally Posted by JNW1

If you VT aren't you in effect kissing goodbye to all of your deposit?

Would have thought that if (say) you're going to VT at 36 months into a 48 month agreement you need to compare the total cost of a larger deposit and 36 smaller monthlies with the total cost of a lower deposit and 36 higher monthlies; whichever is lower in cash terms is best unless a) you want to use what would be the extra deposit for other things or b) don't have the extra deposit in the first place!

No, the deposit reduces the monthly payments, so if you VT at 3 years you lose the benefit of the reduced monthlies for year 4.

[teaston]

Originally Posted by MashinBenzin

Academic for me as I would never intend to VT.

So you keep cars for 4 years?!

[MashinBenzin]

Originally Posted by teaston

So you keep cars for 4 years?!

Shocking I know. Last two cars were 3.5 years and almost 7 years. We have also had my wife's car five years now. All on 36 month pcps as is the 440i.

[teaston]

Originally Posted by MashinBenzin

Shocking I know. Last two cars were 3.5 years and almost 7 years. We have also had my wife's car five years now. All on 36 month pcps as is the 440i.

3 years is a stretch for me, I haven’t kept a car for more than two years in almost ten years now! I do over 25k pa though which does wear out the cars and make you bored of them a lot quicker!

[MashinBenzin]

Originally Posted by teaston

3 years is a stretch for me, I haven’t kept a car for more than two years in almost ten years now! I do over 25k pa though which does wear out the cars and make you bored of them a lot quicker!

Funnily enough, the car I kept for seven years was 22k a year for the first four years - I actually liked it more for spending more time in it.

Financially it makes much more sense to go past three years, every month is a relatively cheap one. Keeping the E90 seven years saved me a fortune.

[teaston]

Originally Posted by MashinBenzin

Funnily enough, the car I kept for seven years was 22k a year for the first four years - I actually liked it more for spending more time in it.

Financially it makes much more sense to go past three years, every month is a relatively cheap one. Keeping the E90 seven years saved me a fortune.

I save money on other things, so I can spend it on my cars.

[MashinBenzin]

Originally Posted by teaston

I save money on other things, so I can spend it on my cars.

Me too.

[JNW1]

Originally Posted by teaston

No, the deposit reduces the monthly payments, so if you VT at 3 years you lose the benefit of the reduced monthlies for year 4.

Ok but if someone is entering the agreement with a view to exercising their right to VT as soon as they're able isn't any deposit in effect just an up-front discount off the monthlies?

[isleaiw1]

Originally Posted by MashinBenzin

Academic for me as I would never intend to VT.

Me neither, but I think my views are pretty clear already..

I try to look at total.cost but let's be honest, psychologically I bulk at more than 600 a month and also at putting a fistful of cash down as deposit on a depreciating asset. The combination of the 2 is a good way to restrict what i buy..

600 is based on two things - the gross amount of my car allowance per month, and how much two cars used to cost when I was paying for both mine and my wife's. Still have two cars but station car is always a cheap cash option so all finance on one. Deposit cash is generally restricted to what might be hanging around in my current account - 3k maybe. Plus whatever the part ex is worth- and I normally try and pay off in hotel or at least a good chunk before purchase time.

Sticking another 600 a month into my stocks and shares ISA would be better for retirement but let's be honest, by then I will be waiting to give it to kids so want some enjoyment along the way.

I just can't pay more for anything - one reason why Macan got cancelled as that was 8k cash and 625 a month - on top of part ex. Might have been a better long term buy but it just sounded too expensive (in all ways)...

[isleaiw1]

Originally Posted by JNW1

Ok but if someone is entering the agreement with a view to exercising their right to VT as soon as they're able isn't any deposit in effect just an up-front discount off the monthlies?

Yes - the deposit reduces the payment over the term but you should apportion it over the period you expect to keep car.

My deposit was 9500... if I sell car now after 13 months, the cost per month will be 1300 - assuming I can sell car for same as outstanding finance (monthly payment 570, deposit apportioned 730). If I keep it to VT point (month 38?) It will cost 820 a month (570 plus 250 deposit apportionment). If I keep it to term it will be 770 a month...

When I bought it I budgeted in my head 10k a year to run it (excluding petrol) so not many of those numbers fit the plan... looks like 42 months plus... but that is fine, I like it and it meets needs....

[Alice Coupe]

Originally Posted by isleaiw1

My deposit was 9500... if I sell car now after 13 months, the cost per month will be 1300 - assuming I can sell car for same as outstanding finance (monthly payment 570, deposit apportioned 730). If I keep it to VT point (month 38?) It will cost 820 a month (570 plus 250 deposit apportionment). If I keep it to term it will be 770 a month...

£770 pm over the term What the heck did you buy?

[MashinBenzin]

Originally Posted by isleaiw1

Me neither, but I think my views are pretty clear already..

I try to look at total.cost but let's be honest, psychologically I bulk at more than 600 a month and also at putting a fistful of cash down as deposit on a depreciating asset. The combination of the 2 is a good way to restrict what i buy..

600 is based on two things - the gross amount of my car allowance per month, and how much two cars used to cost when I was paying for both mine and my wife's. Still have two cars but station car is always a cheap cash option so all finance on one. Deposit cash is generally restricted to what might be hanging around in my current account - 3k maybe. Plus whatever the part ex is worth- and I normally try and pay off in hotel or at least a good chunk before purchase time.

Sticking another 600 a month into my stocks and shares ISA would be better for retirement but let's be honest, by then I will be waiting to give it to kids so want some enjoyment along the way.

I just can't pay more for anything - one reason why Macan got cancelled as that was 8k cash and 625 a month - on top of part ex. Might have been a better long term buy but it just sounded too expensive (in all ways)...

I have a similar block on monthly outgoings. For a long time I have tied the car to £300 per month. That's worked for the last four cars including my wife's and the 440i. Both my BMWs being slightly over the limit at £330ish.

For the next car (SUV) £500-£600 is the acceptable number.

It's all about keeping monthly outgoings down/staying financially flexible in case of being out of work/taking an income hit at some point.

Another rule, we only have one PCP running at a time, the other car must be fully owned. Then if things get really bad, we still have wheels and can give up the financial black hole that is the other one.

[isleaiw1]

Originally Posted by Alice Coupe

£770 pm over the term What the heck did you buy?

An Audi SQ5 with about 5k of extras. You can’t fund £30k depreciation over 4 years for much less....

[teaston]

Originally Posted by isleaiw1

An Audi SQ5 with about 5k of extras. You can’t fund £30k depreciation over 4 years for much less....

Crikey, M40d is £1k more expensive car, and I’ve added £9k of extras and my total per month if going to full 4 year term is a lot less than £770!

[isleaiw1]

Originally Posted by teaston

Crikey, M40d is £1k more expensive car, and I’ve added £9k of extras and my total per month if going to full 4 year term is a lot less than £770!

what's your GFV? mine is at about £26k - so £30k of depreciation to fund....

finance is 6% too - best I could get via Audi at the time...but I will almost certainly buy it out at some stage in next 15 months....

You may have priced it up to £10k more but then BMW knock it all off!!!

[Mike_H]

Originally Posted by teaston

Crikey, M40d is £1k more expensive car, and I’ve added £9k of extras and my total per month if going to full 4 year term is a lot less than £770!

I can’t see how it can be a lot less, I have had a quote on an M40i also from TRL and over the 48 months it’s around 10% cheaper. GFV is similar at just under £26k.

[330XDave]

Originally Posted by teaston

Crikey, M40d is £1k more expensive car, and I’ve added £9k of extras and my total per month if going to full 4 year term is a lot less than £770!

I'm guessing you've haggled for a big discount off the price of the car and I assume this is not as easy to do an Audi.

[teaston]

Originally Posted by Mike_H

I can’t see how it can be a lot less, I have had a quote on an M40i also from TRL and over the 48 months it’s around 10% cheaper. GFV is similar at just under £26k.

10% of £770 is a lot.

[isleaiw1]

Originally Posted by 330XDave

I'm guessing you've haggled for a big discount off the price of the car and I assume this is not as easy to do an Audi.

Easier now but not a year ago...

And if 10% of 770 is a lot then 90% over 4 years is a lot too, guess it depends where you draw the line at too much...

PS the Macan GTS I ordered and cancelled was £930 a month over 4 years - if it had no equity at the end (with a GFV of 30k round numbers - about 4K of extras added)

[NISFAN]

Originally Posted by teaston

10% of £770 is a lot.

What mileage per annum did you go for in the end?