[TW]Fox;26067321 said:
You seem to have fundamentally misunderstood the difference between the two options you considered.
The new car you have selected is roughly twice as expensive to own for 4 years as the used car you were considering. Thats not to say it was the wrong choice (Though I'd question the logic of a brand new TT the year it gets replaced given its been out for 8 years but thats another story) but to present it as a similarly priced option to buying used is just plain wrong?
I fear you are exaggerating the cost of a pcp deal somewhat. You do NOT pay twice as much as buying the car with a straight loan from the bank.
The way it ACTUALLY works, I shall try to explain using 20k purchase price.
You take out a loan for 20k, and pay over 40 months. Say 5% interest over the term for easy calculation. So you pay £21k at £525 per month. Simples.
Now, for pcp, you have a 10k future payment to make. But the same 5% interest over the term. So you pay £11k over the 40 months at £275 per month, and still owe the 10k at the end.
So that's for cars the same value. You actually pay the same, the difference is you are just offsetting some of the cost, while paying interest on that amount.
So say the £20k motor is 18 months old. And a new one costs £30k. Same 5% over the term means £1500 in interest. It'll likely depreciate faster too, so the future value after 40 months might be £13k. So you pay the £17k depreciation cost plus the £1500 interest. So £18,500 over the 40 months. So £462.50 per month.
But, you have driven a new car for that 40 months, 36 of which with manufacturers warranty, rather than 18 months with the second hand car (worth around £750 in these big German motors). You have paid less per month too, by £37.50, or £1500 over the term. BUT, you are still owed £13,000. But you have saved £2250 over the term, so you are now owed £10,750 in real terms.
£750 more than the difference in purchase price between the new and used cars. So you are paying more, but only a little more than the difference in purchase price. Plus, your car will be 18 months newer, so if the older one is worth £10k, the 18 month newer one should be worth that £750 more come selling time.
All you are REALLY doing then, is offsetting the value of a 58 month old motor, if done right, at no cost to yourself, while driving a brand new car.
Of course, you don't own the car at the end of it unless you pay that final payment. But most people, I would imagine, would consider 3.5 years enough with a car and would be wanting the next one anyway.
It certainly isn't double the price, assuming you are talking cars of the same value.
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