PCP Mileage Setting

[ub7rm]

Considering purchasing my next car on a PCP deal and I've been told by the salesman that the milage I put down doesn't really matter unless I intend to hand the car back at the end of the agreement.  As long as I intend to part exchange it, they will just treat it as a car with the mileage as what it is rather than refer back to a contract.  Obviously if I do exceed the mileage and hand it back I will have to pay the excess mileage fees.

Any advice on this?  Seems to make sense but I don't want to go back in three years and be told that as I've exceeded the mileage I'm going to be penalised even though I'm not handing the car back.

[stealthwolf]

Ignore what the dealers say and look at the small print first. Why PCP? Loan should work out cheaper.

[ub7rm]

I'm waiting to see the small print.  A loan would be cheaper over a longer period of time.  More time than I'm likely to want the car for. 

All my previous cars have been purchased either cash or HP, but I've come to realise that 3 years, 4 years at a push is long enough before I'm bored.

X amount is leaving my account every month, then I pay it off and find a new car to start paying x amount again.  I'm happy with the concept I'm effectively renting the car and don't care about owning it, I get to drive a nice car for a smaller monthly outlay and thats all that really matters.

The only thing that concerns me is the situation I'll be in at the end of the deal when I'm trading it in and this guys' just telling me whatever he needs to say to sell the car.

[vRStu]

I'm quite experienced in this situation.  This assumes you will be using VWFS.

My advice (and the advice I was given from both my brother who is a Sales Manager at a dealership and a friend who is a Dealer Principle) is to take a low mileage figure such as 10k PA and treat the PCP as a Hire Purchase agreement.  With VWFS you can sell the car and repay at anytime in the term, you aren't committed to the full term.  Ignore the excess mileage charges, as your dealer says it's only relevant if you want to walk from the car and normally are only around 7p/mile (£70/1000) anyway.

Sadly people are all too quick to rubbish PCP deals.  Do your home work like you should/would with any significant lending before you sign but certainly don't discount them without looking.

There are some good benefits to having a car on HP or PCP, the most significant being that you don't own the car.  The finance house owns the car until the outstanding amounts are settled so in case of dispute with the dealer or manufacturer you have someone with a very vested interest on your side from the outset.  With a loan it's just money and you owe the bank regardless of the outcome.

Likewise there are often offers.  I'm not sure about VW but Audi are always doing what they call 'Centre Contribution'.  In the Open Season event that finishes on the 28th March there is a massive £6200 contribution on an A5 cabriolet.

The page is down at the moment but is cached here - http://webcache.googleusercontent.com/search?q=cache:BW-_WW24WTUJ:https://www.audi.co.uk/explore-models/open-season/a5-open-season.html

There is currently £4100 off an A5 coupe and if you look at the offer here - http://www.audi.co.uk/new-cars/a5/a5-coupe/finance-and-offers.html the OTR price is £30,560 and the total cost including all charges is £34,265 but the customer only pays £30,165 so that's a nice amount off before you negotiate any discount.

There is currently £4k off a Q7 but I have seen that at £8.5k!!  £3k off a TT Coupe.

For me the single most important figure, regardless of the method of finance is the Total Amount Payable at the end of the term.  That is the only way you can quantify what it will cost YOU.  Dealers will try to skirt around this by talking is 'cost to change' and other such terms but it really is as simple as deposit plus sum of monthly payments and then any final ballon if a PCP.

[ub7rm]

^ Thanks for that.

I agree, I don't see non ownership of a depreciating asset as a bad thing.  If the floor falls out of the used car market its easy to get rid and if the market is strong you still benefit.

[B3n]

Considering purchasing my next car on a PCP deal and I've been told by the salesman that the milage I put down doesn't really matter unless I intend to hand the car back at the end of the agreement.  As long as I intend to part exchange it, they will just treat it as a car with the mileage as what it is rather than refer back to a contract.  Obviously if I do exceed the mileage and hand it back I will have to pay the excess mileage fees.

Any advice on this?  Seems to make sense but I don't want to go back in three years and be told that as I've exceeded the mileage I'm going to be penalised even though I'm not handing the car back.

100% Correct

[ub7rm]

Thanks gents, appreciated.