How do people fund their new Polo

[Andy Beats]

PCP renders voluntary termination nigh-on useless.

You can only instigate voluntary termination when you have paid off half of the capital of the car. If you have a 3 year PCP where you got a £20k car with a GFV of say £9k, and £3k interest, you'll have had to pay off £10k capital and about £2.5k interest (remember - monthly interest is twice as much at the start than towards the end of the PCP term). At that point you'll only be 3 or 4 payments away from your 36 month term.

Still, that 3-4 months can be important for anyone who's desperate to get rid.
And VT isn't a black mark on your credit record, so no harm taking advantage of it.
Of course there is always the risk of that same finance company being sulky with you if you attempt another deal with them.

[mike sel]

I really don't mind paying the monthly payments just the worst thing is I am locked down for 4 years unless I want to part ex.

You're not really locked down.
You can buy the car off them at any time, leaving you free to sell it or trade it in against another one.
There's also a point at which you can hand the car back and walk away early (look at 'voluntary termination')
It's not like you're absolutely forced to keep it the four years, there are ways and means to get out of it.

PCP renders voluntary termination nigh-on useless.

You can only instigate voluntary termination when you have paid off half of the capital of the car. If you have a 3 year PCP where you got a £20k car with a GFV of say £9k, and £3k interest, you'll have had to pay off £10k capital and about £2.5k interest (remember - monthly interest is twice as much at the start than towards the end of the PCP term). At that point you'll only be 3 or 4 payments away from your 36 month term.

Cars like the Audi S3 and Golf R, with a 3 year GFV exceeding 50% of RRP will never reach the point of voluntary termination.

For me its all this PCP crap I don't want to deal with. Also annual mileage I do is quite high, so I don't want to start worrying about how much I use the car. So pay cash, own the car I can chop it in whenever I want to anywhere I want to. Freedom from PCP shackles.

[Andy Beats]

For me its all this PCP crap I don't want to deal with. Also annual mileage I do is quite high, so I don't want to start worrying about how much I use the car. So pay cash, own the car I can chop it in whenever I want to anywhere I want to. Freedom from PCP shackles.

It's not "PCP crap" it's just a contract that suits plenty of people.
High mileage drivers are always better off buying, but then have to accept their cars will depreciate like crazy.
A high mileage petrol Polo isn't going to be worth much in X years.

[JMiddo94]

Also done mine on PCP as I change my car typically every 18 months, on my 3rd VW now and they've always written off any neg eq allowing me to start fresh, presumably I wouldn't get this if I were to go to another brand.

I've done the maths and this is the cheapest option for me vs buying outright/leasing, besides the money I'm not spending can be kept in investments earning more than the 6% APR interest on the PCP.

For reference I pay £280pm - 0 deposit on a Polo GTI 8000m p/a

[mike sel]

For me its all this PCP crap I don't want to deal with. Also annual mileage I do is quite high, so I don't want to start worrying about how much I use the car. So pay cash, own the car I can chop it in whenever I want to anywhere I want to. Freedom from PCP shackles.

It's not "PCP crap" it's just a contract that suits plenty of people.
High mileage drivers are always better off buying, but then have to accept their cars will depreciate like crazy.
A high mileage petrol Polo isn't going to be worth much in X years.

Who said PCP was crap?. I clearly wrote "FOR ME its all the PCP crap I don't want to deal with". To clarify for anyone wo cant be bothered to read a post properly before replying, its the process and the restrictions it puts up on one that annoys me and I choose not to get involved with. I am sure that PCP gets many people into cars they cannot afford, in that respect its brilliant. As FOR ME I simply choose to have what I can afford the Buy and OWN. My Rolex Daytona is mine as is my Omega Speedmaster, My house everything in it including the art collection. My car is mine also. I have nothing on loan, part owned or borrowed. I have never been given a penny I worked for the lot and without stepping over anyone. I just Effin worked hard.

[Andy Beats]

Who said PCP was crap?. I clearly wrote "FOR ME its all the PCP crap I don't want to deal with". To clarify for anyone wo cant be bothered to read a post properly before replying, its the process and the restrictions it puts up on one that annoys me and I choose not to get involved with. I am sure that PCP gets many people into cars they cannot afford, in that respect its brilliant. As FOR ME I simply choose to have what I can afford the Buy and OWN. My Rolex Daytona is mine as is my Omega Speedmaster, My house everything in it including the art collection. My car is mine also. I have nothing on loan, part owned or borrowed. I have never been given a penny I worked for the lot and without stepping over anyone. I just Effin worked hard.

Didn't mean to offend.
It's wrong to think PCP is for people who "can't afford" to buy cars though.
Many, like me, could actually buy the car outright if we really wanted to.
We just choose not to because owning a car is something we simply don't want to do any more.

[monkeyhanger]

[I am sure that PCP gets many people into cars they cannot afford, in that respect its brilliant. As FOR ME I simply choose to have what I can afford the Buy and OWN. My Rolex Daytona is mine as is my Omega Speedmaster, My house everything in it including the art collection. My car is mine also. I have nothing on loan, part owned or borrowed. I have never been given a penny I worked for the lot and without stepping over anyone. I just Effin worked hard.

That all sounds pretty judgemental to me. I have no idea what the personal financial circumstances are of anyone in here, or what they spend their money on, how hard they work etc. Sounded like a stereotypical baby-boomer response. I have a mate who is on good money, but PCPs because he spends £25k a year on his travelling/holidays.

I do think people in work generally have it harder these days - company pensions at the statutory minimum or not much more for most that aren't working for a large global company - final salary pensions now gone, other perks like Bupa and bonuses gone, many haven't had an effective pay rise in 10 years, working extra hours without pay is prevalent now, having a far higher retirement age. Crippling student debt to get a degree for a job with average wages. Houses are many times more expensive in terms of multiples of household salary than they used to be - making house ownership a far bigger drain on wages than they were 15+ years ago.

I envy the likes of my Grandad who retired from Tioxide with a full final salary pension at 57, and had 24 years of retirement. I'd have to put half my wage away for retirement to be able to do the same,, despite being in a reasonably paid job.

No one keeps a car forever, so the idea of PCPs and leasing is nothing to be sneered at. If I could've had a Polo GTI+ for £230 a month with no deposit down on lease, I'd have been all over it - that is what my cash buy is costing me in anticipated depreciation, at the cost of missing out on some derisory rate of interest.

[Andy Beats]

The way the car market is going too, I'm not sure buying is a good idea at all.
Not unless you're fully prepared to keep it for a long time and run it into the ground.
There's massive change coming in the next five years, I'm glad I have the option of just handing our cars back and walking away to start again elsewhere.

[mike sel]

[I am sure that PCP gets many people into cars they cannot afford, in that respect its brilliant. As FOR ME I simply choose to have what I can afford the Buy and OWN. My Rolex Daytona is mine as is my Omega Speedmaster, My house everything in it including the art collection. My car is mine also. I have nothing on loan, part owned or borrowed. I have never been given a penny I worked for the lot and without stepping over anyone. I just Effin worked hard.

That all sounds pretty judgemental to me. I have no idea what the personal financial circumstances are of anyone in here, or what they spend their money on, how hard they work etc. Sounded like a stereotypical baby-boomer response. I have a mate who is on good money, but PCPs because he spends £25k a year on his travelling/holidays.

I do think people in work generally have it harder these days - company pensions at the statutory minimum or not much more for most that aren't working for a large global company - final salary pensions now gone, other perks like Bupa and bonuses gone, many haven't had an effective pay rise in 10 years, working extra hours without pay is prevalent now, having a far higher retirement age. Crippling student debt to get a degree for a job with average wages. Houses are many times more expensive in terms of multiples of household salary than they used to be - making house ownership a far bigger drain on wages than they were 15+ years ago.

I envy the likes of my Grandad who retired from Tioxide with a full final salary pension at 57, and had 24 years of retirement. I'd have to put half my wage away for retirement to be able to do the same,, despite being in a reasonably paid job.

No one keeps a car forever, so the idea of PCPs and leasing is nothing to be sneered at. If I could've had a Polo GTI+ for £230 a month with no deposit down on lease, I'd have been all over it - that is what my cash buy is costing me in anticipated depreciation, at the cost of missing out on some derisory rate of interest.

Funny response. Are you a stand up? I said I just don't care for the crap that comes with PCPs is all. I have the cash so I don't have to. Others don't so need PCP and all the crap that goes with them. I expect that when I finally retire (many years away yet) I will have to fund it privately. Cant see a state pension being available when I retire.

[mike sel]

Who said PCP was crap?. I clearly wrote "FOR ME its all the PCP crap I don't want to deal with". To clarify for anyone wo cant be bothered to read a post properly before replying, its the process and the restrictions it puts up on one that annoys me and I choose not to get involved with. I am sure that PCP gets many people into cars they cannot afford, in that respect its brilliant. As FOR ME I simply choose to have what I can afford the Buy and OWN. My Rolex Daytona is mine as is my Omega Speedmaster, My house everything in it including the art collection. My car is mine also. I have nothing on loan, part owned or borrowed. I have never been given a penny I worked for the lot and without stepping over anyone. I just Effin worked hard.

Didn't mean to offend.
It's wrong to think PCP is for people who "can't afford" to buy cars though.
Many, like me, could actually buy the car outright if we really wanted to.
We just choose not to because owning a car is something we simply don't want to do any more.

By the time any change takes hold and the infrastructure is built up to cope it will be another 5- 7-10 years. By then many of us will have changed cars and the way we pay for them.

[monkeyhanger]

Funny response. Are you a stand up? I said I just don't care for the crap that comes with PCPs is all. I have the cash so I don't have to. Others don't so need PCP and all the crap that goes with them. I expect that when I finally retire (many years away yet) I will have to fund it privately. Cant see a state pension being available when I retire.

For many, if not most people having seen your post would take away from it that you believe anyone PCPing can't afford to do otherwise and that as you do buy cash, it's because you work hard, and they don't work as hard, before bragging about 2 watches and an art collection.

Moral of the story " work harder and you can buy your own car instead of PCPing it". People spend their money on all sorts of things - for some, saving a big lump sum for a car would mean spending less elsewhere for a few years. Either way, for me there's no shame or judgement due in driving a new car if you didn't buy it outright.

[ashleyman]

PCP.

She wanted to retain her savings and just pay a small fixed fee each month for her car. We compared the prices for lease vs PCP and on the vehicle she wanted a PCP was cheaper. PCP accomplishes her goal for the least amount per month.

She now pays £289 per month to run her car. That includes the monthly car payment and contributions towards her annual insurance + car tax payments. Fuel is on top.

That leaves her with 0000's in savings working for her. She'll continue to save as before but now she's only on the hook for what she needs to pay and if it all goes wrong she can just hand the car back at the end just as you would a lease.

[Andy Beats]

By the time any change takes hold and the infrastructure is built up to cope it will be another 5- 7-10 years. By then many of us will have changed cars and the way we pay for them.

Given that the majority of people will charge at home, the infrastucture is already there.

[mike sel]

By the time any change takes hold and the infrastructure is built up to cope it will be another 5- 7-10 years. By then many of us will have changed cars and the way we pay for them.

Given that the majority of people will charge at home, the infrastucture is already there.

no not for the 300mile regular trip I do twice a month I can rely on Electric yet unfortunately. I need a fundamental battery breakthrough before im in. Min 300 mile real world winter capacity and recharge in a couple of hours. + I want to run aircon, lights and wipers on heater on. radio on sat nav on. I can currently do this in my polo. when they give me a 4 seat electric car that can do that for £20k I be all over it.

[Andy Beats]

no not for the 300mile regular trip I do twice a month I can rely on Electric yet unfortunately. I need a fundamental battery breakthrough before im in. Min 300 mile real world winter capacity and recharge in a couple of hours. + I want to run aircon, lights and wipers on heater on. radio on sat nav on. I can currently do this in my polo. when they give me a 4 seat electric car that can do that for £20k I be all over it.

Probably not far away.
Plan for this to be your last ICE car, everyone should.