VW Polo - PCP-to renew or not to renew? | Motoring discussion | Back Room Forum

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Thu 12 Jan 2017 11:36

VW Polo - PCP-to renew or not to renew? - FoxyJukebox

I have been asked for advice and my opinion!. A friend is currently driving a 2014 Polo, bought on PCP -due to come up this spring. He is not absolutely sure whether to trade in, upgrade & renew his PCP or simply to pay off and fully own, but at the moment is likely to go for the former. He is happy with VW and his current car, but would feel more secure with a newer model. He is not totally in love with Polo, but the Golf is too big and the UP is too small for him -thus another Polo probably calls?

What negotiating tricks can he employ to ensure he gets the best deal? in 2014 he got free insurance for a full year, a couple of free services and a very good trade in ( £1500!) for an old Rover that's book price was only around £600. Wow!

His current Polo-an automatic- has only done around 14,000 miles and is (currently!) trouble free. There are a few nasty mini parking scrapes and blemishes on the bodywork, but the car is washed regularly and clean inside(non smoker). All servicing is up to date.

if it was me-I would be inclined to keep the car and pay off what I still owe. I've told him he will still only have a total of 28,000 on the clock in three years tiome!

My friend though likes the concept of always having a newish vehicle and is convinced he can get another jammy deal!

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Thu 12 Jan 2017 12:08

VW Polo - PCP-to renew or not to renew? - skidpan

What negotiating tricks can he employ to ensure he gets the best deal? in 2014 he got free insurance for a full year, a couple of free services and a very good trade in ( £1500!) for an old Rover that's book price was only around £600. Wow!

His current Polo-an automatic- has only done around 14,000 miles and is (currently!) trouble free. There are a few nasty mini parking scrapes and blemishes on the bodywork,

Well he can forget a PX values of the Polo. He does not own it so providing the mileage is below the agreed limit he can at best expect to get £0. The nasty scrapes will cost him money so my advice would be to get these ironed out by a local body shop on the cheap before visiting any dealer. The dealer will carge huge sums for fixing damage.

As for the best deal he needs to do his own leg work. Only he knows what he wants and if its another Polo his options will be down to what VW national deals are currently on.

Other brands may have better deals so shop round.

One example, when we bought the Note we got a 3 year PCP for £90 a month. At the time a similarly priced Polo would have been over £130 a month. tahts nearly 50% more.

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Thu 12 Jan 2017 12:43

VW Polo - PCP-to renew or not to renew? - SLO76

Depends what the Guaranteed Minimum Future Value (GMFV) is on the PCP deal he signed. Is the car worth the balance?

If he decides to hand it back and take out a new deal then he'll have to pay for any damage that's above and beyond the normal wear and tear expected of a car this age and mileage. The dealer will charge strongly to repair any paintwork so it's often worthwhile having it repaired yourself. However they tend to be a little more lenient if you're taking another car from them.

Personally depending on that GMFV I'd be looking to keep the car. Although VW's DSG gearbox doesn't have the best reputation the car has done a very low mileage and I assume has a full dealer service history. If the valuation is at trade money or below I'd keep it and carry on servicing it at the main dealer who know what to watch for on these. Plus he'll be free to do as many miles as he wants.

If he buys another he's just buying the current model again which is due for replacement shortly.

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Thu 12 Jan 2017 13:07

VW Polo - PCP-to renew or not to renew? - daveyjp

Whilst he may think he was given a blinding deal three years ago the higher part ex value and 'free' servicing etc will all have been covered in the total deal, whether this be the initial price of the car, the deposit paid, the APR of the loan or the GMFV.

If he swaps the car, unless the car is worth a lot more than GMFV, he is beginning at zero so will also need a deposit.

Starting point for a deal is a broker price, get them to match this then squeeze them for some freebies and a very low APR on the loan.

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Thu 12 Jan 2017 15:23

VW Polo - PCP-to renew or not to renew? - bazza

£90 a month!!! Wow that's a deal, there must be a hefty deposit tied up in there surely, otherwise I'm off down Nissan tomorrow!

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Thu 12 Jan 2017 15:30

VW Polo - PCP-to renew or not to renew? - SLO76

£90 a month!!! Wow that's a deal, there must be a hefty deposit tied up in there surely, otherwise I'm off down Nissan tomorrow!

Headline grabbing PCP deals usually include a big deposit and a tiny mileage allowance of 4K per year. Though the Note was always good value compared to more mainstream rivals.

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Thu 12 Jan 2017 16:21

VW Polo - PCP-to renew or not to renew? - skidpan

Headline grabbing PCP deals usually include a big deposit and a tiny mileage allowance of 4K per year. Though the Note was always good value compared to more mainstream rivals.

Think we put about £3000 down and its 6000 mile a year. Obviously the end payment was quite large. All meaningless since we paid it off early.

There was a £2500 deposit contribution from Nissan and another £500 since we already owned a Nissan. The 3 year service pack was £99 since we already owned a Nissan. Then the dealer threw in another £1500 discount just for good measure.

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Thu 12 Jan 2017 17:50

VW Polo - PCP-to renew or not to renew? - concrete

He will get a deal alright. All dealers want to move stock and competition should be fierce, so try a couple of other VW or similar dealers and get some comparisons. My daughter had a Fiesta on PCP. Kept it nice and low mileage and she got over £1600 more than the GMFV. She then ploughed this back into another PCP with similar payments and got another new car. She is extremely happy with the whole process. It can work, especially in January when sales are not great. Good luck.

Concrete

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Fri 13 Jan 2017 00:08

VW Polo - PCP-to renew or not to renew? - Avant

The last two posts show how to get the best out of a PCP.

Either do what Skidpan does - get the good deal by taking out a PCP and then pay it off ASAP; or like Concrete's daughter, buy a car which holds its value well, keep to a lowish mileage and hopefully find with a few months of the end of the contract that the market value of the car is higher than the GMFV, thus providing a deposit towards the next one.

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Fri 13 Jan 2017 10:18

VW Polo - PCP-to renew or not to renew? - FoxyJukebox

These are all v helpful replies. Have suddenly realised that of course one big advantage for the dealership is that they already have him on their books and have probably even factored his case into to their forward planning.

So If he can be bothered( and i suspect he might not)- then he should pay it off, polish up the little scrapes, then maybe sniff out a PCP deal with Kia or some such. Much cheaper cars.

However-I am still sticking with my long term mind set that says if you do not want to afford something, then don't spend money you haven't got and most certainly don't "borrow" it.

Three years ago his original Rover had only done 32,000 miles. Provided (ha ha?) it had remained reasonably trouble free, his cheapest deal might have been to retain THAT!?

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Fri 13 Jan 2017 12:53

VW Polo - PCP-to renew or not to renew? - bazza

However-I am still sticking with my long term mind set that says if you do not want to afford something, then don't spend money you haven't got and most certainly don't "borrow" it.

That is very sound advice. Locking yourself into a PCP 3 year cycle will keep you poor. Much as I love cars and bikes, buying a new one every 3 years is a fool's game-- that is essentially what you're doing with repeat PCP. It can only work if you do what Skidpan did and screw a discount, then pay it off and keep the car. Or alternatively, buy the absolute cheapest possible car on the cheapest possible deal and consider it as a monthly bus pass. I've considered that many times but I always but nearly new or used and don't mind wrenching myself, so that works better and much cheaper for me.

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Fri 13 Jan 2017 18:35

VW Polo - PCP-to renew or not to renew? - skidpan

The Leon was bought on a PCP. Seat gave me £1000, cancelled 5 days later, no charges and kept the £1000. Thanks Seat.

The Note was bought on a PCP. Seat gave me £3000 but I did not pay it off until it was about 1 year in, needed savings for building work. When we paid it off it had cost me about £400 in interest so still over £2500 up even after charges. Thanks Nissan.

With the Superb its a bit more complicated. There was a PCP with £2000 contribution but the almost £3500 discount you get halves. Or you can get the full discount with 0% over 3 years. The 0% was the better deal so went for that. Obviously won't be paying that off early.

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Wed 18 Jan 2017 07:34

VW Polo - PCP-to renew or not to renew? - TheBroker

Hi, bearing in mind this is what I do day in day out hopefully I can provide some qualified advice.

With the Polo on PCP a key thing to do is determine market value of the Polo. If it is greater than the outstanding or gmfv then it may be worthwhile selling it, pocket the equity once finance paid off and then make approaches as a buyer with a cash lump.

If your friend always wants a new car (I.e. Had no intention of keeping a car long term it may be worth considering contract hire deals moving forwards. There are often silly deals on contract hire if you look around or use a broker who knows what they're talking about.

If your friend is fixed however on PCP I would definitely recommend he investigates selling his car to get max return (unless gmfv is greater than market value which is unlikely), pay off the finance and have equity to put into his next deal.

Re negotiation tips, perhaps wait until late Feb for a stock 66 plate deal.

Also look at car he's interested in and see if car tax will be cheaper over the contract term under the new or old car tax scheme which changes on 1 April, then of course get car either side of that date depending on outcome.

Hope this helps,

TheBroker

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