# Audi Finance on TT2



## steve_b (Aug 4, 2006)

hello gents.

I'm currently very interested in the TT2 and although there is little discount to be had, are there any favourable finance deals available. I need straight finance - not leasing or similar, I have no p/ex and cash for around 1/3 of the total.

If not available, its a simple personal loan on a 5 to 6 % APR which is readily available.

Has anyone been offered a cracking deal ?

Many thanks


----------



## TT Law (Sep 6, 2003)

I have a good deal but it is Lease Purchase.

Just remenber that if on a Personal Loan and your circumstances change the loan company will wnat the money back - with HP you have the option of handing the car back once 50% is paid.

Steve


----------



## Toshiba (Jul 8, 2004)

Ive purchased mine out right, Audi never even mentioned credit but i cant image they are cheap. If you use their finance you may get a better deal as they will be making money off the finance too. (could be wrong and id guess each dealer will be different).

Have you tried the money section on MSN?


----------



## Chunk (Aug 12, 2006)

As the residuals are looking strong it may be worth looking at PCP. I do this on new cars when im confident I wont go negative. Means I can put the cash into houses and they are a much better return Â£ for Â£


----------



## Toshiba (Jul 8, 2004)

Anythings a better bet than a car.


----------



## tehdarkstar (Jul 24, 2006)

Chunk said:


> As the residuals are looking strong it may be worth looking at PCP. I do this on new cars when im confident I wont go negative. Means I can put the cash into houses and they are a much better return Â£ for Â£


I like PCPs too...

I haven't been offered a particularly good deal on my finance, but the future guaranteed value at least is VERY low, which should mean that the deposit for my new car is guaranteed after three years.

I also like the possibility to include service, maintenance and tyres packages, as it gives you peace of mind and more predictability on your expenses.


----------



## ezzie (Jul 2, 2004)

How much does the PCP rate of interest work out to be over the load period? Surely cash is the cheapest option and next to that adding on to a mortgage.


----------



## ChinsVXR (Apr 14, 2006)

I tend to use balanced payments. PCP's tend to attract a higher APR and their future value is based on a basic car with no options. Therefore the guaranteed value is of no use at all.

On balanced payments you can also set a final payment in 3 or 4 years, or just do a straight loan. Interest is calculated daily, so no early settlement penalties.

Audi dealers can offer balanced payments on loan over 25k, or Lombard will do them under this number.


----------



## marky9074 (Jul 15, 2005)

Call me old fashioned, but have you actually asked Audi what their APR is? I was prepared to put my car on the mortage until he offered 4% and no fee for paying it off early....

Mark


----------



## Guest (Aug 22, 2006)

Sainsbury's do a car purchase thingy like PCP - Deposit, fixed monthly payments (low APR i think 5.6%ish) + optional final payment etc....saw a leaflet about it yesterday whilst some little old granny was counting her coppers at the till :evil:

get a quote from sainsbury's or other banks then go to Audi to see if they can match it + add in some extras on the car :roll:


----------



## Chunk (Aug 12, 2006)

8.9% APR http://sainsburysbank.whatcar.com/pcp.asp


----------



## bw64402 (Jul 30, 2006)

Chunk said:


> 8.9% APR http://sainsburysbank.whatcar.com/pcp.asp


Interesting, when you follow the link above and select the NEW AUDI TT, you are presented with the 4 flavours of car (2.0 vs 3.2 & manual vs S Tronic).

Interesting to see that all cars get 5 out of 5 except the standard 3.2Q (which gets 4 out of 5). :lol:

Sainsburys dont like the 3.2Q! _(not a major authority on cars i know! :wink_


----------



## Toshiba (Jul 8, 2004)

On the details when you do a compare all sections are the same. :roll:


----------



## bw64402 (Jul 30, 2006)

Toshiba said:


> On the details when you do a compare all sections are the same. :roll:


I know, seems very odd.

Plus when you read the text under each heading it all reads a little lame! example under equipment it reads "all the kit you would exepct for the money" - maybe a LEXUS yes, but not an Audi.


----------



## CyborgStu_TT (Aug 22, 2006)

lexfreechoice were doing 3 yr lease @10,000 miles per annum for Â£399 with Â£1000ish deposit.

The final purchase price was ok too.


----------



## shavedsporty (Aug 22, 2006)

hi i work for toyota selling cars and know how our business manager works. A couple of things to consider.

Only take a pcp if you don't want to keep the car in 2 or 3 years time as the apr is generally higher. It is not designed for people who keep their car for long periods.

A pcp roughly works out over 3 years the same payments as straight hp or bank loan over 5 years.

On a pcp you are only renting the car it is never truely yrs mind you most people change every 3 years and lose boat loads on trade in value.

I got a pcp on my tt cos i wanted the option of just walking away from it in 18 months time should i want to by handing it back. On finance when you have paid half the loan you can simply hand it back with no more to pay as long as the car is not damaged. Also after a 3rd of the agreement has elapsed the company cannot repossess the vehical.

I dont profess to be an expert that is just my understanding of it. I don;t accept liability for any actions taken due to this statement and i always recommend you read all small print and fully understand what u are signing for.

If anyone wants anymore advice pm me and i will do my best to answer it


----------



## TTonyTT (Apr 24, 2006)

I just got a PCP quote from Audi.

Over 2 years, the APR was 10.2%, with a residual value of 61%. The cost for financing is cÂ£4k.

_(Over 3 years, the APR was 9.8% with a residual value of 53%. The cost for financing is cÂ£5.5k.)_

24 months looks good to me (for various non-financial reasons).

Option 2 is that I take the cash out of the bank. The cost of financing that option (ie interest only) is c5.5% on Â£31k for 2 years which is cÂ£3.5k.

So, the difference between tying up my cash in a car, or using Audi's money to finance it, over 2 years, is about Â£500.

Unless someone points out the obvious error in my thinking, I'm thinking I'll take Audi's money to finance my TT2, thank you very much. (Yes, I checked Sainsburys Bank's PCP deal - that's about Â£500 cheaper than Audi).


----------



## TTej (Sep 10, 2003)

TTonyTT said:


> Over 2 years, the APR was 10.2%, with a residual value of 61%. The cost for financing is cÂ£4k.
> 
> Unless someone points out the obvious error in my thinking, I'm thinking I'll take Audi's money to finance my TT2, thank you very much. (Yes, I checked Sainsburys Bank's PCP deal - that's about Â£500 cheaper than Audi).


Sorry i have always bought my cars outright aprt from my first TT which was part personal loan.

Tony just reading what your saying, does taht mean your getting a new TT for two years for a cost of Â£4,000??????????

or have i got the wrong end of the stick.


----------



## Karcsi (Mar 6, 2003)

It's difficult to compare the two. It probably depends what you plan to use the cash PCP "releases" due to lower payments for.

Using a loan, you save Â£500 in interest and surely you can sell the car for more then 61% after 2 years. However cash outflow over two years will be Â£34,500.

Using the PCP, your cash outflow will only be Â£16,000 (39% of Â£31k + Â£4k interest?).

So over the two years you will have on average Â£9k-ish more in your pocket using the Audi PCP.

Let's assume the cash that remains in your pocket you invest, or used to pay off some of your mortgage, or provides for some other expenditure you would otherwise have to get a loan for. And let's say in these cases the relevant interest rate is about 5%. That's Â£900 saved over the course of the two years.

So, to make the Audi PCP worth while, you are gambling that you could only sell the car for Â£400 more than the 61% residual value (Â£900 saved due to cash in hand, less Â£500 additional interest).

I think I've done this right. But, someone, please correct me if I'm wrong.

Of course, the other benefit of the Audi PCP is the feel good factor - lower monthly outlay and no worries about selling the car at the end of the 2 years.


----------



## Karcsi (Mar 6, 2003)

TTej said:


> TTonyTT said:
> 
> 
> > Over 2 years, the APR was 10.2%, with a residual value of 61%. The cost for financing is cÂ£4k.
> ...


Â£4,000 in financing and 39% of the purchase price (depreciation).


----------



## TTonyTT (Apr 24, 2006)

TTej said:


> Sorry i have always bought my cars outright aprt from my first TT which was part personal loan.
> 
> Tony just reading what your saying, does taht mean your getting a new TT for two years for a cost of Â£4,000??????????
> 
> or have i got the wrong end of the stick.


Me too - always bought for cash in the past. But considering other options for the TT2.

A new TT for Â£4k ... if I could get that deal, I wouldn't be telling you lot about it :wink:

The Â£4k is only the cost of borrowing the money from Audi Finance - ie interest charges. I'm comparing that interest cost, against the interest income that I would lose (cÂ£3.5k) if I take the money out of the bank to buy the car.


----------



## Leg (Jan 11, 2006)

Buy mine outright, otherwise u cant mod em


----------



## caney (Feb 5, 2004)

Leg said:


> Buy mine outright, otherwise u cant mod em


 outright!? so you're saying you literally have circa 25k just sitting around doing nothing  blimey wish i could accumalate that sort of money  i take it your wife knew you had that sitting around :wink:


----------



## ali_2006TT (Jan 5, 2006)

crazy buying outright IMO.

As this car has such a good residual value (62.7% est) you need only make payment on about 50% of the cost of the car and if you have any deposit it can be even less...

car can be moved on after 2 or 3 years and easily cover the 15-17K residual value plus a bit and you have only been making payments of aroung Â£350pm.

haven't done the actual figures but know from teh number of cars we (our co.) buy it will be close to this.


----------



## squiggel (May 16, 2006)

ali_2006TT said:


> crazy buying outright IMO.


crazy paying interest on credit if you dont have to IMO..


----------



## Karcsi (Mar 6, 2003)

That's it. Your outlay over two years may only be half the price of the car, but you are paying Â£4k extra in interest.

I may loose out on some savings interest, but I also prefer to buy outright. Unless I could extend my mortgage and leave my money in tax free savings - but the difference in interest rates is negligible to bother with.


----------



## Toshiba (Jul 8, 2004)

caney said:


> Leg said:
> 
> 
> > Buy mine outright, otherwise u cant mod em
> ...


I purchased the qS outright and will be doing the same for the MKII. Its ok saying get a loan and bank the cash but you pay a fortune in interest, and you are charged more than they pay you for keeping the money in the bank. Dont forget if you have a car that is already paid for you dont put in 25k or 33k, the MKII will cost me nothing like that amount when i get it.


----------



## TTonyTT (Apr 24, 2006)

If I buy outright, I lose the interest on Â£31k.

If I PCP, then I pay the financing cost on the difference between Â£31k and the projected residual.

Which is why the difference is only about Â£500.

So, I pay Â£500 more ... but I keep Â£31k in the bank, and have that money available for whatever I want to spend it on ...

Plus, I get to walk away from the car in 2 years time (if I want to) with no hassle of selling it privately, etc.

SEems like a deal to me ;-)


----------



## Toshiba (Jul 8, 2004)

But you still have to pay it on the backend else you have only 'rented' the car. I was tempted to do this as i get a car allowance so its basically a company car at the end of the day. Choose not to. Sounds like a good deal tho.


----------



## Karcsi (Mar 6, 2003)

Sounds good. But as I said - it depends on how accurate the residual value is of what you could sell it for, and what you will do with the cash the have in your pocket. Remember, unless your money is in tax free savings, you will pay 40% tax on the interest if you are a higher earner.

To be simplistic, you have 3 choices: PCP, loan, cash. We will assume that you can invest the money at 5%, tax free.

If you go down the PCP route, over two years you will earn about Â£2400 in interest on you cash, assuming you are paying Â£650 a month for the TT (31% of the purchase price + Â£4000 finance costs), and the pot deminishes by that amount each month. So net cost: Â£1600 + what ever you loose out for handing back the car for 61% rather than selling it yourself.

If you get a loan for 31k, you pay Â£3500 in interest, and gain about Â£3000 on the cash in the bank. Net cost: Â£500

Or you use your money. No finance costs - Net cost: NIL (Do not include how much interest you have missed out on - that's an economics cost, not a real world one).

Borrowing money is always going to cost more than what you can earn in sticking your money in the bank - no matter whether you wrap it up in a fancy PCP scheme or borrow the money the traditional way. The only way you can win is if you can invest your cash in something that will earn more than the finance is costing you. So that rules out traditional savings schemes (even tax free ones, realistically).

The PCP scheme not only charges more for borrowing less than half the amount of money. But there is the added uncertainty of the value of the car compared to what you could sell if for. Off course, they they allow you buy the car after two years for 61%, and then sell it at the market price, then that risk is mitigated.

Bottom line - I would get a normal loan (if you know you can put the cash to good use) or use cash.


----------



## Karcsi (Mar 6, 2003)

Toshiba said:


> But you still have to pay it on the backend else you have only 'rented' the car. I was tempted to do this as i get a car allowance so its basically a company car at the end of the day. Choose not to. Sounds like a good deal tho.


A PCP is basically a loan, at twice the rate of the loan. But, the downside is that after paying the finance, the car's not even yours. The only way this works out better than a loan is if the residual value of the car as per the PCP contract is more than the real world market price - and by some margin by my simplistic calculations.


----------



## Dotti (Mar 9, 2003)

Pay for it outright. One less expense per month to worry about.


----------



## ali_2006TT (Jan 5, 2006)

why on earth would you leave the cash in the bank as you all say, this is not the alternative.

I pay finance, the ~Â£30K available will go straight into property which will be making much much more than any bank account. Too many other things to do with the cash than have them tied up in a depreciating asset.


----------



## ali_2006TT (Jan 5, 2006)

if you work the figures out you could be driving a car worth twice what you curently drive for little more per month. If you plan to change after a few years why bother trying to own the car outright unless you want to mod it in which case you ruin it anyway.


----------



## Toshiba (Jul 8, 2004)

what if you've paid off your mortage ?


----------



## Karcsi (Mar 6, 2003)

ali_2006TT said:


> why on earth would you leave the cash in the bank as you all say, this is not the alternative.
> 
> I pay finance, the ~Â£30K available will go straight into property which will be making much much more than any bank account. Too many other things to do with the cash than have them tied up in a depreciating asset.


Property must be really cheap where you live. Most people already have one mortgage, and developing property abroad (e.g. eastern europe) is far too much hassle. But you're right, if you do have a good place to invest the cash, then a loan / PCP is worth. But if not, then it is not.


----------



## Dotti (Mar 9, 2003)

ali_2006TT said:


> why on earth would you leave the cash in the bank as you all say, this is not the alternative.
> 
> I pay finance, the ~Â£30K available will go straight into property which will be making much much more than any bank account. Too many other things to do with the cash than have them tied up in a depreciating asset.


Sometimes people have spare cash sitting about like this in a good savings account accumulating interest and if they have paid off their mortgage, have no other debt and a fair bit of savings which allows them to have the odd luxury in life to be able to dabble with and to be able to pay for something outright without the worry of debt or the additional monthly expense .

I've probably not explained that very well but I know what I mean and it works well in this household


----------



## Dotti (Mar 9, 2003)

Toshiba said:


> what if you've paid off your mortage ?


We have 3 years ago and I am only 34  :-*


----------



## Karcsi (Mar 6, 2003)

ali_2006TT said:


> if you work the figures out you could be driving a car worth twice what you curently drive for little more per month. If you plan to change after a few years why bother trying to own the car outright unless you want to mod it in which case you ruin it anyway.


That sums up modern society for me. Why own anything; just pay for use of it - even if it does cost you 2 or 3 times the price than owning it. Hence people who are financed up to the eye balls because they want to out do the Joneses. :roll: I'm sorry, but I am genetically programmed to only have things I can afford to own outright - getting a mortgage is the only exception, as I have no choice.


----------



## Toshiba (Jul 8, 2004)

Dotti said:


> Toshiba said:
> 
> 
> > what if you've paid off your mortage ?
> ...


so's my waiste :lol:


----------



## Dotti (Mar 9, 2003)

Here here Karcsi


----------



## Dotti (Mar 9, 2003)

Toshiba said:


> Dotti said:
> 
> 
> > Toshiba said:
> ...


 Your 35 LUV and your waist is 34 :-*


----------



## ali_2006TT (Jan 5, 2006)

Karcsi said:


> ali_2006TT said:
> 
> 
> > if you work the figures out you could be driving a car worth twice what you curently drive for little more per month. If you plan to change after a few years why bother trying to own the car outright unless you want to mod it in which case you ruin it anyway.
> ...


the last car I did it on was a mini...Â£1100 of interest in 3 years hardly doubled or tripled the cost of a Â£14K car!!

and I know what your saying about modern society but I don't use a credit card! it just doesn't make sense to tie money up in a depreciating asset....its called common sense!


----------



## Chunk (Aug 12, 2006)

I agree, I have no debts outside mortgages, have a few propertys and would rather put the money into more property than tie 32-33k up in a car that will guarantee a loss. Im looking at putting about 9-10k cash down then PCPing the rest. This leaves me with 20k to invest instead of owning outright and a return on that money also.


----------



## Karcsi (Mar 6, 2003)

ali_2006TT said:


> the last car I did it on was a mini...Â£1100 of interest in 3 years hardly doubled or tripled the cost of a Â£14K car!!


The average Joe is not as sensible to shop around. There are loads of people out that just look at whether the monthly payments are affordable (or not) and not the overall cost. Just look at companies like Yes Car Credit making a mint off the simple minded.



ali_2006TT said:


> and I know what your saying about modern society but I don't use a credit card! it just doesn't make sense to tie money up in a depreciating asset....its called common sense!


I use a credit card, but pay it off each month - provides protection if something should go wrong, and in the meantime my cash is in the bank accumulating interest.

As I said, using finance to purchase something only makes sense if you have a better alternative (more profitable) use for the cash. In most cases - for those of us who are risk averse, too busy, or don't have the links - that does not exist. So buying outright is the sensible option for them.


----------



## ali_2006TT (Jan 5, 2006)

agreed


----------



## ezzie (Jul 2, 2004)

ditto.


----------



## TTonyTT (Apr 24, 2006)

All - thanks for all the comments. Interesting to read all the views and opinions. And completely unrelated chatter (hi Dotti).

I've just about decided to Audi Finance PCP the TT2.

OK, I could save Â£500 by getting the money from Sainsburys, but (a) moving the cash from one desk in Audi to another desk in Audi has got to be easier than dealing with a remote Sainsburys call centre, and (b) I've saved more than Â£500 on the car, so I'll let them have some it back :wink: No-one calls me greedy.

Why PCP ... because this way I get to put Â£31k of capital into investments rather than a depreciating "asset", and because - in 2 years time - I can either just walk away from the car, or buy it and sell it (if the market value is way over the residual), or buy it and keep it (if I really really love it then).

Not long now ....


----------



## steve_b (Aug 4, 2006)

I've been looking at the figures and the discussions & I've got to say I'm swinging towards the bank loan route. 2 reasons really

1. trying to compare finance charges like-for-like is difficult with the implications of the final value of the car versus the final balloon payment. But I can get a loan for APR of 5.2%, whereas PCP from Audi is at best 10.2% and at worst an undisclosed figure on an "unregulated" illustration, as I received from the business manager from my local dealer. In other words he is giving me information in such a manner that the FSA does not approve.

2. A bank loan gives you total freedom to sell or change the car when you like. PCP charges are high early in the term - what if I don't like the TT (I've only had a short drive so far) - or what if they release a 2.0 TFSIQ mid 2007 ??.

Basically the Audi PCP encourages the involvement of a dealer to change your car later, or to offer a favourible settlement mid-term. With the dealer margins on car trade-ins as they are I'd rather have the choice to sell privately.

Raising the finance through mortgage can be a little cheaper than a personal loan, but if your maximising your potential to invest in property then this is not an option.

In a nut-shell I don't trust the dealers. Use them to buy a new car, for essential servicing, and thats the end of their involvement........


----------

