PCP finance.

grogi · 10-02-2017 01:29PM

techdiver wrote: »

Part in bold was the question...

Then the answer is YES, it is for him... Why not? Because he'll unfreeze some cash?

techdiver · 10-02-2017 01:38PM

grogi wrote: »

Then the answer is YES, it is for him... Why not? Because he'll unfreeze some cash?

I'm not following your logic?

He wants to do PCP. His current car is worth 50% of the new car. He can still trade in his current car, the dealer will take 30% of the value of the new car from the trade in amount and refund him the rest.

Whether he chooses to do this is his decision, but I answered the question as put.

Edit: his question was "is pcp out for me?", meaning "can I not avail of pcp?". I answered "nope", meaning yes you can avail of pcp.

Ron Scott · 10-02-2017 06:01PM

Techdiver, thanks for your clear and helpful reply to my question.

rob316 · 10-02-2017 06:31PM

Some great cars on these PCP deals, its just the 3 year depreciation is frightening.

SteelyDanJalapeno · 10-02-2017 06:41PM

A friend is trading a Bog standard golf he got in 2014 in PCP to upgrade.

Skoda offered him 15k, VW offered 17.5k car was probably about 26k new.

jca · 10-02-2017 07:19PM

TiltedBrain wrote: »

A friend is trading a Bog standard golf he got in 2014 in PCP to upgrade.

Skoda offered him 15k, VW offered 17.5k car was probably about 26k new.

That's a great offer from VW. How much does he owe? In other words, how much of a deposit will he have going into the new PCP deal? Skoda are getting very stingy with their trade in offers, they have short memories these car dealers.

SteelyDanJalapeno · 10-02-2017 07:29PM

jca wrote: »

That's a great offer from VW. How much does he owe? In other words, how much of a deposit will he have going into the new PCP deal? Skoda are getting very stingy with their trade in offers, they have short memories these car dealers.

I believe about 11k so equity is pretty much the same as his initial 1st time payment on the Golf. monthly's going up thou as he's upgrading

batman1 · 10-02-2017 09:14PM

Would it be a reasonable move to trade in and get a new car on pcp, then change again after 3 years, keeping repayment the same or similar and the buy the car at the end of the 2nd deal. That way having 6 years to save for the buyout and having 2 new cars in the meantime and a nice 3yr old car to own at the end.

My assumption is based on similar cats being bought etc

bazz26 · 10-02-2017 09:23PM

You maybe forgetting that when you trade back in car no1 in 3 years time you may have to put money towards a deposit for car no2 in order to keep similar monthly repayments as the first 3 years. So in order to put as little money into the deposit for car no2, you need the trade in value of car no 1 to be well above it's agreed GFV so you can use that towards the deposit for car no2.

You need to remember that these cars are still being paid for, it's just the structure of how they are paid for that is different.

SimonTemplar · 10-02-2017 10:51PM

Does anyone have a rough idea of what a Highline Golf (circa 30k) PCP arrangement would look like with 30% deposit?

mloc123 · 10-02-2017 10:56PM

SimonTemplar wrote: »

Does anyone have a rough idea of what a Highline Golf (circa 30k) PCP arrangement would look like with 30% deposit?

I would be surprised if VW don't have a calculator on their site to work that out.

SimonTemplar · 10-02-2017 11:14PM

mloc123 wrote: »

I would be surprised if VW don't have a calculator on their site to work that out.

Couldn't find it on their main site, but a Google search brought me to

http://volkswagenbankcalculator.com/dealer_apr_calculator_for_pcp.php?id=q6k=

digitaldr · 11-02-2017 06:45PM

Interesting article in the Guardian today.

NIMAN · 11-02-2017 09:13PM

That makes for scary reading.

Considering PCP is likely huge in Ireland now, I'd like to see something like Prime Time do a piece on it, to alert the public to the dangers.

The opening lines of that article highlight the main issue:

A huge increase in the amounts borrowed by already indebted households in Britain and the US to buy new vehicles is fuelling fears that “sub-prime cars” could ignite the next financial crash.

If you are a household in debt, then surely you should not own a new car?

grogi · 11-02-2017 09:23PM

NIMAN wrote: »

That makes for scary reading.

Considering PCP is likely huge in Ireland now, I'd like to see something like Prime Time do a piece on it, to alert the public to the dangers.

For the public the biggest danger is that they will handle the car back and get a bicycle or a banger. Painful, but doable...

There is substantial risk for the financing institutions - but they want to eat as much cake while the market is fluid. Once it collapses, with piles of 3 year old cars that nobody wants, they will again reach to the public to help bail them out. I can only hope that we have learned the lesson...

NIMAN · 11-02-2017 09:31PM

To be fair, the end of the article does say that all these loans are performing incredibly well, with tiny default rates.

Add to this the fact that these are short term loans versus mortgages of up to 35yrs, its maybe not as scary. But the fact that there seems to be a bubble forming is a worrying part.

16thelegend · 11-02-2017 09:45PM

Volkswagen sales person today "PCP"

Views on the below.

VW Tiguan 2017

1. Cash Price €31,235
2. Deposit €7,000
3. Amount Financed, €24,235
4. interest charge €2.050.74
5. Doumented fee €75.00
6. Completion Purchased instalment €75.00
7. Total repayable €26,435.24
8. hire purchased €33,435.24

36 payments €373
BALLON PYMENT €12,929

mickdw · 11-02-2017 11:31PM

Not bad but what is the interest rate on that. possibly 3.9

Also, to get 7k back in equity at end, it would have to be worth 20k. That will not happen so possibly have a look at the figures with about 4.5k deposit and see if it's affordable monthly. That would be closer to a sustainable long term deal.

mickdw · 11-02-2017 11:45PM

Had a look at a new Mercedes e220d yesterday.
Not a fan of 4 cylinder diesel but this was acceptable to be fair.
Auto gear changes smooth but making a bit too much noise to get going in a hurry.
Nice car. wanted circa 15k deposit and 600 per month for an e220d avantgarde with night pack.
Reasonable enough figures for what it is.
Lovely looking cars with a bit of spec although the interior is not as impressive as it would appear in the photos. I feel the interior design will date super fast.

NIMAN · 12-02-2017 12:21AM

mickdw wrote: »

Had a look at a new Mercedes e220d yesterday.
Not a fan of 4 cylinder diesel but this was acceptable to be fair.
Auto gear changes smooth but making a bit too much noise to get going in a hurry.
Nice car. wanted circa 15k deposit and 600 per month for an e220d avantgarde with night pack.
Reasonable enough figures for what it is.
Lovely looking cars with a bit of spec although the interior is not as impressive as it would appear in the photos. I feel the interior design will date super fast.

Is that the one that comes with headlights?;)

I'll get me coat.

mickdw · 12-02-2017 01:15AM

yep but just the one headlight. You need winter pack as well to get the other lamp.

MarkN · 12-02-2017 02:09AM

mickdw wrote: »

Had a look at a new Mercedes e220d yesterday.
Not a fan of 4 cylinder diesel but this was acceptable to be fair.
Auto gear changes smooth but making a bit too much noise to get going in a hurry.
Nice car. wanted circa 15k deposit and 600 per month for an e220d avantgarde with night pack.
Reasonable enough figures for what it is.
Lovely looking cars with a bit of spec although the interior is not as impressive as it would appear in the photos. I feel the interior design will date super fast.

15k and 600 pm. Not exactly cheap is it?

mickdw · 12-02-2017 02:22AM

MarkN wrote: »

15k and 600 pm. Not exactly cheap is it?

Not cheap bu they are using 37 percent gfv so there should be a fair bit of equity at end. bmw are selling with 44 percent leaving f all for deposit next time.
Went in looking for a 16 reg but they had no interest in selling one. pushing new all the way.
600 per month is too much for me.

carsfan2 · 12-02-2017 09:52AM

mickdw wrote: »

Not cheap bu they are using 37 percent gfv so there should be a fair bit of equity at end. bmw are selling with 44 percent leaving f all for deposit next time.
Went in looking for a 16 reg but they had no interest in selling one. pushing new all the way.
600 per month is too much for me.

Did they offer you the 10% reduction off list? Are they really ending this or do you think it will extend?

batman1 · 12-02-2017 10:56AM

bazz26 wrote: »

You maybe forgetting that when you trade back in car no1 in 3 years time you may have to put money towards a deposit for car no2 in order to keep similar monthly repayments as the first 3 years. So in order to put as little money into the deposit for car no2, you need the trade in value of car no 1 to be well above it's agreed GFV so you can use that towards the deposit for car no2.

You need to remember that these cars are still being paid for, it's just the structure of how they are paid for that is different.

Good point. It's all a bit hazy, perhaps intentionally.
However, looking at a random suv, the Kia sportage EX. If I trade in for 8k and the gfv is 12.5k that leaves payments around 350. 3 years old sportage retail around 19k. Assuming these figures, at a guess, and the mileage etc rules followed, I would have a equity of 6.5 towards the 2nd car. It appears that the gfv remains constant so the repayments would increase slightly due to the smaller deposit.

Is this right ?

mickdw · 12-02-2017 11:01AM

carsfan2 wrote: »

Did they offer you the 10% reduction off list? Are they really ending this or do you think it will extend?

The car he quoted for was in Stock and was just over 52500. That was the price less the 10 percent. It had a few bits of spec. He was discounting it down to 51000 for straight sale.
I would expect far better discount for straight sale and buying a car out of stock.
He said the 10 percent is ending but sure he would anyway. Maybe it will end but I only see it being replaced with zero percent interest or something similar. Can't see them making the cars harder to sell. If they saw a need to discount in January sales time, they surely will need something for march onwards.

mloc123 · 12-02-2017 01:56PM

batman1 wrote: »

Good point. It's all a bit hazy, perhaps intentionally.
However, looking at a random suv, the Kia sportage EX. If I trade in for 8k and the gfv is 12.5k that leaves payments around 350. 3 years old sportage retail around 19k. Assuming these figures, at a guess, and the mileage etc rules followed, I would have a equity of 6.5 towards the 2nd car. It appears that the gfv remains constant so the repayments would increase slightly due to the smaller deposit.

Is this right ?

Not quite. If they are selling for 19k you could probably expect a trade in value from the dealer between 14-16k I would guess. So maybe 1500-3500 equity.

jca · 12-02-2017 04:21PM

mloc123 wrote: »

Not quite. If they are selling for 19k you could probably expect a trade in value from the dealer between 14-16k I would guess. So maybe 1500-3500 equity.

Spot on, people see 3 year old golfs, Octavia's etc and think that's what they'll get for their car in 3 years time.

SteelyDanJalapeno · 12-02-2017 04:56PM

jca wrote: »

Spot on, people see 3 year old golfs, Octavia's etc and think that's what they'll get for their car in 3 years time.

As I posted about 20 posts back, bog standard 3 yr old golf trade in was priced at 17.5k with vw

grogi · 12-02-2017 06:16PM

jca wrote: »

Spot on, people see 3 year old golfs, Octavia's etc and think that's what they'll get for their car in 3 years time.

That's what they are getting when paying full RRP. The RRP has a built-in trade-in allowance to let client feel he did a deal of century and sold his old banger for heaps of cash...

PCP finance.

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