PCP finance.

Marcusm

R.O.R wrote: »

You pay the depreciation between the cost price and the GMFV.

You pay interest on the cost price.

The interest should be stated as a Apr based on cost price less deposit as that is the amount by if finance being raised.

nebraska132

R.O.R wrote: »

Try this - I've checked it against a few PCP figures that you can get online, and it's not giving exactly the same results but it's within a few Euro.

Thanks you for that it's very helpful!

artheb

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

TheShow

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Sounds logical.

For those on about the interest cost, be under no illusions that the finance amount is the cost of the car less the deposit, and interest will be accrued to the outstanding total balance as the facility amortises.

artheb

TheShow wrote: »

Sounds logical.

For those on about the interest cost, be under no illusions that the finance amount is the cost of the car less the deposit, and interest will be accrued to the outstanding total balance as the facility amortises.

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

grogi

artheb wrote: »

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

No, it is not. The interest is charged on the remaining part = price - deposit.

Remember that the RRP is not what you pay - there are documentation charges, delivery charges etc.

acronym Chilli

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

What's the purchase price of the car? i.e. the cash price to buy outright today?

artheb

acronym Chilli wrote: »

What's the purchase price of the car? i.e. the cash price to buy outright today?

Around 35k, can't remember exactly. New one same spec is around 55k

Klopp

artheb wrote: »

Around 35k, can't remember exactly. New one same spec is around 55k

I thought apr on all Audi's new or old was 7.9?

bazz26

Just take note the A6 is being replaced by a brand new model early next year so that will have a bearing on resale values of the current model. Equity in a 2015 model might not be great at the end of your PCP term so you may have to put a much larger deposit into your next PCP deal to keep similar monthly repayments. Something to be aware of.

Cyrus

Klopp wrote: »

I thought apr on all Audi's new or old was 7.9?

doubtful

last few i have seen was 0 and 2.9%

artheb

bazz26 wrote: »

Just take note the A6 is being replaced by a brand new model early next year so that will have a bearing on resale values of the current model. Equity in a 2015 model might not be great at the end of your PCP term so you may have to put a much larger deposit into your next PCP deal to keep similar monthly repayments. Something to be aware of.

Totally aware of that and not really concerned. I'll be happy if trading value on the car with extra miles would cover the balloon payment. I'm happy to pay another 7k and drive same type of car again. I do a lot of miles and I'll never make money on the car. On the Passat CC I lost around 8k over two years not counting the repairs I did.

artheb

artheb wrote: »

............. On the Passat CC I lost around 8k over two years not counting the repairs I did.

Would you expect to lose about €15k on the A6 over 2 years?

artheb

Augeo wrote: »

Would you expect to lose about €15k on the A6 over 2 years?

Hopefully little bit less, maybe around 12-13k time will show.

TheShow

artheb wrote: »

That's very complex statement. In my opinion the interest is charged from the total amount even though you finance the part of it. I just did a simulation for PCP over 3y and loan for full amount for 3 years. Cost of credit is almost the same. See attached and correct me if I have it wrong.

Loan amount is wrong should be 14000 (cost less deposit).

boardsuser1

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

TheShow

Cork Truck Driver wrote: »

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

talk to MABS or a similar agency. if the car gets repossessed or she does not engage with the lender, her icb will be screwed and she will have great difficulty in getting a loan in the future.

artheb

Cork Truck Driver wrote: »

Next door neighbour got a car last year on PCP,her relationship has now ended and she wanted to hand back the car, she was told she now can't and has fallen behind on the repayments as a result of the loss of income.

Anyone here in the know who can offer (non legal) advice i could pass on?

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

Casati

artheb wrote: »

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

She needs to contact the finance company used by the manufacturer e.g Volkswagen bank, and get a settlement figure. If the car is only a year old she should then go to the original dealer and indeed other franchise dealers and ask them to buy the car off her. If they offer her more than the settlement figure then she will be home and dry. you can't get somebody else to take over her finance

Casati

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Sounds interesting. Question, if the value of the car is less than the GFMV in three years, how much of a penalty would have to pay assuming you stick 120k on it?

artheb

Casati wrote: »

Sounds interesting. Question, if the value of the car is less than the GFMV in three years, how much of a penalty would have to pay assuming you stick 120k on it?

I'll not be paying any penalties. I'm trading the car so in that case it is deprecation like with any other car financed or not. Value may as well be below GFMV. In that case I will need to have bigger deposit for a new car.

boardsuser1

artheb wrote: »

What type of car it is? She could try to find someone to "buy it back/takeover pcp finance" from her. That might be possible I suppose.

It's a 162 Peugeot 308.

The car has been keyed on all 4 corners also.

I assume it would need a full respray as a result.

It's metallic.

boardsuser1

Casati wrote: »

She needs to contact the finance company used by the manufacturer e.g Volkswagen bank, and get a settlement figure. If the car is only a year old she should then go to the original dealer and indeed other franchise dealers and ask them to buy the car off her. If they offer her more than the settlement figure then she will be home and dry. you can't get somebody else to take over her finance

She's fcuked there I'd say. She has it 12 months and is about 3 months behind.

DaveyDave

BadMor wrote: »

Wow. Franky, that you can't remember what you paid for the car is shocking.

My advice - Do not go near PCPs. They are a scam. As a rule of thumb, if anything is too complicated to understand, then do not do it. If you cannot afford a car though traditional methods (savings/loan), then walk away and buy an older model.

How are PCPs a scam? If you went in to pay cash up front on a car I'd pay the exact same as you. Why would you suggest people are better off geting a car with a loan? If you can afford to get a car on a loan, you can get it on PCP. Why would I want to get a loan and pay 8-9% interest when I can get it cheaper on PCP?

BadMor

DaveyDave wrote: »

How are PCPs a scam? If you went in to pay cash up front on a car I'd pay the exact same as you. Why would you suggest people are better off geting a car with a loan? If you can afford to get a car on a loan, you can get it on PCP. Why would I want to get a loan and pay 8-9% interest when I can get it cheaper on PCP?

They lure people into thinking they can afford a car that they cannot. If you can afford a car through traditional methods and you fully understand the pcp contract then maybe a pcp is for you. Beware though that the lower interest rates advertised are applied to the entire car price by some dealers - so the rate on the financed about is actually 8-9%,

When in a dealership, potential buyers are not made aware of the potential pitfalls like the unfortunate lady who has separated from her partner - e.g. in the event of loss of earnings, malicious damage to car etc, you cannot sell the car, it belongs to the dealership and they can chase you for the money. If you do not fully understand that you need to pay the GMFV at the end, you do not own the car - most people i know who have taken out pcps are not aware of this. I have a neighbour who bought a Range Rover paying 15k deposit and focused on the 500EUR monthly payments - she thinks she has 30k to put towards her next car at the end of the 3 years.

From my experience, this product preys on the vulnerable and bamboozles them complication financial structures. That a standard car salesman has to send you to the finance team to explain it tells you everything.

Casati

artheb wrote: »

I've been reading the thread and thought I would share a deal I went for.

Audi A6 s line black edition 2015(152) with 22000km on the clock 1y Audi warranty,1y road assistance

traded old car got 7000e
PCP on used car for 3 years
monthly 377e
APR 3.9
mileage 32000km
GFMV 17000

I plan to do over 40000km a year. I am aware that it will impact my GFMV. My plan is to renew the PCP after 2 years. I am aware that I would need to come up with extra cash to enter a new deal but I have no problem with that.

I also wanted to comment on buying an older car for less with better spec. It is definitely a good option if you dont plan to do a lot of mileage. I bought a 2011 Passat CC in 2015 with 160000km on the clock. With that mileage there are wear and tear components which need to be replaced and that cost extra money and downtime.
I had to do following after couple of thousand km: Brake discs and pads, timing belt (seller paid for it), clutch, flywheel. I knew about discs and pads but clutch and flywheel was unexpected.
In the meantime few sensors died which cost 100e each. Within 2 years I did 100000km and EGR valve died - 500e to replace with Indy. Car never totally failed on me but it cost me downtime which I don't want.

When you buy a new car or almost new you don't need to worry about any of those things because that will be a problem of future owner. You also do not need to worry about NCT because you will not have one. I rather to pay more and have reliable car with warranty in place. Just my 2c.

I am interesting to hear about renewals done on PCP.

Thanks!

Very long post with a simple message, buying an older car is cheaper than a newer one.

Casati

artheb wrote: »

I'll not be paying any penalties. I'm trading the car so in that case it is deprivation like with any other car financed or not. Value may as well be below GFMV. In that case I will need to have bigger deposit for a new car.

Fair enough, I read the post incorrectly that you'd be handing I back. Overall I think it's great that they are offering low Apr on two year old cars, would make me look at this further next time round

sheff the ref

As I see it PCP is not a scam. It is quite straightforward and more often than not the graphic images of a car split into three explain it visually

1.You put up your deposit, generally a trade in
2.You make payments on a fixed amount
3.You are left with a car after 3 years which you can upgrade (depending on a range of factors and potential changes to repayments), pay a final sum to keep, or else hand it back

It couldn't be more straightforward

Lantus

BadMor wrote:

When in a dealership, potential buyers are not made aware of the potential pitfalls like the unfortunate lady who has separated from her partner - e.g. in the event of loss of earnings, malicious damage to car etc, you cannot sell the car, it belongs to the dealership and they can chase you for the money. If you do not fully understand that you need to pay the GMFV at the end, you do not own the car - most people i know who have taken out pcps are not aware of this. I have a neighbour who bought a Range Rover paying 15k deposit and focused on the 500EUR monthly payments - she thinks she has 30k to put towards her next car at the end of the 3 years.

If I get a 30k car loan from boi and lose my job and stop paying the loan are you saying I am safe? That they won't come after me or seize the car to pay the debt.

There are people that enter into all sorts of financial arrangements without fully understanding them. It's not a reason to not have them. Sure half the country took out mortgages on overpriced property that still isn't worth the loan value today.

artheb

sheff the ref wrote: »

As I see it PCP is not a scam. It is quite straightforward and more often than not the graphic images of a car split into three explain it visually

1.You put up your deposit, generally a trade in
2.You make payments on a fixed amount
3.You are left with a car after 3 years which you can upgrade (depending on a range of factors and potential changes to repayments), pay a final sum to keep, or else hand it back

It couldn't be more straightforward

4. Trade the car, dealer pays the balloon and if you have additional equity you can put it toward a new car. Equity may not be high so you may need to come up with extra cash. to keep the same repayments. This is what many people do not understand. They think that after 3 years car will be worth much more than GFMV and they will have enough equity to enter a new deal without extra cash.