PCP finance.

L-M

wandatowell wrote: »

Quick question, if you have the cash can you pay the balloon payment with the deposit at the start of the finance agreement?

No but what you can do is put the cash in the bank and let it earn around 4 euro interest over the three year period.

But seriously, unless it was very low Apr ie. 0% you would be better off on the normal finance route.

Limerick man

Limerick man wrote: »

Okay you're still missing out.

The excess mileage thing only becomes an issue if your mileage is astronomical and the value of the car is going to be less than the gfv or if you want to literally hand the car and keys back and walk away and never see it or the garage again (Ie. If you were leaving the country etc.)

Every other instance it's going to be what your car is worth vs. The gfv. Your gfv effectively becomes a balloon.

Thanks, yeah I think I've finally got it ! Bout time.

Limerick man

Limerick man wrote: »

No but what you can do is put the cash in the bank and let it earn around 4 euro interest over the three year period.

But seriously, unless it was very low Apr ie. 0% you would be better off on the normal finance route.

Not necessarily , PCP allows you 3 years to decide if you want to own the car after 3 years.

What people need to do is add up the total payments, including deposit + GFV and see ti it works out more expensive than normal finance.

Get the garage to calculate the total cost to buy after the 3 years and compare it to normal finance.

The cost for me to lease the Leaf is a lot less than if I went with normal finance or bank loan, I do not want to own it because I know the MK II and other cars will be available by Q4 2017 with a lot more range so PCP suits me perfectly.

positron

Not sure if this has been mentioned but I noticed Citroen's 0% APR PCP deal when I was looking into C4 Grand Picasso..

Their PCP calculator doesn't list the model I want, but taking a C4 Picasso as an example, it works out like this:

New C4 Picasso: €24,945

Under their 0% PCP, the payout be like this:

Deposit: €7,747
36 monthly installments: €259.61
Final payment (or hand the car back in): €8,371

Total cost: €25,824.06

Which is only about €850 more than paying for the car outright. Mileage restriction of 60k kms over three years.

It looks like decent-ish proposal for someone who could have been considering buying new outright. It's a bad deal if someone can't afford new but feels they could take this route to get a new car (and then live with the burden..)

jlm29

positron wrote: »

Not sure if this has been mentioned but I noticed Citroen's 0% APR PCP deal when I was looking into C4 Grand Picasso..

Their PCP calculator doesn't list the model I want, but taking a C4 Picasso as an example, it works out like this:

New C4 Picasso: €24,945

Under their 0% PCP, the payout be like this:

Deposit: €7,747
36 monthly installments: €259.61
Final payment (or hand the car back in): €8,371

Total cost: €25,824.06

Which is only about €850 more than paying for the car outright. Mileage restriction of 60k kms over three years.

It looks like decent-ish proposal for someone who could have been considering buying new outright. It's a bad deal if someone can't afford new but feels they could take this route to get a new car (and then live with the burden..)

Except for the mileage restriction. I'm sure not many people who would need a new car would have mileage that low. I know for me, it would end up costing a good bit more because of that.

Drummerboy08

The vast majority of people I speak to barely cover 15k km per year.

positron

jlm29 wrote: »

Except for the mileage restriction. I'm sure not many people who would need a new car would have mileage that low. I know for me, it would end up costing a good bit more because of that.

And if the plan is to keep the car after three years anyway, does the mileage restriction matter? Would Citroen care?

Drummerboy08

positron wrote: »

And if the plan is to keep the car after three years anyway, does the mileage restriction matter? Would Citroen care?

Doesn't matter if you plan on keeping the car.

15 K Kms per year ? I can only dream !

Seems like a decent offer. The Leaf would have been a lot cheaper for me if I did that small mileage per year. Probably 300 with 5K down.

Shame Nissan don't broaden their electric range. An electric X-trail 4x4 and 300 Hp would be really cool and 200 miles !

jlm29

Drummerboy08 wrote: »

The vast majority of people I speak to barely cover 15k km per year.

Jeepers! I've done 9k km since the start of march. I thought I was average enough!

marty_crane

I'm debating this option either now or in January and wondered if any Boardsie has any experience of the GMFV yet?

Great thread and very informative for someone like me who's still trying to find the catch in all this....

sheff the ref

I looked and thought about it, but my finances are being diverted elsewhere now anyway. However PCP wouldnt suit me unless I was prepared to buy out the car after 3 years because my mileage is simply too high.

186,000km on my own car bought new in April 2011. That is over 40,000km a year.

marty_crane

sheff the ref wrote: »

I looked and thought about it, but my finances are being diverted elsewhere now anyway. However PCP wouldnt suit me unless I was prepared to buy out the car after 3 years because my mileage is simply too high.

186,000km on my own car bought new in April 2011. That is over 40,000km a year.

I'm doing about 18,000km pa and looking at 0% Seat Leon or Skoda Rapid or Octavia, all in 16.D form. All have a GMFV of around €8500 but 2012 models in all are currently selling substantially above that so is that where the catch is perhaps? I understans the GMFV is "minimum" but wondered if anyone knew the reality, which is where I presume you're coming from re buying the car outright after 3 years.

sheff the ref

sheff the ref wrote: »

I looked and thought about it, but my finances are being diverted elsewhere now anyway. However PCP wouldnt suit me unless I was prepared to buy out the car after 3 years because my mileage is simply too high.

186,000km on my own car bought new in April 2011. That is over 40,000km a year.

No, pcp isn't really worth it at your mileage. I got a 25,000 Km limit on the Leaf but I can justify PCP because the savings on petrol are paying half the repayments on the car not to mention the savings on maintenance and motor tax V the MK II Prius which was a very fuel efficient car.

At your mileage you wouldn't even get PCP as far as I'm aware.

If I can keep close to the contract limit then hopefully the car will be worth more than the GFV which is usually the case and I'm hoping demand will grow for 2nd hand electrics now that the battery in the late 2013 + leaf's is proving to be much more robust , 2nd hand leaf's will be ultra cheap to fuel, great to drive and need feck all maintenance and so far ultra reliable. The Leaf is holding it's value well so far but anything I get above the GFV will be money off the next contract !

marty_crane

marty_crane wrote: »

I'm doing about 18,000km pa and looking at 0% Seat Leon or Skoda Rapid or Octavia, all in 16.D form. All have a GMFV of around €8500 but 2012 models in all are currently selling substantially above that so is that where the catch is perhaps? I understans the GMFV is "minimum" but wondered if anyone knew the reality, which is where I presume you're coming from re buying the car outright after 3 years.

The GFV is the absolute minimum they expect in 3 years with the agreed mileage so if you can keep the mileage below the agreed then you'll get even more off the next car.

I would expect the GFV to be got provided the car is in good condition with reasonable wear and tear, hand it back in bad condition and you will most likely not even see the gfv or go way over the mileage. I'm not sure what happens over the mileage if this comes from the gfv or if they charge you.

mickdw

marty_crane wrote: »

I'm doing about 18,000km pa and looking at 0% Seat Leon or Skoda Rapid or Octavia, all in 16.D form. All have a GMFV of around €8500 but 2012 models in all are currently selling substantially above that so is that where the catch is perhaps? I understans the GMFV is "minimum" but wondered if anyone knew the reality, which is where I presume you're coming from re buying the car outright after 3 years.

You are doing the exactly correct thing by looking at 3 year old values currently. This will help you to judge where you will be 3 years down the line.
Now you will owe the gfv at end of year 3 so ideally you want the car to be worth much more than that figure so the fact that you see 3 year old version currently selling for far in excess of gfv is a good thing and certainly not a catch as you put it. Any value in your car over and above gfv gives you deposit on next deal.

vandriver

If you want to buy the car outright in 3 years you pay the GMFV to the dealer.
No mileage check,no condition check,just pay the known amount.

pippip

mickdw wrote: »

You are doing the exactly correct thing by looking at 3 year old values currently. This will help you to judge where you will be 3 years down the line.
Now you will owe the gfv at end of year 3 so ideally you want the car to be worth much more than that figure so the fact that you see 3 year old version currently selling for far in excess of gfv is a good thing and certainly not a catch as you put it. Any value in your car over and above gfv gives you deposit on next deal.

The only bit I'd add to this would be if a new model comes out in the next three years, that would make the comparison now inaccurate and they should expect lower.

mickdw

vandriver wrote: »

If you want to buy the car outright in 3 years you pay the GMFV to the dealer.
No mileage check,no condition check,just pay the known amount.

Yep. After all, if you are buying the car, nobody cars what condition it is in except the person who has bought it.

marty_crane

I'm currently driving an old gas guzzler so the difference in current running costs and running costs/finance on a new car may be almost cost neutral if I get the right deal (tax, fuel, NCT, maintenance etc).

Frankly, at the minute I most likely can't squeeze enough for a personal loan in the traditional sense but in 3 years I should be better off financially, hence my predicament. The whole notion of a PCP suits-so long as I don't get burned at the end!

Thanks for the replies, very informative.

mickdw

pippip wrote: »

The only bit I'd add to this would be if a new model comes out in the next three years, that would make the comparison now inaccurate and they should expect lower.

Yep absolutely.
Still that is something to be aware of regardless of how one is paying for a car. Its never so wise to buy any model towards the end of its life cycle when thinking resale.

mickdw

marty_crane wrote: »

I'm currently driving an old gas guzzler so the difference in current running costs and running costs/finance on a new car may be almost cost neutral if I get the right deal (tax, fuel, NCT, maintenance etc).

Frankly, at the minute I most likely can't squeeze enough for a personal loan in the traditional sense but in 3 years I should be better off financially, hence my predicament. The whole notion of a PCP suits-so long as I don't get burned at the end!

Thanks for the replies, very informative.

Right so give an outline of what you are buying ,
What you are trading in or what deposit you are paying up front and what the gfv is and we will have an idea of how you may work out at year 3.

sheff the ref

A buddy of mine has bought a new Audi A6 recently on PCP.

His rationale was that a secondhand model up to 3 years old wouldnt come cheap and after 3 years he still has a 3 year old Audi that he has owned from the start. His payments are relatively low on PCP compared to a standard buyout, and ultimately he will just keep his car and pop down to the credit union or whatever to pay off the remaining lump sum at the end of the 3 years if the mileage is too high to continue the PCP.

ofcork

I don't know with the deposit and the 3 years of paying would be near the cost of a 2012 id say.

bilbot79

It's a load of */&#^. If you can't afford the car you want you have to save up for it. If you can't save for it then you clearly can't afford it

Drummerboy08

bilbot79 wrote: »

It's a load of */&#^. If you can't afford the car you want you have to save up for it. If you can't save for it then you clearly can't afford it

How did you buy your house?

PCP is really good for those who change their car every 3 years or less. But it shouldn't be seen as a means of buying a car if you otherwise couldn't afford it. Then you may as well go for regular finance and pay it over the 5 years. But PCP can be a good way of helping you decide if you want to keep the car after the 3 years but I'm not sure many people would choose to pay the lump sum which would pay xx years on a new contract.

Really high mileage drivers would probably be better off buying 2nd hand or buying and keeping for a good few years.

sheff the ref

ofcork wrote: »

I don't know with the deposit and the 3 years of paying would be near the cost of a 2012 id say.

I dont know, he did the sums, not me.

However his point was that after say 3 years of payments on a 2012, he would have a 6 year old car and with high mileage at that stage wouldnt know the first three years history of the car.

Whereas with PCP after 3 years he would have a 3 year old car that he knew the history of and drove from new and after a further three years, his 6 year old car would be a car he knew better.

badgerhowlin

What you think.

Is PCP for me.

Looking to get VM touran 34K
Deposit of 7k(trade in and own money)
Annual mileage is about 20k but might be up to 10k higher a year.
MFV is said to be 11804
Monthly repayments 452
APR 0%

But at the end of the 3 years we will be keeping the car.

mickdw

badgerhowlin wrote: »

What you think.

Is PCP for me.

Looking to get VM touran 34K
Deposit of 7k(trade in and own money)
Annual mileage is about 20k but might be up to 10k higher a year.
MFV is said to be 11804
Monthly repayments 452
APR 0%

But at the end of the 3 years we will be keeping the car.

Firstly if you were to change at year 3, the car would need to be worth 18800 in order for you to put forward a similar deposit without injecting more cash at that stage.
What are 3 year old tourans currently selling for?

If you intend to keep it and you are happy with the monthly figure, it's hard to see how zero percent finance could be a bad deal.
Just make sure you are getting a reasonable trade in on your own car.