PCP finance

masterboy123

Anyone ever used PCP finance to buy a car?

Is it a good option to go ahead?

I cant understand the final option in this kind of deal i.e. after 3 years, how do they decide how much balance is left to be paid?

pippip

http://www.boards.ie/vbulletin/showthread.php?p=88363360

Here's all you need.

mickdw

masterboy123 wrote: »

Anyone ever used PCP finance to buy a car?

Is it a good option to go ahead?

I cant understand the final option in this kind of deal i.e. after 3 years, how do they decide how much balance is left to be paid?

They tell you at the start what the final payment amount is to be.
You can buy the car at the end of year 3 for that known amount regardless of condition etc.
The amount is set by the manufacturer and the car will generally be worth at least that amount.

masterboy123

its getting clear now.

if i don't have final payment ready at the end of 3rd year, then, can i pay in installments for the final payment?

mickdw wrote: »

They tell you at the start what the final payment amount is to be.
You can buy the car at the end of year 3 for that known amount regardless of condition etc.
The amount is set by the manufacturer and the car will generally be worth at least that amount.

mickdw

masterboy123 wrote: »

its getting clear now.

if i don't have final payment ready at the end of 3rd year, then, can i pay in installments for the final payment?

At year 3, you can
hand back car and owe nothing but that is usually a bad idea as the car will be worth alittle more than you actually owe.
or
Get a new car. To do this, you will need a deposit and then start repayments again. This is where the big crux is. In order for you not to need to come with a cash deposit, the car will need to be worth more than what's owed. If the car is in good condition etc, you well get some deposit out of it. The general idea imo is that there may be about 15 percent of new price left in the car for you at year 3. This would be a 15 percent deposit on new car going forward. Can you afford the car repayments with 15 percent deposit? If so, the deal will suit you.
Or
keep the car. You will need to pay off final payment in lumpsum or finance it over a few years.

masterboy123

Okay cool. So I can pay off final payment by taking further loan, in case I want to keep the car.

CiniO

masterboy123 wrote: »

Okay cool. So I can pay off final payment by taking further loan, in case I want to keep the car.

That's assuming someone will give you that loan.
I think you will need to look for that load somewhere else, as supplier of PCP finance normally don't offer that.

sunnysoutheast

masterboy123 wrote: »

Okay cool. So I can pay off final payment by taking further loan, in case I want to keep the car.

You can take out a personal loan, CU loan etc. to clear the outstanding finance/balloon payment or the dealer should be able to offer a personal loan at the end of the PCP term. Which you take will depend on the APRs on offer at the time. It might be lower with a secured loan (on the car) than unsecured.

masterboy123

Ok. thanks for the info.

CiniO wrote: »

That's assuming someone will give you that loan.
I think you will need to look for that load somewhere else, as supplier of PCP finance normally don't offer that.

What are the chances that i would get another loan for the balloon payment? And to be honest to get even PCP initially? I have never applied for loan previously. I have credit card from the last 1 year only. Before that I had been using only debit card.

sunnysoutheast wrote: »

You can take out a personal loan, CU loan etc. to clear the outstanding finance/balloon payment or the dealer should be able to offer a personal loan at the end of the PCP term. Which you take will depend on the APRs on offer at the time. It might be lower with a secured loan (on the car) than unsecured.

Roen

masterboy123 wrote: »

Ok. thanks for the info.

What are the chances that i would get another loan for the balloon payment? And to be honest to get even PCP initially? I have never applied for loan previously. I have credit card from the last 1 year only. Before that I had been using only debit card.

As to whether you get the PCP in the first place I can't comment. Ring the dealer and see, if they say no then ring another. One dealer I dealt with recently had absolutely no interest in doing a PCP deal. I was given a line about their PCP quota being full. The next one had everything approved within three hours. Same brand. Same car. Different county. Weird experience. Don't take the first no as definitive proof.

If you get the PCP deal and pay back your monthly payments on time and without issue for three years I can't see whoever arranged the finance in the first place refusing you. You'll have three years good history built up.

bazz26

Nobody here can really tell you if you qualify for PCP finance or not as it totally depends on your credit rating as well as how much your take home pay is as well as other expenses you may have. A dealer might have a rough idea based on experience of customers similar to you but ultimately you would not know for sure until they put your application through to the bank.

masterboy123

Ok, thanks everyone for their input.