Current Renault finance deal worth it?

kevfuzz

Hi,

I'm looking for advice on the Renault finance deal they have for February. Renault are offering 2.9% finance for the month.

I'm seriously considering jumping in and buying a new Kadjar. I have about €6k of a deposit so I need finance on the rest. From talking to the sale rep my two choices were just a straight 3 year finance at 2.9% or a PCP plan over three years at 2.9% with around a 10-12k final payment.

I'm completely at a loss as to which is better? If I can afford the straight finance deal does that make the most sense? I've always been suspicious of PCP plans but I don't know if I should be.

If anyone has any thoughts/suggestions on this, it would be greatly appreciated.

Thanks,
Kev.

CharlieCroker

It's a good rate.

If you're keeping the car for more than 3 years and you can afford the monthly payment of the full finance, you'll own the car at the end.

If you're trading it in after 3 years for a new one or the lower PCP payment is preferable then go for PCP.

CIP4

That interest rate is good alright. The way I see it if you can afford the higher repayments go HP as it means after 3 years you own the car and can do whatever you want to do with it keep it, trade it, sell it privately. PCP lower repayments but after 3 years you have a balloon payment of ~10-12k euro. Your options are pay it off and keep the car however if you don't have the money and have to borrow it in a bank or credit union they ain't going to give it to you for anything near 2.9% interest meaning this would work out more expensive than hire purchase at 2.9%.

Or you can hand it back but ultimately lose out as there will be a bit of equity in the car which you'll only get if you trade it for a new one or pay it off and keep it. The one benefit of pcp is the guaranteed future value of the car but that's of no benefit on a kadjar as they will hold their value fairly well and be worth more than that value anyway.

To me it would only make sense to consider PCP if the interest rate is a lot lower than HP when it's the same I'd personally do HP traditional loan as after 3 years you owe nothing and can do whatever you like with the car.

kevfuzz

Thanks for the thoughts.

I'm leaning towards the HP as I think 2.9% is a great rate and I don't want to be worrying about future minimum values and having to ensure I don't go over a certain millage or else get penalised.

When discussing PCP the sales rep started talking about having to have the car serviced at their garage annually and tried to push some scratch protection plan for another €400 in order to ensure the future minimum value is met.

The HP plan just seems much simpler!

Thanks,
Kev.

bazz26

All main dealers are trying to up sell add on stuff such as paint protection, etc these days at ridiculous prices. Better off going to a well recommended professional detailer and spend the same or slightly less money.

I bought a Renault last year. 18K car, 15K after trading in my own banger, then paid 4K upfront and got 11k on 0% HP finance.

It was a very good offer I have to say. Very hard to say no to. Although watch out for when you go to sign the paper work as they announced there was a EUR 250 fee upfront for "processing" the application. Not the end of the world but act surprised when they announce it and think about walking away from the deal and see if they'll drop it or reduce it as its a load of bull**** really.

I'm in the process of selling my Clio after having it for only 1 year and I have EUR 7K left on HP plan which I have to clear before I can sell it. RCI Banque were easy to contact and they just gave me the figure for settlement and the details for how to settle it. Easy peasy. And they didnt throw in any hidden charges before sending me the closing letter notification.

As a comparison, I am buying an Alfa Romeo on HP this week and they charge 75 euro processing fee upfront and a 75 euro fee at the final payment in 5 years time. So the EUR 250 that Renault may hit you with is a bit extreme. Pretty sure they are just chancing their arm so give them plenty of hassle over it.

The rate of 2.9% is very good though from Renault. I got quoted something like 4.9% on PCP and 5.9% on HP from Kia and I'm getting a rate of 6.9% from Alfa on HP.