PCP on used cars?

hometruths

Been looking at PCP deals on new cars, and seen some adverts eg VW dealers saying PCP on used at 3.9%

Anyone got any real examples of figures they have been offered recently on a PCP for a used car?

Just thinking if there is flood of PCPs expiring and trading up early next year there might be some value to be had, but suspicious dealers will just inflate used prices to keep the whole shebang going!

exaisle

PCP's on anything is the kind of financing that makes snake oil salesmen look positively angelic...

Del2005

exaisle wrote: »

PCP's on anything is the kind of financing that makes snake oil salesmen look positively angelic...

Yet the US and UK have been doing it for years. Take a look at car ads from the US and see how many mention the full price vs monthly payments. PCP isn't for everyone but it is suitable for the majority.

hometruths

exaisle wrote: »

PCP's on anything is the kind of financing that makes snake oil salesmen look positively angelic...

I started looking at PCP when offered 0% + 4k scrappage on a car worth €500. However you're still just buying the biggest chunk of depreciation on a car.

PCP does not look so bad if you are comparing it to what I normally do. Run a 12 year old 2.0 litre petrol for three years.

Anyway, back OT does anyone have any examples of PCP offers on used cars?

exaisle

Del2005 wrote: »

Yet the US and UK have been doing it for years. Take a look at car ads from the US and see how many mention the full price vs monthly payments. PCP isn't for everyone but it is suitable for the majority.

PCPs are the financial equivalent of "putting off the evil day". To mix my metaphors, the chickens have to come home to roost at some stage. PCPs encourage people to live beyond their means... Same kind of things as banks during the boom giving people mortgages way beyond what they could really afford.

MarkN

exaisle wrote: »

PCPs are the financial equivalent of "putting off the evil day". To mix my metaphors, the chickens have to come home to roost at some stage. PCPs encourage people to live beyond their means... Same kind of things as banks during the boom giving people mortgages way beyond what they could really afford.

Don't agree. A mortgage that is many multiples of your salary is not the same as PCP. If someone wants to spend €250-350 per month on a car, that's their own business. I know many individuals who have gone this route as it takes away a lot of hassle, they've plenty of money though.

Seanie_H

schmittel wrote: »

Anyway, back OT does anyone have any examples of PCP offers on used cars?

Hi Schmittel - did you get anywhere with this?

All I can see is VW and Audi used car PCP. Generally those brands are overpriced second hand anyways.

PCP is an attractive option for me for a number of reasons but I don't like the idea of having to buy a new car (depreciation, the fear of somebody hitting it in a shopping centre etc.) to avail of it.

hometruths

Seanie_H wrote: »

Hi Schmittel - did you get anywhere with this?

All I can see is VW and Audi used car PCP. Generally those brands are overpriced second hand anyways.

PCP is an attractive option for me for a number of reasons but I don't like the idea of having to buy a new car (depreciation, the fear of somebody hitting it in a shopping centre etc.) to avail of it.

Like you, only found VW and Audi. Figured I'd wait until next year and see what happens.

I still think that with the huge volumes of PCPs coming to their 3 year end of cycle the only way for the main dealers to offload stock is to either offer low rate PCPs on used or slash prices.

Seanie_H

schmittel wrote: »

I still think that with the huge volumes of PCPs coming to their 3 year end of cycle the only way for the main dealers to offload stock is to either offer low rate PCPs on used or slash prices.

Yep, could be very interesting. As well as how cheap it is importing in the IK now, they'll be under pressure on shifting the 3 year stock too.

Just have to get another year out of the current oul banger.

John_Rambo

I'd be concerned about the value of diesel cars a few years down the line when I reach that can that I kicked a few years ago!

Not for me. I hear a lot of spin like "People acquiring cars that they can't afford".

Really? You're going to pay the full value of the car one way or another.

kirving

I've posted before on this, but I bought a 6 year old car with 100k km.

Between
Tyres, €600,
Clutch and flywheel, €1000,
Extra tax a year, €500 *3, €1500,
Self maintenance, €600+,
Repairs, €500, (wheel bearing, wiring harness, split air),
Fuel efficiency vs new (900 saving*3 yrs, €2700)
Depreciation (€5000)

That's €300 per month, on average, but can go up and down depending on the month a little.

I'm really running very close to what PCP would cost me for a similar car, Per month, forgetting the initial deposit of course.

Yeah I own the car outright now, but so what? It's 9 years old, has high tax, is petrol, 215k km and only now that it's paid off will I begin to see that monthly average reduce, at which point the car is 10 and will need a yearly NCT and attracts higher insurance.

Seanie_H

Kevin Irving wrote: »

Yeah I own the car outright now, but so what?

Exactly. There's very little benefit in owning an asset that's depreciating and costing you more on a weekly and monthly basis. It's a mentality thing. If I had €25-30k in cash in the bank, the last thing I'd do is buy a car outright.

MarkN

Nissan and BMW are two other brands that do used PCP.

MarkN

MarkN wrote: »

.............. PCP. If someone wants to spend €250-350 per month on a car, that's their own business. I know many individuals who have gone this route as it takes away a lot of hassle, they've plenty of money though.

Indeed.
For everyone in a PCPd car that maybe they couldn't really afford otherwise and they are counting on some equity at the end of it there's someone in a modest Qashqui, Focus or similar who can well, well afford it and loads of folks in A4s, Passats and better again who earn well and have serious cash too.

MarkN

Augeo wrote: »

Indeed.
For everyone in a PCPd car that maybe they couldn't really afford otherwise and they are counting on some equity at the end of it there's someone in a modest Qashqui, Focus or similar who can well, well afford it and loads of folks in A4s, Passats and better again who earn well and have serious cash too.

As opposed to what? Spending 30k savings on a depreciating asset or do you mean paying a loan monthly without a balloon and being able to afford those repayments?

Always curious what people mean when they use your example when it comes to finance/PCP.

Apologies Mark
Most folk who knock PCP seem to think that most if not many folk going the PCP option wouldn't be able to afford to go the paying a loan monthly without a balloon payment option on the same car.

My point was that for every one of them there's loads of folks with lots of cash who can afford the car who simply go the PCP route for convenience and of course 0% PCP is essentially a free loan for a while.

MarkN

No need to apologise, just genuinely curious about what people mean when they use that example.

KwackerJack

What about leasing?

Ok its not your car but neither are any servicing or maintenance depending on the contract. As mentioned when the loan is paid for the car has depreciated to a point where it will cost you more to sell and maintain it

bazz26

There is no personal leasing on offer in Ireland.

acronym Chilli

Kevin Irving wrote: »

I've posted before on this, but I bought a 6 year old car with 100k km.

Between
Tyres, €600,
Clutch and flywheel, €1000,
Extra tax a year, €500 *3, €1500,
Self maintenance, €600+,
Repairs, €500, (wheel bearing, wiring harness, split air),
Fuel efficiency vs new (900 saving*3 yrs, €2700)
Depreciation (€5000)

That's €300 per month, on average, but can go up and down depending on the month a little.

I'm really running very close to what PCP would cost me for a similar car, Per month, forgetting the initial deposit of course.

Yeah I own the car outright now, but so what? It's 9 years old, has high tax, is petrol, 215k km and only now that it's paid off will I begin to see that monthly average reduce, at which point the car is 10 and will need a yearly NCT and attracts higher insurance.

Your calculations must be off as you're not being consistent. Some of your costs are absolute, e.g. tyres. You include these but you'd probably need to buy tyres on a PCP machine. So you'd need to quantify the two costs and then work out the difference.
Others you include the differential, e.g.on tax and fuel economy.

Others are ambiguous, e.g. depreciation.

Finally, to ignore the upfront payment and balloon makes no sense.

Not saying your conclusion wrong but calc not right

KwackerJack

KwackerJack wrote: »

What about leasing?

Ok its not your car but neither are any servicing or maintenance depending on the contract. As mentioned when the loan is paid for the car has depreciated to a point where it will cost you more to sell and maintain it

As mentioned there are no leasing options for private motorists.

Makes sense for business though........
A Hyundai i40 Comfort Saloon RRP €26,495 (I know they are dated as feck now but Hyundai are the only easy option I can get figures for... ).........48
MONTHS..........ALL INCLUSIVE MONTHLY (EX.VAT)*........€306

MONTHLY PAYMENT INCLUDES
- MAINTENANCE
- ROAD TAX
- REPLACEMENT TYRES
- LEASE PAYMENT

*Above lease rates based on 48 month term with 20,000 KM per annum. Eligible businesses may reclaim 20% of Vat content.
Monthly lease rate excluding optional maintenance package

Most folk on the road for business would do double that mileage though.

grogi

Kevin Irving wrote: »

I've posted before on this, but I bought a 6 year old car with 100k km.

Between
Tyres, €600,
Clutch and flywheel, €1000,
Extra tax a year, €500 *3, €1500,
Self maintenance, €600+,
Repairs, €500, (wheel bearing, wiring harness, split air),
Fuel efficiency vs new (900 saving*3 yrs, €2700)
Depreciation (€5000)

That's €300 per month, on average, but can go up and down depending on the month a little.

I'm really running very close to what PCP would cost me for a similar car, Per month, forgetting the initial deposit of course.

Yeah I own the car outright now, but so what? It's 9 years old, has high tax, is petrol, 215k km and only now that it's paid off will I begin to see that monthly average reduce, at which point the car is 10 and will need a yearly NCT and attracts higher insurance.

It seems you are a bit over-optimistic here...

First of all, if over three years you need eight tyres, you are probably doing something in 30kkm a year. You would need four or even six tyres in a new car too...

Your fuel saving figures suggest similar mileage. Assuming an excellent improvement in economy of 2l/100km, to save €900 you are looking at 30kkm a year. You would probably get less of economy improvement here, but as fuel prices go up that might add up.

Additionally, with a new car you will need at least three services at the dealer - and they will be around €100 more expensive than similar service at an indy (unless you go with the service package). You can change the consumables at an indy - so no savings to be made here.

Tax savings are excessive as well - you would be getting a 2008+ diesel. I can imagine you would go down from €390 to €190 a year, but not much more than that.

With 100kkm at the end of PCP you will be badly hit with the offered trade-in value, you'll need to put a few grands to keep the repayments at the same level...



All together it will cost you more on PCP, but with that mileage I would not hesitate to pay the premium.