PCP deal opinion

pidgeoneyes

Hi all. I'm looking for your thoughts on this PCP deal. The car is a Renault Megane GT nav sport tourer. It's a demo with a price of €28350.

I was planning to put in a deposit of €7000. This includes €2100 the garage have offered for my 2005 1.7 cdti Astra.

Monthly repayments are €310.75 and the GFV is €11191.43.

Any opinions, whether they be yay or nay would be greatly appreciated!

Mods, if this should be the PCP thread, feel free to move.

colm_mcm

The one massive concern I would have would be the depreciation. €28k is an awful lot of money for a small family car (nevermind a megane) and while the extras are nice now, they won't make the car that much more valuable in 3 years time. That it's an estate won't help the trade in price either.
I think the key to a good PCP deal is having enough equity in the trade-in in 3 years time.
Yes the car will be worth a minimum of 11k, but in a situation where it's only valued at 11k in 3 years then you would in theory need to come up with another 7k deposit to get into another similarly priced car and keep the repayments the same on a car that you still won't own.

(I really like the new Megane by the way, so this isn't just Renault bashing)

goz83

Would you rent the same car for 5.5k per year over a 3 year period?

Sounds expensive OP

Masala

Am I reading this right..... €310.75 x 36 months??

At this rate of going.... the OP will have €1,028 left in his pocket in year 3 and no car???

Cost €28,350
Less: €7,000 Dep
Less €11,187 paid (€310*36)

=€10,163 still owing.

His car will be worth €11,191 by the Trader.... and so to clear up the outstanding debt - the OP is left with €1,000??

...am I reading this wrong???

colm_mcm

Yeah, you're reading it wrong.

To give a more optimistic example, in 3 years time, if the Megane is worth €15191, the OP would have €4000 equity in the trade in. This would mean that they effectively have €4000 of the deposit for the next car sorted and will only have to come up with €3k cash to put into another deal requiring a €7k deposit. Or €2k on a deal with a €6k deposit etc.

They of course have the option of finding €11191 somewhere and just paying for the 171 Megane and now own it.

Lantus

I'd note that the deposit is very large. Caution! What do you want after 2 to 3 years? If your buying the car then by all means drop a 25% deposit. But generally a 12-15% deposit matches the equity after 3 years. That means if you roll into another 3 year PCP deal your monthly payments will be very similar all things being equal. However, with a large deposit your equity will still be 12-15 so monthly payments will jump quite a bit.

Get a quote with a deposit of say 4k and if the monthly repayments are unthinkable or feel too much then ask yourself what you will do after year 3 when a new car will cost you that a month.

Of course if your buying outright after year 3 it doesn't matter and a large deposit can mean slightly less interest paid.