PCP Offer - Seem correct?

Heisenburg81

Retail price €26,950.00

Trade in € 5,000.00

Cash €4,000.00

Finance amount €17,950


PCP 36 months €341.00 per month ……..based on 25,000km PA, ……….GFMV €7,898.

This means interest totals €2,224.
How can this be correct? Would amount to 20% interest if calculated on the Finance Amount less the GMFV?!!

650Ginge

You pay interest on everything including the GMFV.:rolleyes:

But no capital repayments on the balance less the GMFV but interest on all the balance.

Heres Johnny

Whats the quoted interest rate?

Heisenburg81

Heres Johnny wrote: »

Whats the quoted interest rate?

5.9%

Heres Johnny

Heisenburg81 wrote: »

Heres Johnny wrote: »

Whats the quoted interest rate?

5.9%

Well 5.9% of 17950 is 1059 in the first year alone so it looks right to me to be honest.

Pain in the hole but think of overall cost of the car, it may be still a good deal. What type of car is it do you mind me asking?

Heisenburg81

Heres Johnny wrote: »

Well 5.9% of 17950 is 1059 in the first year alone so it looks right to me to be honest.

Pain in the hole but think of overall cost of the car, it may be still a good deal. What type of car is it do you mind me asking?

Hyundai i30 Fastback

Casati

Heisenburg81 wrote: »

Hyundai i30 Fastback

Are you getting scrappage of 5k, how much do you think the car is worth, ie what price are the cheapest similar cars asking on donedeal?

Apr of 5.9 in pcp is fairly high, for that to be competitive you need to be getting a good deal on that trade in. Overall I’d say your deposit is too high as the equity in the car in three years won’t be anything like 9k

Heisenburg81

Casati wrote: »

Are you getting scrappage of 5k, how much do you think the car is worth, ie what price are the cheapest similar cars asking on donedeal?

Apr of 5.9 in pcp is fairly high, for that to be competitive you need to be getting a good deal on that trade in. Overall I’d say your deposit is too high as the equity in the car in three years won’t be anything like 9k

How do you mean? Please explain as I am trying to get to grips with concepts.
Brand new car on market so no comparable 2nd hand values.
Are you saying car value would be less than €15k ?
€5k is good for what I have. Scrappage.

Casati

Heisenburg81 wrote: »

How do you mean? Please explain as I am trying to get to grips with concepts.
Brand new car on market so no comparable 2nd hand values.
Are you saying car value would be less than €15k ?
€5k is good for what I have. Scrappage.

Sorry I meant the car you are trading in, is it worth practically nothing or do you think it actually might be worth 5k if you tried selling it yourself? If it’s the former then basically the overall deal looks solid. Some manufacturers give 0% (eg Seat) but won’t give you anything like 5k for a car that will end up scrapped where as Hyundai give a bigger scrappage but won’t do the 0% pcp in tandem

Aside from that I think that’s a nice car your buying, reminds me of the Toyota Sprinter from the 80’s in a good way!

Heisenburg81

Casati wrote: »

Sorry I meant the car you are trading in, is it worth practically nothing or do you think it actually might be worth 5k if you tried selling it yourself? If it’s the former then basically the overall deal looks solid. Some manufacturers give 0% (eg Seat) but won’t give you anything like 5k for a car that will end up scrapped where as Hyundai give a bigger scrappage but won’t do the 0% pcp in tandem

Aside from that I think that’s a nice car your buying, reminds me of the Toyota Sprinter from the 80’s in a good way!

Just paranoid about any hidden catches or pitfalls.
If I stick to the plan the car should have equity over and above GMFV. Hoping around €8 - €13k.
It looks nice alright.
Its either pcp or c union but with the latter locked into 5 year loan and no choice but to buy.
PCP seems to leave all options open..
Did you mean cash element of deposit too high if TIA too low?
Thanks for advice

Heres Johnny

With PCP the idea is this:

You put in a certain deposit (your case is 9k)

You get a certain monthly payment (your case is 340) and a GMFV which is also just a word for balloon payment or the part of the car you are not paying for through deposit or GMFV

You pay this monthly for 36 months

At the end if the car is worth a certain amount above GMFV this excess amount can be used to form deposit on a new car and you get into another 36 monthly contract (or buy the car outright at that stage)

However if the car value less GMFV is less than your initial deposit your 2nd set of 36 monthly payment will be higher than the first for a car of equal value because your deposit will be lower on 2nd car.

In your case 5k is being made up.of scrappage deal on something worth less than 5k so it probably makes sense.

Just be aware lots of people are finding their car is not worth a lot above GMFV when they expected it to be a lot, and their 2nd PCP needs either a cash injection or higher monthly.

Heisenburg81

Heres Johnny wrote: »

With PCP the idea is this:

You put in a certain deposit (your case is 9k)

You get a certain monthly payment (your case is 340) and a GMFV which is also just a word for balloon payment or the part of the car you are not paying for through deposit or GMFV

You pay this monthly for 36 months

At the end if the car is worth a certain amount above GMFV this excess amount can be used to form deposit on a new car and you get into another 36 monthly contract (or buy the car outright at that stage)

However if the car value less GMFV is less than your initial deposit your 2nd set of 36 monthly payment will be higher than the first for a car of equal value because your deposit will be lower on 2nd car.

In your case 5k is being made up.of scrappage deal on something worth less than 5k so it probably makes sense.

Just be aware lots of people are finding their car is not worth a lot above GMFV when they expected it to be a lot, and their 2nd PCP needs either a cash injection or higher monthly.

Rates for first 3 years less than banks etc so if I decide to buy out in 3 years can get c union loan then.
Looks like win win scenario.

Heres Johnny

Heisenburg81 wrote: »

Heres Johnny wrote: »

With PCP the idea is this:

You put in a certain deposit (your case is 9k)

You get a certain monthly payment (your case is 340) and a GMFV which is also just a word for balloon payment or the part of the car you are not paying for through deposit or GMFV

You pay this monthly for 36 months

At the end if the car is worth a certain amount above GMFV this excess amount can be used to form deposit on a new car and you get into another 36 monthly contract (or buy the car outright at that stage)

However if the car value less GMFV is less than your initial deposit your 2nd set of 36 monthly payment will be higher than the first for a car of equal value because your deposit will be lower on 2nd car.

In your case 5k is being made up.of scrappage deal on something worth less than 5k so it probably makes sense.

Just be aware lots of people are finding their car is not worth a lot above GMFV when they expected it to be a lot, and their 2nd PCP needs either a cash injection or higher monthly.

Rates for first 3 years less than banks etc so if I decide to buy out in 3 years can get c union loan then.
Looks like win win scenario.

Yeah I'd go for it if you like the car it seems fine to me, scrappage of 5k is the clincher. What is the quoted GMFV on them? I would imagine on your figures its about about 9k? A 3 year old car taken in by a dealer would give you about 50% on average of new cost which would be 13.5k (could be a bit higher though) leaving you 4 or 5k for your next one if you decided to roll it over rather than buy it outright.

vandriver

To calculate the interest.
You have a 3 year interest only loan on 8k @5.9% (€1,416)
and a 3 year of 9950 @5.9% which on reducing balance would be roughly €880making to my rough estimate €2,300 in interest.

colm_mcm

Keep in mind you don't get the €5k off again next time round.

MarkN

But do remember that there is hidden deposit in that scrappage so it’s highly likely if you go again you’ll need more deposit or have to pay higher monthlies.

mickdw

Looks okay. If you look at deal another way you are getting 3k discount a zero percent finance (as they are basically gifting you 5k)
Just look at your year 3 options. If the car is worth 11 at end, have you a strategy?are you happy to pay the gfv and own it. Are you sure that you will be able to obtain finance if needed to pay the gfv at end?

Lantus

Well your deposit is beyond 30% which seems odd but no doubt they can get around this.

Bear in mind that if you roll over into a new deal your equity (deposit) for the next car can be about 5 to 10% based on current market conditions. Your gmfv is quite low, your paying off 65% ish over 3 years which may help but that's dependant on the resale values of course.

Basically go get a quote for the same car based on a 10% deposit. That is your probable monthly if you trade up in 3 years.

Loading the deposit makes most sense if your buying outright. Use the lower monthlys to save some cash over 3 years to pay off balloon at the end.

Heisenburg81

colm_mcm wrote: »

Keep in mind you don't get the €5k off again next time round.

GMFV should be a good bit lower than MV after 3 years, surely would have a MV circa €15k assuming I keep at or below mileage?
In that scenario I would have the €5k and more in equity..
May buy it out so higher deposit and higher monthlys help too.
All options viable I hope!

mickdw

Just be careful with assumptions of market value at 3 years old.
They are basically selling these new at 22k when you consider scrappage or discount or whatever way you look at it.
I would base my 3 year valuation off off that for a start. Take 50 percent of that. Worth 11k at end worst case.

Heisenburg81

Lantus wrote: »

Well your deposit is beyond 30% which seems odd but no doubt they can get around this.

Bear in mind that if you roll over into a new deal your equity (deposit) for the next car can be about 5 to 10% based on current market conditions. Your gmfv is quite low, your paying off 65% ish over 3 years which may help but that's dependant on the resale values of course.

Basically go get a quote for the same car based on a 10% deposit. That is your probable monthly if you trade up in 3 years.

Loading the deposit makes most sense if your buying outright. Use the lower monthlys to save some cash over 3 years to pay off balloon at the end.

I will probably do less mileage than the amount I elected for so GMFV will be less than MV. I went conservative.
My thought process is that paying off a larger principal amount will assist in keeping all options open;
A) The MV should yield a good future deposit if I chose a new PCP
If I chose to buy out I have a lower baloon payment
Maybe my logic is flawed?

Heisenburg81

mickdw wrote: »

Just be careful with assumptions of market value at 3 years old.
They are basically selling these new at 22k when you consider scrappage or discount or whatever way you look at it.
I would base my 3 year valuation off off that for a start. Take 50 percent of that. Worth 11k at end worst case.

Didnt think of it that way. Good point.
Im 90% sure I will buy out though so heavy loading the payments is ok.
The 3 year interest v banks etc is win win.

mickdw

Heisenburg81 wrote: »

I will probably do less mileage than the amount I elected for so GMFV will be less than MV. I went conservative.
My thought process is that paying off a larger principal amount will assist in keeping all options open;
A) The MV should yield a good future deposit if I chose a new PCP
If I chose to buy out I have a lower baloon payment
Maybe my logic is flawed?

Your logic is ok re picking the higher mileage and will help with all scenarios at end except in the case of handing back and walking away. If you are satisfied that you will never be doing that, i dont see an issue in having a bigger portion of the car paid off.

Heisenburg81

mickdw wrote: »

Your logic is ok re picking the higher mileage and will help with all scenarios at end except in the case of handing back and walking away. If you are satisfied that you will never be doing that, i dont see an issue in having a bigger portion of the car paid off.

I wont be handing back for sure.
If you wanted to in effect walk away couldnt you sell privately to pay off baloon and pocket any profit?

Heres Johnny

I wont be handing back for sure.
If you wanted to in effect walk away couldnt you sell privately to pay off baloon and pocket any profit?[/quote]

Yep you can indeed.

mickdw

Heisenburg81 wrote: »

I wont be handing back for sure.
If you wanted to in effect walk away couldnt you sell privately to pay off baloon and pocket any profit?

You can by clearing baloon yourself then selling but some people cannot fund that. Alternatively put it for sale and disclose to buyer that there is finance to clear. Alot of buyers will run away though. That is why i mentioned earlier that it is important to be sure that you can fund the gfv so no matter what way you go, you are not forced into handing back.

Lantus

Heisenburg81 wrote:

I will probably do less mileage than the amount I elected for so GMFV will be less than MV. I went conservative. My thought process is that paying off a larger principal amount will assist in keeping all options open; A) The MV should yield a good future deposit if I chose a new PCP If I chose to buy out I have a lower baloon payment Maybe my logic is flawed?

If the gmfv was lowered based on your mileage allowance then yes but remember this is slight. Good idea though.

colm_mcm

Heisenburg81 wrote: »

GMFV should be a good bit lower than MV after 3 years, surely would have a MV circa €15k assuming I keep at or below mileage?
In that scenario I would have the €5k and more in equity..
May buy it out so higher deposit and higher monthlys help too.
All options viable I hope!

It's not really a €27k car though. I know it is on paper, but if your car is worth €15k after 3 years and can be bought straight for €22k new, that would be tiny depreciation. Not that realistic IMO.

Heisenburg81

colm_mcm wrote: »

It's not really a €27k car though. I know it is on paper, but if your car is worth €15k after 3 years and can be bought straight for €22k new, that would be tiny depreciation. Not that realistic IMO.

Cant be bought for 22k new

colm_mcm

Heisenburg81 wrote: »

Cant be bought for 22k new

Are they not giving €5k off?

Heisenburg81

colm_mcm wrote: »

Are they not giving €5k off?

€5k TI or scrappage thus if you hadnt a car it is €27k new straight purchase.